GoGold Resources (TSX:GGD) - You get the best of both worlds (Transcript)

March 31 2020, 14:25 GMT+01:00

GoGold Resources (TSX:GGD)

    • TSX: GGD
    • Shares Outstanding: 222M
    • Share price C$0.59 (26.03.2020)
    • Market Cap: C$124M

This is a Mexican gold and silver play with plenty to be excited about. GoGold Resources Inc. is a Canadian-based silver and gold producer with projects in Mexico. The management has experience building, buying and selling mines. The team has built three mines, and is developed a fourth in Mexico, over the last 24 years. GoGold Resources has one project generating cash flow, the Parral Tailings Project, in addition to its recently acquired Mexican exploration play, Los Ricos. Langille thinks the project in Mexico is one of the very best remaining undeveloped trends in the jurisdiction.

Historically, the management team has raised over C$800M equity and C$200M debt for their projects. The management team appears to be decisive and does what it says it will do.

Langille starts by talking about what all investors want to know: how is COVID-19 affecting the business? It has certainly changed the way that GoGold Resources is operating though. Sanitation is the order of the day, but are these new WHO protocols anything more than a mild inconvenience? Langille says they aren't. It is business as usual. Langille thinks these current market conditions are simply a broad-based sell-off. Investors are selling anything that isn't nailed down. Langille thinks the quantitative easing that governments around the world are currently engaging in has historically always been good for gold and other precious metals companies.

Parral is currently generating around US$700,000 per month, and GoGold Resources has around US$20M in the bank and is owed US$11.5M from the Mexican government. GoGold's US$25M financing at the end of February looks like a great deal given current market conditions; raising capital at today's rates would be far from ideal.

The balance sheet looks strong, and Langille is confident GoGold Resources' share price will bounce back once COVID-19 comes under some sort of control. Operational figures have been impressive, and other than a delay in delivering its 43-101 (now due in May), things appear to be running smoothly.

At Los Ricos, GoGold is currently undertaking a 10,000m diamond drilling program of HQ size core in conjunction with a field program of geological mapping, sampling and trenching on the property. This has recently increased from 2 drill rigs to 6. The focus is on the southern end of the 35km trend. Work is also underway at a separate project 20km North. Deals have been sealed to secure GoGold's control of the Resource. A drill hole in the northern structure has demonstrated 24m @ 27g/t gold, and Langille claims there are plenty more. Langille believes Los Ricos South will have a Resource size of around 1Moz gold equivalent, but the earlier stage Northern project has the potential to be even larger.

In terms of timeline, Los Ricos North is about a year behind Los Ricos South. Los Ricos South should have a gold Resource delivered on it in the near future. If investors base their economic assessment around the "anchor" of 1Moz gold equivalent at Los Ricos South, without even factoring in the potential of the north and the existing cash flow at Parral, GoGold Resources is shaping up to be a strong player in the gold space.

Institutional investors have bought into the holistic business model: a solid producer at one end, with a secure, an expandable resource at Los Ricos South and cash flow from Parral, and the excitement and risk of exploration at Los Ricos North at the other end. This looks like a tempting package, but what do you think?

We Discuss:

  • 2:09 - Company Overview
  • 3:20 - Covid-19's Impact: Business as Usual or New Problems to Deal With?
  • 5:57 - Market Conditions: Ongoing Struggles and Getting Back to Where They Were Once it Recovers
  • 9:42 - Company Financials: Recent Raise and Cash Position Going Forwards
  • 13:25 - Volatile Silver Prices & Managing Contract Terms
  • 15:25 - Tailings: Plans and Findings
  • 21:15 - Growing the Los Ricos Project: What Have They Got and Found?
  • 29:03 - Economic Studies and Timeline of Delivery
  • 32:49 - What did Institutions Buy Into: The Possibilities of GoGold

CLICK HERE to watch the full interview.

Company Website: https://gogoldresources.com/

Matthew Gordon: Hello Brad. How are you sir?

BradleyLangille: Good, good. I'm good in this newworld were living in.

MatthewGordon: You're coping, you're coping. So where are you at the moment?

BradleyLangille: I'm in Halifax, Nova Scotia - athome.

