Interview with Kevin M. Keough, President & CEO of Evergold Corp. (TSX-V:EVER) Evergold Corp. TSXV: EVER is a British Columbia-focused mineral exploration company that was founded in late 2015.
The company consists of four fully-owned properties from C.J. (Charlie) Greig, a renowned geologist based out of British Columbia. Evergold Corp. is primarily a Gold and Silver exploration company and they have also found reserves of Copper during their exploration at the Saddle Gold site.
The company was established by Mr Charlie Greig and the exploration is being led by Mr Kevin Keough. The team has is responsible for discover-ing major discoveries including the 16 million ounces 'Saddle' gold-cop-per discovery in northwest B.C. The company went public in late 2019 and its flagship assets include the SnoBall and Golden Lion. Their GT Gold Saddle discovery began in 2017, which was recently acquired by Newmont.
The SnoBall project is located in British Columbia's Golden Triangle region, while the Golden Lion is situated in the Toodoggone region of British Columbia. The Snoball project is a challenging terrain as it's located on a mountain top. The weather conditions are adverse, which leads to a drop in levels of productivity, however, the company's track record has been strong with challenging mining operations.
During their Saddle GT project, the company delivered promising results during phase 1 and this resulted in healthy financing options for phase 2.
The Golden Lion property has shown the prevalence of 100 meters broad and 500 meters long gold-silver bearing epithermal vein zone which features bulk tonnage-style grades near the surface. The company has allocated $1.5 million each to their flagship projects which are expected for a 2,500m drill.
They also started operations in Nevada called Rockland. this property features strong reserves of Arsenic and Antimony along with trace elements of Gold, Silver, and Halo. The company has allocated $400,000 funding for this exploration project as the early analysis has shown promising samples below the surface.
These three properties primarily feature epithermal systems which feature high-grade Gold and Silver.
They are currently equipped with a 33% institutional ownership, which is rare for a micro-cap company in its early stages. The company has successfully executed phase 1 of its flagship projects and is currently looking to jumpstart phase 2.
Evergold Corp. plans to start drilling on the Golden Lion project by June 15th, 2021. The next step would be to drill and explore the Snoball site by 25th July 2021.
Matthew Gordon: Why don’t you give people a reminder of what it is that you are, with a 1-minute overview and I'll pick it up from there?
Kevin Keough: Yeah, we are, let's call it a metal exploration company. Our focus is Gold, Silver, we happen to find some Copper in the big Saddle play up in northern BC, Saddle Gold. So it's Gold, Silver, and that's our focus Canada, primarily northern BC, Golden Triangle, Toodoggone, north of Benchmark. And then we picked up a property in Nevada not long ago called Rockland. All three of these properties are similar in character, their epithermal system so basically high-grade Gold, Silver is generally what we're looking for. We're fairly new company, well capitalised and a very good team of people. We've been through the ups and downs in this business.
Matthew Gordon: It's been a steady decline down now to whatever it is $0.28, what's been going on?
