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Transcript: Roscan Gold (ROS) - High-grade Gold Developer With Ambitious Intent

April 28 2021, 15:07 GMT+01:00

Roscan Gold Corp.

  • TSX-V: ROS
  • Shares Outstanding: 285.13M
  • Share price C$0.53 (27.04.2021)
  • Market Cap: C$151.12M

Interview with Nana Sangmuah, President & CEO of Roscan Gold. Roscan Gold Corporation is a Canadian public company listed on the TSX Venture Exchange, which is focused on the acquisition and evaluation of gold properties in West Africa.

Roscan’s initial prospective gold exploration project is the Kandiole Project located in West Mali. The Company has assembled a significant land position in the prolific gold prospective Birimian rocks of west Mali and continues its efforts to acquire further permits in this region with the goal to expand its existing land package in West Africa.

We Discuss:

  • 2:37 - Company Overview
  • 4:21 - Senior Management Changes: Experience & Mission at Roscan Gold
  • 10:10 - Acquisition of 55 km2 Land Package: Why?
  • 11:32 - Money Matters: Cash Position, Raise, & Allocation Plans
  • 12:48 - Focus & Vision for the Future of Roscan Gold: Catalysts to Come
  • 19:08 - Mining in Mali: Business as Usual?
  • 21:03 - Growth & Development: Attracting Different Types of Investors
  • 22:48 - Market Dynamics, What's to Come?
  • 24:31 - Ending Thoughts

Matthew Gordon: Nana, how are you, sir?

Nana Sangmuah: Very well, thanks and glad to be back on your show. 

Matthew Gordon: I'm glad you're back on the show, too. You've been very busy since we spoke last August. How have you been keeping in yourself? All good? 

Nana Sangmuah: It is best forgetting about sleep and just plugging away. That is an exciting time for the evolution of the company. And we've been quite busy the last time we spoke and I think we've made some serious moves to show more of the trajectory where we want to take this company. And I think it's beginning to resonate as well. 

Matthew Gordon: You've been making discoveries, drilling high-grade holes of wherever decent widths as well may I add and it's starting to take shape. It's really starting to take shape and you're aiming for a resource update at the end of this year as well I understand. 

Nana Sangmuah: Right. I think we got to start putting some numbers to the targets and we are busy working on that. 

Matthew Gordon: Here's what I'm interested in doing today. I don't want to rehash all the numbers that you've probably said in every other interview. Like I said, you've got some great grades coming out of here, you've made some discoveries and done some acquisitions, raised some cash. I want to talk about where this thing's going in a second. But before we do, can you just give us a reminder or a 1-minute summary of what it is that you've got there and then I'll pick it up with some questions. 

Nana Sangmuah: Great. We've got great ground in Southwest Mali, which we have significantly scaled up to 402sq.km making us one of the significant land owners in a district that has yielded at over 6 Tier 1 discoveries. Our recent acquisition actually bridged the gap between the main shear zone, which is the SMC where most of the discoveries have been found and the new shear zone, which is our SMKS zone so it has clearly enhanced the exploration potential. And as a first step to find the oz you have to own the ground and do the work and you build the oz so that is going pretty well. And I think, basically, we've also noticed that the success and prospectivity of the region is showing quite well. We're very convinced that what we have could actually be very supportive for an economic operation. We're trying to look forward and build a team accordingly, so that we can easily transition into that role, and avoid the cares of a lot of junior explorers where the transition actually might come with a lot of cases and value destruction as a shareholder. 

Matthew Gordon: Okay, thank you for that. I want to come back to some of those points, because you make some interesting points there. But the moment this started to get interesting for me, and this became in fact, I think a lot of people in the market because you're about $0.40 when we last spoke in August and I think you're pretty much the same up until March ish this year, didn't really start moving. Then you made an appointment, which caught my eye, which was Venkatakrishnan, former AngloGold Ashanti CEO, that says to me, you've got serious ambition. You're trying to do something big here. So what was that conversation like when you approached them? 