MatthewGordon: At home. Okay. Well that's the place to be. Well, let's get into this.I'm sure we will talk about the C-word somewhere in the conversation, but fornow, why don’t you kick off with a one-minute overview for people new to thestory, and we'll get into it.

BradleyLangille: Okay. GoGold Resources is aMexican-focused mining exploration development company. We have one operatingmine and we have an exploration project, which has really now developed intotwo exploration projects over a 35km trends. The group and the four publiccompanies that I've been management of, CEO of, had been based in Mexico for,well my whole career; I've been at this 27-years now, so excellentrelationships in the country of Mexico. We're good at raising capital, which wedeploy into our projects. We've built three mines over the last 24-years. We'vemajor refurbished a 4th mine, raised over USD$800M equity for our projects andwe've raised over USD$200M of debt for our projects over the years.

MatthewGordon: Okay, thanks, Brad. There's, you know, and we'll flash up some of theprevious interviews on the screen up here. People should go and reference thosefor a bit more detail about the projects. But, so let's kick off the questioneveryone's going to be asking: is the Corona virus affecting business?

BradleyLangille: Well, certainly the way we'reoperating is a little bit different than how we're operating a month ago. We'refollowing all the procedures as far as sanitary, as far as, in fact, peopleentering the site. We're taking care of temperatures, we're following, abidingby all the you know, the laws enacted in Mexico to come up with this, andabove; we're trying to follow the WHO protocols. So the operation, the mine isstill running as per normal with the exception of those protocols. And ourdevelopment asset is still drilling away.

MatthewGordon: Okay. So it hasn't slowed down what you're doing, but you have had toimplement some new procedures. Those don't sound like costly procedures. So isit generally business as usual?

BradleyLangille: No, it's generally business asusual. Those procedures aren’t costly really at all. They're just, you know, weare abiding to, most of it is just good common sense.

MatthewGordon: Right. Okay.

BradleyLangille: In Mexico at least so far, and wecertainly hope it remains this way, the rate of Covid in the population appearsto be much lower than obviously in Europe, and in even in Canada, in the US. Sofor now, that's a function of; who knows? We don't know, maybe it's warmerweather, or maybe it's just a lack of testing; we’re not sure at this point andwe're monitoring it day by day.

MatthewGordon: So all of your workers are Mexican, then you're not having travelrestrictions, and local Mexicans at that. So it's not affecting travel plans,but it has a knock on effect on your business by the sounds of it.

BradleyLangille: So travel: I mean, we do have 2gentlemen from Halifax who travel back and forth. So that has been, well fornow it has been terminated, that travel. Myself, I'm very hands on. I'm usuallythere every month. It's been a month now since I've been there. And you know,it'll make it more difficult to be onsite from Canada here, but fortunately,most of our people, and we have a very, very strong team and a very strongmanagement team in Mexico, our chief operating officer's lives in Mexico, in Jalisco,so he's there. So it really hasn’t impacted us too much.

MatthewGordon: Now, we're getting that a lot from a lot of the CEOs that we've beeninterviewing. There seems to be a resounding ‘business as usual’. However,obviously the markets are taking a different approach. I think we had thatreset where, you know, at the end of quite a long bull run, I think a lot ofthe institutions are taking money off the table. Normal. You'd expect that, butvery quickly followed close on the heels by the Covid-19 outbreak, and it goingglobal very quickly. That's had a big impact on a lot of junior companies.You're in production, you’re got some cash flows, you've raised some moneyrecently, but your share price got knocked. And I'm not going to pick companiesup on this because everyone's got knocked; the market sentiment seems to havetaken a whack to the abdomen. So what's your take on market conditions? Whenit's going to recover? And if so, do you think you'll get back to where youwere?

BradleyLangille: You know, I think we're just in abroad-base sell off right now, and people are selling anything that's notnailed down. So it's a run to cash, but we saw this in 2008. I mean everythingwas sold in 2008 and then it came back up after the crisis had settled down. Ido feel that all this quantitative easing, and I think the governance and thecentral banks are doing the right thing; that's what they have to do, butthere's been being a tremendous amount of money created right now, and thattypically in the longer-term is good for precious metals. So I look forward tothe price of the metal regaining what it's lost and going up from there. Ithink that we just almost exponentially increased the amount of money outthere. And the stimulus.