Kevin Keough: Well, we're back, of course, to where we started. We did our IPO in 2019 so we're back there now. If you ask me, I'm not totally surprised. To give you an example a lot of early-stage investors don't really understand how volatile this business is and a lot of them kind of think that you can guarantee a discovery method or get the stock out the door and hold it up there indefinitely once it gets up there. That's usually not what happens even if you discover something in your first kick at the can. That's really exceptional and usually geologists know in the field whether what they found as the wherewithal to become a mine, they know that fairly soon because of the widths and grades. But it still won't prevent you often going right back to where you were. Now, we did not discover last year, we did not deliver rather results that were exceptional enough to drive us to several dollars. We did that with the GT Gold Saddle discovery in 2017, which you might have noted, Newmont just bought them out a week ago. I set up that company, Charlie Greig and I led the exploration. We knew in our 1st phase of drilling, the way to discovery of merit, that could become a mine and that's actually going to be a huge mine and a very long-life rich mine and it's not far from a highway. But that drove us to about $2.80 and we went right back over the next several months to $0.45. That's where we started with GT before delivering the results. So here we are at Evergold. We actually did deliver a couple of very promising and in the one hand it's a Greenfield discovery, the Saddle kind of the Snoball prospect it's right in the heart of the traditional Golden Triangle. And it's a genuinely new, it's on top of the mountain way up there, shows all the promise of being in place for a long way down. It's kind of discovery, you know that the Golden Triangle is built on. And over Golden Lion, we demonstrated with the drilling, we have a huge Gold zone in place there and we think it's sitting on something better. So, the intercepts that we delivered from both those projects didn't really set the market on fire, right. We didn't deliver what the market wanted, which would probably be you know, 10s of metres of genuine high-grade. We got high-grade, we got 10s of metres but the 10s of metres was low-grade. So, I guess the only other point I'd make relevant to this is usually we hope to have 2 phases at least in our first kick at the can, on both those projects was our first kick at the can, because you always face a lot of challenges, just practical challenges, weather and other things when you set out. We got 2 phases with GT and Saddle several years ago, it was really the 2nd phase where we blew it open in terms of Saddle North discovery. We didn't get a 2nd phase at either Golden Lion or Snoball last year. In one phase only, and not much in the way of metres really, in the grand scheme of things. We think we learned enough from that 1st phase, to really get much better on the next go around. And that much better in a year where things worked out better would have occurred last year. So, we're trying to do soon what we had hoped maybe to get to doing last year, but just couldn't quite get there.
Matthew Gordon: Couldn't get there. Why?
Kevin Keough: Because of a couple of things. Our timing was bad. We got started later in the season. The weather was horrible at Snoball. We hadn't actually drilled there before, but it wasn't just the weather. Well, just briefly on the weather to give you an idea what happens. Have you ever been to Cape Town, South Africa?
Matthew Gordon: I have, yes.
Kevin Keough: So you know that Table Mountain phenomena, they've got the Devil's blanket, it's flat. But on a clear day, there'll be a blanket of fog in the east side of that mountain. Usually there is a, they call it the Devil's blanket, right? Anyway, and there's an interesting story about that, I won't go there. We had a similar phenomenon at Snoball, where it would be clear for miles around, even though it is a miserable kind of weather part of the world but it would be clear on those lovely days where normally you'd fly, there'd be at whole top of the mountain fogged in because there's a glacier in it. So, it prevented basically our flying like, we could not fly for days on end up there. The drillers would get stuck up in their survival shack for 36 hours straight so our productivity was half of what we had hoped it would be. The Rock was also very weathered and so it was a struggle and then the assays were really, really bad. So, we just couldn't get there and that affected our ability to finance right. With Saddle, GT a few years ago, we did the same thing. We had a phase I programme, and we delivered sufficiently good results that we were able to finance a 2nd phase, right in the middle of the summer. We weren't able to do that with either well with Evergold, you know. So, you know, I'm philosophical about it. I mean, you do know you're going to face these challenges, we faced more than we thought. And over Golden Lion, it took us longer to get our camp in place than we thought it would because it's more remote type property but the camp is there now, it's ready to go.
Matthew Gordon: You feel that you know enough now about how you should perhaps tackle it in phase II, which is great, but where's the confidence? Where's the confidence coming from that you're going to get it right now, with this new money that you got you raise some money in February, right? A lot of money?
Kevin Keough: Oh, yeah. Yes, we did and in fact, that should inspire some confidence as well, because we raised that very quickly and it was a bought deal, right. We didn't do any bought deals before and we did and we have now got about 33% institutional ownership, which is rather unusual for a very early stage micro-cap company like this. So why we did it going back to what you're saying before? You know, all of those things aren’t excuses. In fairness to the people who manage these companies, there are some things you don't, you cannot predict ahead of time, like the quality of the rock, it's one thing. No one's ever drilled it, you just don't know what your actual metre traits are going to be. We did discover, and we did deliver results of merit last year. What we delivered, were not those results were not enough to make it evident to the market that there could be a mine. So, I guess what we're looking for now and what we did deliver and what we're going to build on in the current year, is the fact that we've got high-grade results, we've got a big system in place at both Snoball and at Golden Lion. To give you an example of that at Snoball, we're on the highest elevations on the whole property, we're right on top, if anybody wants to go and look at the videos, they can see the pad on top of the mountain, we've got hundreds of metres of elevation below us to drill, it's virgin, and we're on top with high-grade. So, we expect we're going to get better widths, maybe very strong widths and better intercept, grades as well coming from there. Over at Golden Lion again, we've shown the market this in our presentations, I update those regularly, we have a big Gold zone, and it's been drilled by ourselves and Newmont way back when it's 800m long, this zone, it's been drilled. But the geophysics we did is really exciting because it shows that the best geophysical response is below where anybody has drilled which means that's the immediate target for our next phase. And if we had known about that last year, which we didn't, because we didn't get the geophysics finished till early September, we would have been drilling it last year.