Nana Sangmuah: Well, I mean, clearly people like that have seen quite a lot and they are not in the camp of proving up a million or two and high fiving themselves and somebody jumping in and he said, okay, great job. I don't think that's of interest to players like Venkat and say, Jonah who's also built bigger companies from scratch. I think what really resonates well with these guys is the building blocks of obviously hidden exploration success in more than 3 targets, with good grades confirming the scale potential available, having significant land parcels also shows that he can expand on the scale over time. So clearly, you've got the answers and it's not a promotional game of showing how many oz you've got. I mean, if you've got the oz, you got to convert them into money. So development and production becomes the next discussion. I have witnessed that in my role as an analyst where you have the exploration success with a lot of teams, but because the skill set to transition to the next stage is not available, one having access to capital becomes an issue because people always look at the team and wonder, okay, what can they do with our money, is it a science project or science experiment, or they've actually done and executed something in the past. And that's a box that we easily tick right now. If we look at what we are on track to achieve, even in production at the stage, without even fully scooping the oz on the ground, you can argue that you probably could put an operation towards the valuation which is meant to be very attractive for all. 

Matthew Gordon: Some aggressive conversation which I like but let me just say, I want to finish off with Venkatakrishnan coming on board. A lot of people have contacts in the market and they can make a hiring any day or two on the board. It looks fantastic on paper, and those people have got 0 interest doing any work for you. It's just a name on there to help certain companies to stand out or give them some sort of stature. Like I said, you had a more important conversation than that, you want these guys to do a job for you. So what have you charged them with doing? What are they going to deliver? 

Nana Sangmuah: Well, I mean, basically, obviously, these guys have seen it before and they are going to be the sages that guide us through the transition. The most important point I would like to highlight here is none of these guys are named rentals I think I'm a likeable person but I don't think I can pay them enough just to have a beauty contest on my board. They are very engaged, they contribute to every single meeting. And to be honest, they've been extremely helpful in planning strategy. It's sort of a strong alignment here. They got skin in the game, and they want to see this to a very fruitful success. As we move forward in terms of strategy, they're engaged and as we try to cross certain significant hurdles, further down the road, it's not a matter of trial and error, it's a matter of knowing some of the true and tested strategies that have worked on these and then run in with them. So it would definitely accelerate our transition, reduce the chances of error and help us actually maximise value for shareholders as we go down this path. 

Matthew Gordon: Right, maximise the value for shareholders. I'm glad you said that I can tick that box on my list of things CEOs need to say. But I've got to stick with it because I want people to understand how important it is right? You hire these guys to do a job to help you go from a small junior of which the road to success is littered with many train wrecks, you said it yourself in this conversation. There's not that many discoveries made. You've then got to get it through to some sort of economic success too because most of the seniors, I think you'd probably agree, look at these companies, know that they're not going to be able to get these things funded and they're going to fall by the wayside and they can pick them up cheaper at a later date. You've got some heavyweight guys on here, because you’ve done something a company of your size probably wouldn't necessarily do whilst you're working towards a resource update; you've got an acquired meaningful land package, just to the northeast of B2Gold's Fekola permitted area, Why?

Nana Sangmuah: Well, I mean, it's basically enhancing our exploration of site potential, it is real good real estate in those parts. And if it's available, you grab them, because there's a high likelihood that there's something interesting hiding under these. And as we get some success with our exploration, these land packages are actually harder to find and lay hold of. So once that became available, and we could have a good negotiation then we thought that was a significant piece of the puzzle to put into our coffers. Because quite frankly, the significance of that package has also given us exposure on another highly prospective trend which is the SMSZ zone, where several large discoveries have been made so we are getting the best of both worlds. 

Matthew Gordon: You’ve done some great exploration, you’re doing some nice development work, and you’ve now got some money, you've just raised some money, as well. What does the kitty look like today, how much cash have you got? 

Nana Sangmuah: Well, so we just closed $15M million not too long and we've got 6 rigs standing and so as quickly as money comes in, you start deploring some of that. But that's going to be able to give us a very robust drill campaign this year. And if you went through our prospects as we envisage in close to about 100,000m metres of drilling this year. We’ve done some already and we started with some of the results out, you expect sort of a more consistent news flow as we go along because we have multiple targets and multiple drills. I think as we move further down the pipeline, we should also be trying to do some scoping work as we start getting a bit of a good sense of how many oz we are going to be putting in the kitty in the near term, as a first stepping stone to the next stage of development and production. 