MatthewGordon: Yes, for sure. But let's be clear; you're talking about 2 differentthings there: we’re talking about your share price and its ability to regain value,and then you're talking about the price of Gold. So can you give me your viewson how both of those things correct themselves?

BradleyLangille: Right. And we talk about how ourshare price has taken a hit. I mean, it had a very, very good year last year;we were up 200%, and we did get our new project down at Jalisco, and we've beendrilling there and the results have been extremely good, which was very goodfor our share price. You know, we hit a high of USD$0.85 cents. We did opt todo a financing and there was some discussion about that. It was dilutive but wedid it for one reason; because we were getting such great results on ourproject down in Jalisco at Los Ricos and we were able to nail down some deals forsome plains in what we're calling our Los Ricos North project. And thatproject, we're slowly working, a little bit quietly working away at that. Andwe saw an opportunity there, but we had to get that consolidation done first.And really we've gone from starting at two rigs to now where it's six drill rigs,so it hasn't slowed us down there at all. And we had the opportunity, we werenoted for USD$15M. There was a demand for over USD$50M, and we sell it at CAD$25M.So the company has over US$20M. We report in US dollars, in the bank. Parral, heyyou know, the metal price just hit USD$1,250. But really, we've been makingmoney at Parral at around USD$700,000 us a month. We're also owed USD$11.5M fromthe Mexican Government. So you know, we're well-positioned, and actually, thefinancing now in hindsight looks pretty good.

MatthewGordon: Well, it looks like a stroke of genius, and sometimes luck plays a part,and timing plays a part. But you did that at $0.70 cents. It gives you a lot ofcash in the bank at the moment. And you know, if things did get worse, you'vegot optionality I guess there. I should say that you've got a little bit ofrevenue coming in, I want to dig into that in a second. So the companies thatwe see struggling, the ones that don't have cash in the bank, you know, they arerestricted in terms of what they can do, and if they do go and raise now, justone short month after you raised your money, that's a very expensive raise formost of these guys. So you must be pleased, I guess.

BradleyLangille: Yes, look, we're happy. We'rehappy with the raise. We're very happy with our balance sheet. Even at USD$1,250,you know, USD$1,250 is below our All in Sustaining Costs (AISC), but now our AllIn Sustaining Costs has probably changed because the peso has just beenclobbered. It's up close to 24 pesos to the US dollar. And we generate, we sellin US dollars. 60% of our costs are in pesos. So the peso devalues, our costsgoes down, and we're getting that US dollar which is strengthening. It’sinteresting that the US dollar is strengthening and Gold's going up. But youknow, so we look at that and we say, strong balance sheet, we have a mine thatwe've been operating now for five and a half years, which is working great. Ireally think that sober being at $1,250 is an anomaly, but the base will devalue.I think we're pretty close to being cashflow positive still at site. Andthere's one other thing there I'd like to mention; on site at the mine, we justare commissioning and we should be finished commissioning imminently a SART.And that is a plant that we built for USD$3M. It should pay back for the next 6-months.As we speak here, we were consuming 14t of cianide a day. That's our biggestconsumable, and it's in US dollars by the way, and it's about USD$2,500 per tonnow. That SART plant right now is generating about 4t a day - so an extra USD$10,000a day, and it's generating Copper too.  

Reallyat Parral, I feel that at mine site, we're breaking even still at these prices,or doing a little better and breaking even. And I think it's an anomaly. The Silverprice at $USD1,250. It's at a ratio to Gold of, it almost a hit 120:1, which hasnever happened.

MatthewGordon: Yes. So Silver has always has been fairly volatile, you know, so you'vegot to take a slightly longer-term view, which is, I guess what you're doing interms of your decision-making and your planning. I do understand that, but canI just compartmentalise, because I don't want to bounce around too much, can Isort of compartmentalise this. So with the Silver component of revenue stream,you know, we talked last time about the tailings component for instance, whereI think you talked about a USD$13 Silver price being paid. I mean, how do youmanage the terms of those contracts whenever Silver dips to below the pricewhich you're being asked to pay, how does that work?

BradleyLangille: I'm sorry, the contracts?