Matthew Gordon: I noticed you’ve picked up Rockland and again I'm trying to work out have you bought that because you know something about his Snoball and Golden Lion that you don't like and you're trying to give yourself some optionality or what? So maybe we'll come on to Rockland in a second so tell us what are you going to do with the cash, where is it being allocated?
Kevin Keough: Yeah, the bulk of the cash we raised is going to Snoball and Golden Lion. And to give you an idea, we've got about, roughly similar programmes, we've got about $1.5M going into both Snoball and Golden Lion that is $3M in total, right? That will be roughly 2500m of drilling into both and it'll be targeted very specifically. Last year, we had more of a broad brush approach, we didn't quite know where we get the best response and going to Snoball, again last year, we didn't you know, we were very limited that we could drill up there if you've seen the extreme topography. This year, we know where we can drill, we can put new pads in. So, we're going to start with probably about 4 pads at Snoball. And then we'll be down mountain focused on this area where we just released results from a few weeks ago, we put out very high-grade rock and soil samples. We basically put our finger after the season closed last year drilling after the drilling season stopped, we went back to Snoball, and we trenched into the side of the Pyramid Peak, we actually found disseminated material in capsulating high-grade veins, which promises to give us much better widths and grades than we got last year. That may be the sweet spot, right? It's the sweet spots really what we're all looking for in these systems and you never quite know where you're going to get it. So we may have found it, it appears we have and if so we're going to try to follow it to death and that could get very exciting. Over at Golden Lion, I mentioned already that we did the geophysics and anybody viewing your show today can see that. They can go and see what I'm talking about but basically, there's a very sweet looking strong chargeability and resistivity anomaly that's just below the historical drilling. It's very evident on the section views that we coupled the geophysics with the drill results. That's the immediate target, we think that may be the core of the epithermal system down there. Now we could be wrong, it's not a totally risk free game as you know. But it's actually the work we did last year has given us very crisp targets to focus on this year.
Just flipping over now to Rockland because it's relevant. You know, I'll be honest with you, yeah, there is some optionality in that. We are very limited seasonally in northern BC, everybody knows it. Nevada is a good place to work, both because of the weather but also because it's very welcoming of this sort of work. But I have to tell you also, honestly, that we didn't actually buy it for that reason. What happened was in August, our key technical guy, Charlie Greig, Charlie was down there on other business for another company. And one of our directors Darwin Green, who's with Highgold, Darwin actually knew the vendor of this property and he liked it. He was thinking of Highgold but they had other things so he sent Charlie by to have a look at it and suggested Charlie and Charlie like that a lot too. And I wasn't keen initially, I don't like to get off and do other things. But you know, I looked at enough, I thought, it's pretty similar to Golden Lion because it's got a big drill Gold zone on it and BHP had it. Newmont’s been involved with BHP and all these places. It's drilled at 800 but where the real upside at Rockland is, it's got a really strong Arsenic and Antimony, trace element Gold, Silver, Halo for signature, we think it's sitting on top of an untouched Midas style or Sleeper mines style high-grade down in Nevada, they call them Bonanza place. It shows the hallmarks of being that halo over an untested high-grade system. So, we're going after high-grade there, and that Gold-zone at Rockland I talked about, it's not evident on surface. So it's not about tonnage or anything, it’s down about 150m so there's no chemistry on surface that would show it's there. It was drilled because of the alteration and the width was evident on surface. So that's exciting because we think the system is preserved but we don't need to do much on that property this year in terms of the money. I budgeted about $400,000 for it, we're already doing work in terms, we've got really good data, which is another, it's hard to get good data on Nevada place, because you know, every Tom, Dick and Harry's got their own data set, and they're all dispersed all over the place. So we happen to have almost all the historical data, and have already worked and done on modelling on that stuff. So, we're just getting into the permitting process. It won't be until sometime next year that we drill it.