Matthew Gordon: Great, but do you focus? Do you hone in, what advice are you getting on that from because you got a lot of land now, right? The grades are good. You got multiple discoveries; you've even made some acquisitions along the way. You're trying to build a picture here and I'm trying to get a sense of what it is, and why you're aiming for the end of this year for resource update. Is that just a marker in the sand for the market or do you have a bigger vision than that? 

Nana Sangmuah: No, we clearly have a bigger vision that we got to bring the market along with us. I mean, it gets to a point where drill results don't mean much anymore, because people get used to it and people want to see what sort of bounces these things could sustain. They don't want to be there for a long ride and then you show them something that they didn't expect. So we want to walk with the market and show them the first initial estimate by year end. Quite frankly, we’ve been very disciplined and focused because our geophysics come up with several exciting targets as well and we could spend our whole lives just drilling this but what we want to do is to prioritise and keep our money on the targets that's going to give us the most oz, the best grades to move forward into putting some planning on paper for a mining operation and then we can continuously add to the kitty. Once we declare our resource triangle that is sort of the pipeline of projects for the market I think the market will be very impressed by how rich it is and how we can continuously be moving targets up in resource.

Matthew Gordon: Totally get that, so just help me understand where the focus is going to be for this marker in the sand that this resource update at the end of the year. Where's the bulk of your capital being spent because I get the optionality everywhere else but as I say you can't just keep drilling, people get a little bit tired of high-grade numbers for some reason I can't understand myself but at some point, they want you to show them how you're going to commercialise it. So, where's the focus of this going to be? 

Nana Sangmuah: So basically, we got 2 advanced targets right now as we speak, and we have drills standing on them, that is Southern Mankouke and if you follow that announcement today, we actually got another foot on the Southern Mankouke target, which looks to be a parallel zone, high-grade that is open and it's actually linking into our recent acquisition, which is the Mankouke West onto that geomagnetic structure that extends for about 22km into Kabaya. So it shows the ability to scale the resource as we go and those are advanced targets and we can work from those and devote more resources into those targets. Kabaya, we already inherited a resource there, we've shown that it's so open at depth, and we’ve taken some new zones, parallel structures as well that could also use some resources to bulk oz in those 2 major regions. And some of our earlier discoveries that we made, like Kandiole North that used to be pretty much not attended to at all by the market which showcased that the grades are improving. We tested this to a depth of about 120m vertical already, and is gradually making its way into an advanced target. We have others that will come along but like I said, we completed the prioritisation exercise from the geophysics, we think there are some low hanging fruits that could come into the mix, which we particularly look at. But obviously, we will just do enough to be able to come to something that is quite respectable by the end of the year, and provide us the framework to start doing our engineering studies and building blocks. We would not stop exploring, this is just going to be an initial estimate as we continue to bring other targets into the field. It is going to be exciting. 

Matthew Gordon: Yeah, there's a lot going on, and you've got some money to spend on it now. But let me come back to the mentality of the management team. Okay, because, like I said, I can read when it comes to all your press releases, what you've been up to and the success, etc. What I can't get from that is just how aggressive, how confident, how big is this vision on the extent of yours, because you've got B2Gold operating in the region, right? You've just bought some land near theirs, do you want to become an irritant to them so they come and buy you or do you want to be a challenger and compete, I guess it's $200M. It's hard to obviously talk about this, but I love people with ambition. And obviously putting people on the board like you have been doing recently suggests there's some ambition there. But is this, let's just keep going so we can make a little bit of money, or can you do something meaningful in Africa and be a challenger rather than a target? 

Nana Sangmuah: Well, I mean, I think that's a great question and the best way to answer it is to look at the track record of some of the guys that have come on the team. And if you think you're going to be pushing the likes of Jonah around, and the likes of Venkat around because you’re B2Gold or something. Well, good luck. I mean, these guys, I've seen it before they've been through the mill. They know how they can add value and they will vested interests in those ventures as well. So I mean, it's great to have good company in the district, it probably lets people know what we could become if we execute but the focus is really on our assets and what we can do. 