MatthewGordon: Yes, on the contracting side. Because you talked about, you know, withthe tailings you were removing the liability, you're doing the remediationthere, but in the last interview you talked about a price of around USD$13, butat today's prices that doesn't necessarily work.

BradleyLangille: Yes,All in Costs wasaround USD$13, and the contracts that we have are with the municipality whereit's USD$50,000 a month that we pay; that's our obligation. And no obligationto reacclimate the old tailing site, that's the city's obligation. We only havean obligation to reacclimate the facility we built, which is of course at thesame standard is US, Canada, Europe at world standard. But as far as the costat USD$13, I'd go back again to, you know, there's been a lot of thingsshifting here, and one of the main things shifting here is that the peso hasbeen massively devalued, because they're an oil producer and their base got hitpretty hard. So that reduces our cost substantially.

MatthewGordon: But by how much though? Are you making money still? I guess that iswhat I'm getting at.

BradleyLangille: Yes, that's what I'm saying.We're break even or making a bit of money at site, even at USD$12.50, so Ithink we're in a very enviable position there. I doubt that there's any, orvery few other producers of Silver in Mexico right now making money at theseprices. But we feel, and you know, we're analysing it, but we feel that thepeso will probably reduce our costs by around USD$1.50 an ounce.

MatthewGordon: That's the number I wanted. Okay. Understood. Understood. And with thetailings you talked about having some IP, some intellectual property there, youcame out with your own process which you think is quite unique, obviously. Andhe talks about the ability to perhaps sell to other groups in South Americabecause you know, companies like DRD Gold or Jubilee Metals, they are doingtheir thing in Africa. There's no real competition in South America. Have youbeen carrying, I know it's not the core focus, but have you been carrying onthose conversations?

BradleyLangille: You know, we have, and theproject is very much a project that the Mexican Government likes, you know, forobvious reasons, the social, economic environmental you know, we now have anoperation that's operating. It's been operating five and a half years. We'relooking at all kinds of opportunities of other tailings, even if they're kindof far away, if they're high, high-grade or for us, high-grade, they can makeeconomic sense to truck them over to our operation. So we have 8-years of Reservestoday, next to us at Parral, but we're looking for all of these otheropportunities within trucking distance of our operation. And there's some thatwe're looking at right now that could substantially, if they come together,could substantially impact our costs; reducing it and increasing the metalproduced. Also we've developed this technology, I mean this almost proprietarytechnology now, some of it's an agglomerate deeply just not new to the world,but on tailings it is, and we've found a way to do it that works. And it wasn'teasy. The first 3-years were very difficult for the mine, but the last year anda half, 2-years have been running quite nicely, and I just wanted to touch basehere as well - currently our operation is running beautiful: like we're goingto have another order in line with what we've been doing the last two or threequarters. So yes, we do have something there. It's not the sexiest miningproject in the world, but if it can make money, there's nothing wrong withthat. Especially in this new world.

MatthewGordon: That's again where I'm getting at, because I think this market reset isgoing to, you know, sort the wheat from chaff. Right? And I'm trying to digdown and look at companies which have something different about them. You know,in terms of mitigating risk, alternative revenue streams and this, the tailingscomponent here, I know it's not core and we're going to come onto Las Rico's ina second, it seems to be that if you've got the process right, and Silver,volatile Silver, bumps up a bit over the course on average, you're going to beable to contribute to your overhead by making a margin on these things. And ifyou're capable of nailing down these tailings contracts with other groups, itcould be quite meaningful. And it's very attractive in terms of a sort of non-dilutoryfinancial contribution. So when you say, ‘it's business as usual’, you mean it,as opposed to, I'm sure I'm going to this week and next be hearing lots ofbusinesses usual messages without doubt. But it's not business. It's not makingmoney as usual. It's a case of we're surviving. So just trying to dig down sortof understand if that's still on the table and if that is still, you think,going to deliver revenue for you going forward?