Matthew Gordon: How much did you pay for it? or how did you pay for it?
Kevin Keough: Well, it was a 5-year deal, staged payments of cash. Also, Royalty, you know, you've got me on the numbers right now I'd have to probably double check. But basically, it's several million dollars in cash over a period of time and payments of shares as well but that comes in years 2, 3, 4 and 5.
Matthew Gordon: Let's come back to the Golden Lion, Snoball component, you've told us how much you're going to spend, how many metres you're going to drill, $3M worth there and you raised $8M, how much cash will you have left?
Kevin Keough: Yeah, well, you know, the agents and everyone take their share and so we have $7.5M right now and I've allocated that after the initial phase of work maybe we get lucky we really hit this in the first few holes and don't even have to do 2500m like I mean, hit these targets, we don't have to drill 2500m. I mean, we could hit it there if the juice is there, we could hit on our first holes. In any event, we have allocated about $2.5M just as a set aside so we really encompassing even G&A, our G&A last year amounted to about $70,000 a month, right 70,000 a month, which is very low. If you can go back to the bulk of our periods, and I'm talking about everything, right, I'm talking about office costs, I'm talking about marketing, IR, our travel all of it 70,000 a month well, we budgeted, you know, 100,000 for the current year. So we'd set aside $1.2M for 12 months, just put that aside. $3M on the exploration for Golden Lion and Snoball, $400,000 down in the United States. And then basically, we've got another $2M above that, which takes us to over $7M that we will just sit on and see what happens. And it will be deployed to a second or ramping up the programmes that are coming this summer, if the results weren't.
Matthew Gordon: I've been told you're a good geologist but do you feel that with the market cap or share price coming down, when it's down for the last 9 months, you're going to have to stop behaving like a geologist and start getting a bit cute with the market.
Kevin Keough: Yeah, and you do need to be sceptical of some of those other headlines. Because I've seen a lot of stocks flying like, if you're hot in rare earths, or Lithium or this that, a lot of those companies have a lot less than we've got. They’ve not done anything, they’ve not drilled, they don't have the zones, we have Gold zones and Silver zones that are in place on these properties that have been drilled.
Matthew Gordon: So what have you got to do?
Kevin Keough: You know what we need to do, the only thing you can ever do in this business, you got to deliver great intercepts with that sweet combination of width and grade, you know And that can be like gramme metres, you got to be delivering numbers that are over 100. 130, maybe, you know, 500, 700 with some consistency and that's what you got to do and that's what we're going to try to do. We have a sense from the work last year that we are just sniffing the fringes and now we've got to burrow into the heart of it. And then by the way, I'm not the world's greatest geologist, your people shouldn't think that. Yes, I'm a geologist but really, you know, I spend most of my career bird-dogging deals in the investment banking world. And so it's mainly been marketing and selling and the thing I can tell you, though, about, about this business, you can't kind of artificially create numbers and those numbers out there height and think that that's going to sustain your effort, maybe people who are foolish will by that pitch, but you know, it doesn't get too far. People can pick up on hype, and they can pick up and all that glorious, exceptional, wonderful language that is used. It's frankly, bullshit and people can read most of it pretty quickly. So, I tell people that this is a really high risk, very volatile little business we're in even if you've got really good people, and honest people, the stocks will be very volatile. I'm not sure to what degree a lot of people really pay attention to what you tell them right or to really, because I get questions from investors, which indicate they just don't get it. Like I mean, they don't understand what they're really buying into. So to give you an example, Matt, I tell people, honestly, with these early stage stories. Right now, with Evergold is a good time to get in because we are low, because it's the beginning of the new cycle, because who's going to be marketing and all of that, you know, ramping up now partly with the proceeds of the last financing, which is why I'm speaking to you. Although that's ramping up, we've got our money, and we're going to be drilling for the only thing that counts better results, right. So there's a good prospect and we always seem to go up even ahead of the drilling. So you buy now if we get up there I always encourage them to take some money off the table, before the drill results come out, because we can't guarantee what they are. Even if we're excited in the field and can see good looking stuff and can see it with XRF values and things. You know, you're so often disappointed, right? Gold can be there, but it may not be in that wonderful looking intercept so you have to be cautious. So I tell them, take some off, recapture your capital, your outlay at that point, and let the rest ride if you're feeling good, let it ride. Because yes, if we do hit, then yes, we've demonstrated, been true in all the places I've ever been involved with all of them, that if you do achieve results that are significant, you will go much higher and much higher, faster. But don't count on getting those results for certainty. If you do capture your profit, take some of it, especially get your capital, your capital back before the news comes and don't put too much of your money into any one of these little stocks.