Matthew Gordon: That's good news, now talking about Mali, last time we spoke, there's a little incident, a coup obviously, that blew over fairly quickly, the African nations stepped in and helped out the UN to a lesser degree. Business as usual there at the moment?

Nana Sangmuah:  Yeah, I was there in October, met with the Minister of mines and other officials, business as usual that's why we were not really perturbed. And we added risks during the process because we knew that Mali would definitely have to succumb to its neighbours because they can’t be an island on its own because everything they do is dependent on exports coming through the borders which can be checked on them. So we're not surprised that the transition went well. Basically, the new interim government has done a great job in maintaining the business of government issuing permits, trying to make sure that the mining code is adhered to, and we've not had any to increase our land package size, from 250sq.km to 400 too big. And naturally, they've been very supportive of what we've done, because unlike a lot of juniors, that would mistaken good ground, to put a few holes in that and be willing to flip that 5x to somebody they've known that approach has always been to do the work on the ground, by so doing put a lot of jobs to the locals, and they see the benefits of activities, the socio-economic impact. I think we've become sort of ordinary.

Matthew Gordon: Right and tell me this given your understanding of how the markets work, you're an ex-analyst yourself, and you've got to talk to them in a certain way, companies at different stages need to say different things, right, you're talking about delivering a 43-101 at the end of this year, great. So it's fairly early stage for the process you're at, at the moment or stage of the process, you're out at the moment. So you've got a certain type of investor, right? So they're in for the high leverage exploration type returns, that they could hype to or they hope that they can get. As you go through the rest of the processes and start talking the language of delivering PEA and other studies, you'll attract a different type of investor again, that's going to take a while, have you really got the stomach to kind of go through that process and change your investor, register around to try and go and get more retail on board? Do you think you're the guy for the job? 

Nana Sangmuah: Well, I think I'm really ready for the challenge but I think it's a unique situation, because if you recall, what we will be doing is to advance the assets that we've put a lot more meat on into production, they'll still be generative work to be done and that is still going to satisfy the current investor base. Because if you keep upping some good grades on some of the generative areas, you're still getting that excitement in so I think we can carry both portfolios’ quite nicely as we move further along in the process. 

Matthew Gordon: How confident are you about this market? What's happening, do you know? I don't? 

Nana Sangmuah: Well, I wish I knew. I mean, basically, it's been quite a disappointing start for Gold but I think the interesting value of the metal has not eroded, because there's some good similarities that you could have in the crypto world, but I don't think they have all it takes to totally put it all to the side line. So I am very optimistic that we will see Gold coming in its own at some point, I really don't think that the interest rates proposition is sustainable, like going to be going higher to attract alternative investments, because the government can just afford to pay each kind of huge interest on the ballooning deficits and inflation is still going to be creeping based on whatever has been put in the system. So I think it's going to be actually quite interesting for Gold because inflation might be hitting and there would be less of a leeway to do anything to tame it down. And you have more people flooding into Gold, which has always proven itself as a good store of wealth. I'm confident eventually that's going to happen and quite frankly, it's good to have some of the speculative demand off the table at the stage, when they come back in is probably going to introduce a much more violent reaction. 

Matthew Gordon: Well, Nana let's leave it there because I wanted to talk to you because of the hiring and I just felt there was a movement there, a change which was made. I wanted to speak to you and see where your head was at. You come back on and see us again soon maybe when there's a little bit more activity with a drill bit and maybe we can get into the detail of the actual assets themselves and maybe some of the drilling but like I say I think, today for me and I think a lot of people are watching the show just keen to understand what's in your head and what the future could look like for the company but also for them if they stick with you. 

Nana Sangmuah: Thanks for the discussion. And like I said, we are very focused to build an exciting company. We think there's lots of potential to take us to the full 9 years we are prepped to do that, that's where we can maximise shareholder return and we continue to add value through great work on the other targets that we are bringing in and acquiring. So it's going to be an exciting ride and thank you.

To find out more, go to the Roscan Gold Website. 


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