BradleyLangille: No, it probably is going todeliver revenue. I think even at this price it's delivering revenue. And Ithink this price is an anomaly, but even though it's delivering revenue rightnow, our costs have just got reduced a lot by that SART plant as well – by USD$10,000a day - that's substantial. So Parral is delivering revenue. We're looking atmore opportunity for Parral, we tried to increase that revenue, and we havesomething that could be applicable to other tailings in Mexico in the future.But I think the game may have changed a bit. I mean, I'm talking not just forGoGold, I'm talking for everybody. I think we'll come out of this there'll bemore of a focus on who is generating revenue. And the exploration developmentplace, even the exploration development place, I think the focus on them will be more around, okay, you have something.Is this going to be a mine in five years, seven years? Or maybe there's the 1Mozthat you have in front of you that you basically drilled off and that thatcould be a mine in a couple of years. So I think the benefit of what I believewill be higher prices for the commodity are going to filter down, obviously tomajors first and then to mid-tiers and producers and projects that are not inthe grassroots but in the development stage. And I think we're well-positionedin that regard as well.

MatthewGordon: No, I think that's true. A lot of what you just said is true and it'sgoing to require people to look at the fundamentals of a business in a way ofwhich perhaps pre this current phase we find ourselves in, they haven't donevery well, and we're certainly going to encourage people to look a little bitdeeper as to the business fundamentals. You know, what does the management teamdoing to enable and ensure its success going forward? And I just quite like thetailings component as part of the story. But let's get onto the mainattraction, which is, you told me on a couple of occasions is the best projectyou've been on or seen for the last 20 years: Los Ricos. So what's beenhappening?

BradleyLangille: : It is. And it still is. We weredrilling with 2 rigs, now we are at six. We've been focused on the first area,which is Los Ricos, now we have two projects. Really it's a 35km trend. We'refocused on the Southern end of that trend, which we're going to call now LosRico South. And then we had another called Montefiore at the North end of thetrend. It's 20km away. It is a separate project and it's very good-lookingproject. We were in there with crews on the ground, but a little bit quietlybecause we had some real holes in the claim package that we had to close dealson, which we've done. We announced one about a month ago, and those deals nowhave consolidated everything we need there. And brought in data; it's almostlike at Los Rico's North, or Montefiore,we are renaming it Los Ricos North project, it's almost like we're starting allover again a year later where we were at Los Ricos South.

 We started looking at Los Ricos South, we had60 drill holes, and we went in there and started drilling and getting greatresults and showing, you know, building up a resource there, which we willstill get out in the next couple of months. And at Las Rico's North, we startedoff there, and once we got this deal done a month ago, that deal was reallypivotal for us. That also came with 50 drill holes, and they're not bad drillholes. There's a drill hole up there that's 24 meters at 27g/t Gold. Andthere's a lot of drill holes up there like that.

Sothe company we were dealing with, they were last in there in the early 2000s,and they just did a few small claims, and we were all around them with theclaims that we own, and they did a deal, they had a change of business. They'regoing in a different direction, in a different business and they contacted usand said, would you like these claims? I saw the drill holes; we said,absolutely. And it's not an inexpensive deal either. I mean, we're paying hereabout USD$450,000 over a couple of years, and you know, tying everythingtogether up there. Our team really feels that Las Ricos North, now at 50 drillholes. At an earlier stage in Los Ricos South because that's getting close tothe first resource and we think it should be a Million or a Million plus therein that first resource, Gold equivalent, that project to the North, Los RicosNorth, we feel that that has the potential to even be larger. And there's anold map that we have up there from 1916. from the Jalisco monograph, and thatmap shows 50 prospects on our claims up there.

Onthe Los Ricos South project, that map showed about 5. And we've got one of them,or two of them drilled now almost to completion. At Los Ricos North, we've hadone team, they're just out climbing those hills and prospecting and findingtargets to drill. And up there as well, we have the first three targets thatare ready to drill, and we're just now getting the final permits so we canstart drilling off those plus Ricos North.

MatthewGordon: So again, when we spoke before you thought you'd have the resource by theend of March, around now, right? You've just explained why that's sort ofsetback When do you think that'll be ready?

BradleyLangille: I think by May, for sure, we'regoing to get that resource out by May. And it is a little delayed, and we'vebeen doing a lot of drilling and we've just thrown a lot more machines at itafter the financing. You know, we're hitting good results. We want to geteverything into this main resource. I don't think, especially where things arein the world at the moment, that an extra 60 days will make much difference. Soit's better if it's cross, if it's a better defined resource and it is moremeasured and indicated, and if it's that's size.