Matthew Gordon: Okay, just talk to me about some other things you can't control. The weather you can't, assays you can't do more, you can't sit around and wait for assays results.
Kevin Keough: One thing I haven't mentioned we're going to try this summer actually comes back to what you were saying before about what can you do to really give the market maybe more sooner. We thought about that, yes, over the winter. But you know, you've got to think about what can you do, that's real results as opposed to just hyped air. We are actually going to deploy this summer one of these little drills. It's the parlance of the industry, they call them backpack drills. But they actually give you real core and they won't give you too much core. They don't give you know, 10-15m of core, that sort of thing but why that's important is like in a place like Snoball, where it's very precipitous every drill site has to be built. You got to build a pad and it takes time. And then when you put the big drill on, usually the way it works is you drill 100m-150m hole, maybe 300m, depending on where you're going. Usually, the system works that you drill the whole hole then you get the hole cut and sampled in the field. And it generally goes off as a hole to the lab and then you wait for the results back for the whole hole from the lab. So if there's a big hole, it just delays everything. The idea we've had with reference to the sweet spot I was telling you that we think we may have put our finger on it at Snoball, we're going to try to hit it with the little drill right out the gate while we get the big pads built. And this is also true at Golden Lion where we've got some really juicy stuff. It is exciting up there Golden Lion looks better than it did this time last year. But we're going to try to turn around, you can imagine if we can put out deliver a short hole in a day or two, we ship that right off to the lab and get our results back that fast. We'll put them on rush if need be just to get the real new cycle kicked in, before the big drills come on, so it'll just boost that flow. And that should deliver some pretty darn good results. I think because the rock that will be drilled are some of these rock outcrops that we just talked about in the news.
Matthew Gordon: There's a bunch of companies in the same position that it feels like and for me to kind of wade my way through this white noise, a sea of noise, all saying the same thing. What am I buying into from you guys? Why should I be putting my money in your company?
Kevin Keough: Well, I would say firstly, if you're looking to put money in, it should be a money into several but not too many, but several little players like us. And you should be looking for a team and you got to have a team. The team has to be good because you can't get with the industry being as busy as you say it is, as we know, this all white noise out there. To get things done in a timely way to get almost anything, you got to have the connections and reputation and we have that. And to get drills, to get aircraft, all of that we have it all, we can get it when we need it. So you want to put it in because we have the team, we have also delivered massive discoveries before. And the Saddle again, looping back, Newmont has just bought out GT Gold. And it paid, what was it 3, I think it works out actually the more like 365/share, actually, when you factor in all the warrants and everything else. They just bought them out and in my view, they could easily have paid double that. But I won't go there for the time being. So, we have the team, we have the money what more can I really say, we have the properties obviously in the prime geological real estate, but everybody claims to have that what we do. And we know what we're doing not we're not Johnny come lately and that's another thing honestly, you got to look at these people who's coming into these companies, how are they creating those companies? Are they through these facts? I laugh at the SPAC business, SPAC is just a CPC, maybe a CPC is in Canada for years, that's all SPAC is. But anyway, you're attracting all kinds of people who don't know a hill of beans about this business. We're only into this business now because it's hot, they all want to make a lot of money. Well, they should, that's fine. I don't mind, anybody want to make a lot of money. But the point is, they're not doing it because they really have deep connections in the industry or really, you know, they'll be gone as soon as the industry melts down and this industry does melt down periodically, right? The big ups and downs. So that's all I can say avoid the Johnny come lately, a team that's done it before, that does have good geological real estate, that maybe has some results in the ground that drill. It's not just a hope machine, although hope is a big part of it but you know, does that address, how else would I differentiate ourselves? While we're honest guys and girls, a lot of in this business now I got to tell you, and probably a few dishonest ones too.