MatthewGordon: Yes, well I don't think in today's market it matters if it's 60-daysout, if there's a reason for it, because people still, investors still expectmanagement team to do what they say, and if the reasons are good enough; likeyou're hitting some big numbers and you've got some more drill rigs in thereand they're still hitting the kinds of numbers that you wanted - that's fine. Iagree with you on that. But I think there's a need to, I mean, I've just lookedat some anecdotal information here, but you know, our viewing numbers are up70% in this last crazy month, and it's not necessarily because we're doinganything different. It's just because I think people are sitting at homewaiting for news because they're not allowed out. They've got to get the data,right?

BradleyLangille: That's a good point. We’re notdistracted with other things as much, right? They're actually at home, turning itup.

MatthewGordon: Yes. But they need you guys - guys like your company to be talking tothem and explaining why things are going on. So resource will be out end of May-ish.Is that fair?

BradleyLangille: Yes.

MatthewGordon: Okay. You're expecting 1Moz or so?

BradleyLangille: 1Moz or so. The grade we'reexpecting, you know, it's two to three grams. Two and a half to three grams isstill the Gold equivalent grade that we're expecting, and the things that we'refocusing on right now and take a little more time. We want to get some deep drillingin there because what we had seen as we drove this thing deeper and deeper,we're getting some great results. You know, we had one of our deepest holesthat hit 18m of 8g/t. Now that's something we want to follow up. That'ssomething that can be material to follow that up for the resource. And then tothe Northwest, on the trend that we're drilling, the 1,100m trend, we've beengetting some real good results there in a second war shoot that we're seeing. Sowe want to drill that and we want to include that in the resource. We want thisresource. We put out to best represent what we feel we have. And look, we're goingto have lots of news over the next 60 days about things like the SART beingfinished. We got lots of news over, lots of drill results coming out, andthere's some great drill results. I'm sure they’re going to come out in thenext 60-days. And we're going to develop that first resource that really is abetter defined resource as well; one that we can move quickly into a PEA.

MatthewGordon: Well, that brings it nicely on to my next point, Brad, which is; guyslike you, you've been there and done it before. We've been doing it for a longtime, successfully. You have bought, sold and made people money, which isfabulous, right? But you've got a picture in your head, and I'm looking at thisgoing, okay, we've got a 43-101 coming out in May. You have told me in the pastyou've got a sense of what this thing's going to cost. You've got a sense ofthe economics because you've built:  you've built plants, you've built mines, you havedrilled holes. You know what's coming down the line and you get a feel for it.But at what point, and how quickly can you get into some kind of economicstudy, which is what the market's going to look out at? First thing; probably aPEA, it's, you know, as a fairly early economic study. But how quickly can youget there? And when does a Pre-Feasibility Study happen? What's that timelinelook like?

BradleyLangille: Well, I think we can get therevery quickly, especially now with, you know, I look at it this way - I thinkthat if we can have an anchor on this project, this is where I'd like to end up- there's an anchor that's 1Moz. One pit, great grade and that we can put a PEAaround and it's solid. It's mostly measured and indicated. And we can do thatand we can say to the world, here's something that's solid. You put youreconomics around that. And by the way, we're a year behind up at the other endof the trend, but we're hitting some amazing drill results up there. And thenwe have the best of both worlds. Well, we have a mine that is producing cash,we have a project that now becomes more shorts than a PEA, but it becomes morenearer term, nearer-term economics, nearer-term production. And with a teamthat's built three mines, and we've rebuilt a fourth, you know, that peoplesay, well, these guys can sell it, and there probably could be a lot ofinterest from buyers, and also these guys can build it. And let's see where thedust settles here. Let's see what brings real value in the market.

MatthewGordon: But if we can, let's come back to the question, which was tell me whatthat timeline looks like? Or could look like.

BradleyLangille: Well, for the PEA; really drillingthis, all this drilling right now can actually shorten up that timeline as wellbecause when we're finished here we're going to have good data to do that PEA,and I think we can get that PEA done by the end of the year or first quarternext year.

MatthewGordon: Okay. Okay. So that's nice and aggressive. And then because of theamount of drilling, do you envisage being able to get a PFS out quicker? Becausethese are the signals, this is the language that is used in the market, again,to define how people value you. You listed off a whole bunch of reasons why youare very comfortable: because you've done it, you've done it, been there, gotthe t-shirt. I get that. But people need these signals from you. So thisaccelerated timeline is important to them because there's a lot of peoplescreaming for attention out there at the moment. So I'm just going to get youto tell me how you're going to do it.

BradleyLangille: I think about that in my head andfrom my experience, and my team, you know. And the key guys have been with me for10 to 15-years and we've built mines together. The way I think about it is thatwe drilled us off, we drilled us off, you know, we drill it off with themindset, how does this look in the mine? It’s not just that we're out doingexploration, we're building models all the time. We build PIP models all thetime, block modelling all the time. Every 10 holes we build, we added to ourblock model.

Sowhat I'm trying to say is that, you know, for us, we're really drilling thisoff for it to be a mine, for it to be big for, you know, for this to besomething very, very solid. This is not just promotion. This is real economics.This is real. Something that the institutions in particular, and we justbrought in some of the best institutions into that last financing and  those institutions can quickly see, and allof our investors, are able to see the real value in that. And at the same time,at the other end of the project, we also have something that's going to developto be what I think very, very large along with this. So you have the best ofboth worlds. You have one end of the project, which is Million, a Million plus,that is defined, that can quickly be moved through the next studies to get tothe point where you say - hey, this thing's ready to go. And at the other end,at the same time, we'll be building up the 1Moz up there. And that's just ayear or year and a half behind. So I think that is the strategy. I think it's astrategy that's going to get us the most value in the market, and I think it'sgoing to make us very appealing to some of our peers as well. So we’re notsitting there hostage, you know, just sitting, waiting for somebody to come inand make us an offer. We don't have to build mines.

MatthewGordon: That's my point; what have the institutions bought into it there? Theybought into the fact that you've got, you mentioned a word there - big. You'vegot scale to this. This is a very long strike zone we're talking about here,and you're sitting at both ends. And what's the idea? Do you sort of work yourway down and meet up in the middle kind of thing? Or do they have the option ofdoing that? That's what's going to get the big guys to take notice of you andstep in.

BradleyLangille: I believe that we have one of thevery best trends remaining in Mexico that is not developed. From my 24-years ofexperience doing this from building some large mines, and I believe that wehave consolidated what hasn't been essentially consolidated since, you know,the early part of the last century. And, and we are, you know, it's to come upwith things that are Millions of ounces -that's quite remarkable. I think, youknow, myself and this is my own personal view, I think we have a trend thatultimately with drilling and exploration success can be +5Moz. And it's just astrategy of how we develop what we see from our experience as being that hasworld-class size to it. And you know, part of that would be what's thenarrative in the market? What does the investor want to see as well?

Like,we could do good technical work; we know how to take a project and move itthrough the stages of resource, economic studies, and we know how to do itquickly. And we have a lot of experience that we know what's worth chasing. AndI'll tell you one thing, that 35kms of strike length and Los Ricos North, andthe project where we're now moving on to the next stage, resource and beyond.That's the things from my experience in my career that is exactly what weshould be doing right now with GoGold Resources, and I hold the same opinion.This is the best thing I've had in the last 20-years. Maybe the best thing I'vehad in my career. And we have the bank account, we have the skill, we have theexperience to develop this into what will be, I think the most attractiveproject in Mexico.

MatthewGordon: Brilliant. Brad, ultimately though you’ve got to deliver forshareholders. Okay. So there's a lot of positives today. It's a difficultmarket. It's mining; it was tough already. You're going to have to deliver forshareholders this year, and I think you're going to do that by bettercommunication, or regular communication with them, because it seems to me that youknow what you're doing and you know where you're going. So I appreciate yourtime today. Thank you very much. From your bolt hole to mine here. I hope weget out of this and the next few months but stay in touch. Let us know howyou're getting on.

BradleyLangille: I’m very sure we will get out ofthis. And we're continuing on as per normal, and stay safe.

MatthewGordon: Thanks very much.

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