Matthew Gordon: Let us know how you get on with that programme that you're rolling out. When does actually kick off when does that drilling starts do you think?
Kevin Keough: Well, better than last year we'll be going, we hope to be drilling by June 15th on Golden Lion. And to give you an example of how we're able to work things with contractors we've got the same contractor doing both projects that's what we're asking for. They will poke 1 drill on Golden Lion with 1 crew as and so we'll do Golden Lion first, leave the drill there we do the first programme there, leave the drill on site ready to go over to Snoball, Snoball drilling will start probably say around the 25th or so of July. And that's later than last year because we did learn about the weather phenomena, localised weather phenomena. Clearly the weather is best in July, sorry in August and September in Snoball. So we do Snoball, and then we go back to Golden Lion if Golden Lion results are really looking good because so we get going and hopefully that earlier start over there too. We get good quick results. We get them into the lab fast. We put them on rush. Last year, Matt, they stopped taking rush, the labs wouldn't take rush after about the 5th August. Just stop everything. We had 1 sample, 1 hole I think we managed to get in on rush turned it around in 2 weeks. Then it all stopped. So that's what we'll do and by the way, we'll be working on both properties regardless ahead of time as I said, with the little drill, we'll get going. So I should differentiate there, we’ll try to get them little drill underway maybe early July actually over Snoball, we get it underway maybe even ahead of June 15th over at Golden Lion. So that's the little drill versus the big one and we'll be doing more geophysics that was very effective at Golden Lion last year, we tightened up the lines and then we tightened up the spacing along the lines and that just gave you a much better definition. It helps us sort out separate the noise from the good stuff, getting your density of like that, but we are doing more. And by the way, there is something we didn't actually mention, before we go I will over the Golden Lion, you know, we've been focused on the GL 1 Main target there, which was the historical Newmont stone and that's a really substantial zone. That's the one where we think it may be better just for great dip a bit at about 150m level. So this would be a high-grade route to what's going on surface. But just 800m to the north, we have a developing prospect called GL 1 North Ridge and it's a grass covered Ridge, which is carrying very high Gold and Silver in soils as well as other trace elements, you know, up to 15g/t Gold in the soils and it's real soil, as grass covered up there. And we add this is the hole I mentioned before that we actually drilled this thing last summer we want the results back for it. That's actually bad result may come in well, depends on the labs, but we should I hope have that in June. But now I'm not saying we don't know I'm not expecting that hole to be blow out necessarily. We just don't know. Like our first hole at Saddle North A few years ago, the guys kind of dumped on and it, it didn't look that hard. But when the results came back, we could see and it was a vertical hole, the assays sample to sample we're going up all the way down the hole from sub economic, to you know, marginally economic, to economic then in a pretty good looking right and that was a 250m vertical hole where they didn't even log the last 40m of the hole. It was snowing, they didn't log it in the field. That kind of blew it off. They didn't even sample it until months after the fact. That was the discovery hole for Saddle North. Okay, so over at Golden Lion, GL 1 North Ridge, these Golden soil anomalies, it's blossomed further since we even drilled that hole, we did a lot more sampling. We're going to go over there, do more detailed geophysics, we're going to get the results of that hole, we may have actually drilled it the wrong way too. So we'll get that, that's every bit as big as a prospect is GL 1 Main is. By the way, they're busy. I hear talk that they're putting a bridge across the Toodoggone River, which is between us and Benchmark. I don't know if you've interviewed Benchmark. So there's probably a bridge going in there, temporary bridge at least there used to be one we can now get if that comes in, we'll be able to get to within something like 19kms even closer driving at the minute is by 25kms as the by chopper from Benchmark to our site. But they used to be able to drive there years ago.
Matthew Gordon: So a lot going on. Like I say stay in touch. Let us know as things progress. If you get some interesting numbers coming back from the assay. We'd be delighted to pick up the phone and take your call. Okay, Kevin, appreciate it.
Kevin Keough: Thanks, Matt I'll do that for sure. And we'll be working hard for shareholders, I'm a big shareholder and we know what we got to do.
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