O’Brien Gold Project Growing as 140,000m Drilling Advances | Matt Manson

0:00Welcome to KitCo Mining, I'm Niels Christensen. Gold prices have once again touched $4,500 now and we're seeing a shift in sentiment at PDAC. There's definitely a lot of optimism in the world's biggest mining conference here today. And to talk about the mining sector and its project is Matt Manson, CEO of Radisson Mining. Thank you very much for joining us today. Thank you Niels, happy to be here. So you are CEO of Radisson Resources Mining. You're in the historic Abitibi region, maybe just let's start with your project a little bit. You know, what's been going on? You actually released new results today. Yeah, put out a new resource update, project's getting bigger. You know, we can talk about that. It's a very historic location where right on was called the Cadillac Lardaleg break outside the town of Cadillac itself, where three

1:02kilometers from Agnico's La Ronde mine, it's over the back fence. There's mines east and west. Welcome to the Abitibi. Well, yeah, so tens of millions of instances produce over the years. O'Brien itself was a former mine between the 20s and 50s and produced about half a million ounces back in the day. The company's been drilling this deposit for the last number of years. Today, we put out an update which really tells the market. It's an interim report. We're doing step-by-step resource updates here as we do this big 140,000 meter drill program. Yeah, and we've got the 1.7 million ounces in inferred resources. There are 82% on the previous estimate, which was just a year old. And then we're up about 8% in indicator resources. Overall, it's about you combine everything. It's about 2.3 million ounces. And we've been guiding the market recently. We think the ultimate target here is something is in the three to four million ounce range. So the old mine produced half a million ounces. We're already a multiple four times the size of the historic mine. And we think it's getting bigger still. How far are you into the drill program then? We're

2:07only about 25% into this 140,000 meters. So we expect to do another 72 and a half thousand this year, 32 and a half thousand first half of 27. And none of those numbers are actually in the resource update we put it this morning. That's all still to come. So obviously you did financing last year to pay for this over subscribed. I just you know we're at PDAC here. I love to get your thoughts on sentiment in the marketplace. You know what's it what was it like raising the money? It was it was efficient. It was positive. We went out with a 20 million dollar financing. The book was 40 million. It was twice over subscribed. This was back in October and the markets only I think gotten better since then. And that was actually just really the start of the rally in the junior resource sector. Yeah I think so and it was very institutional as well. So you know I've been in this game a number of years and I've seen much weaker markets than we have now. And

3:11and I think what what you're seeing right now you're seeing all the institutional investors are done very well. If you're running a gold funds you know you've been through a number of lean years. That industry has shaken out quite a lot and the patience has paid off the last 12 months have been terrific. You're seeing a big return of retail investors to this space and you're also now seeing a real return of generalists. So that's one of the things I wanted to ask as well because like so some of the sentiment that I'm hearing at the conference here is that generalists are still kind of shy to jump in. You know they're they're worried that you know maybe this price you know environment doesn't last or you know they're afraid that you know they missed the boat you know the mining sector you know had a sharp bounce off the bottom I think a hundred and sixty percent gains than the GDX even more than the GDXJ in the last like 12 months. I guess but you're not seeing that. Well look I think there are some fundamental factors of play here. Number

4:15one is that the the investment world is still seriously under invested in gold right and you've only recently had some of the big Wall Street names the CNBC kind of Wall Street names the Morgan Stanley's you know I know the JP Morgan's that you know they're coming out now with with guidance that you should have a certain proportion of gold in your portfolio right that's new right those guys were kind of very very you know the gold bugs you know we're not in that game now people are actually being told right with their 401k's in the US they should be learning gold directly as part of a diversified portfolio that's actually amazing as it sounds relatively recent right and still we look at the numbers that community of investors is still relatively under invested in gold and when you look at our in the world unfortunately gold goes with trouble times right and we're in trouble times unfortunately and there's no central banker anywhere in the world right now wake it up and deciding to sell some other gold reserves right that's just not a that's just not a factor yeah so we're certainly going to have volatility here right and we had a major correction about three weeks ago when gold last time gold got up to 5400 it did correct

5:18down to about what was the 4600 4700 44 yeah yeah that was an opportunity for the bears to kind of come in they are in decent damage and you know three weeks later we're back up again because the fundamentals are the same right they haven't changed so what does that mean for the junior sector well I think the junior sector is still seriously under values right there's a lot of juniors out there with $50 $100 $150 dollar evaluations per ounce that metric which is a common metric of the retail investor we use what is my market cap per ounce of gold so for example Radisson has has had a good 12 months as well but yesterday we were valued at about 160 dollars announced with the resource that we had yesterday with the resource we have this morning we're at $100 announced right valuation right there's your investments for Radisson so that those are those are nonsense numbers when you consider gold at $5,000 per ounce the ability to actually

6:18explore for these types of deposits are it discovery cost is 21 Canadian per ounce right build a business with that kind of valuation raise the capital to pursue the development of the project or build the project and you put all that money in with gold of $5,000 the margin which is there is has never been better never been better so so yes the junior sector is still systemically undervalued that's where the big gains are going to be in the next 12 months I think and you know our job my job as a provider of a of a junior resource company with a good asset and a fantastic location is to drill and drill because their owns is there and we want to show the market that's what we have what do you think it takes to get over that last you know that that wall of worry I guess or you know that to get the junior sector to catch up like I see you know producers like it's a fantastic environment for producers I mean that as you said margins nowadays are I mean every

7:20headline is pretty much record level margins record record level free cash flow does that need to flow down to the juniors like do we need to start seeing aggressive buying and M&A activity it always go it in terms of in terms of a bill market in resource stocks it always goes the same way right the money flows into the bigger names first the key note names and go as new modern barrican and eco-ego and then it goes down to the producers are able to show tangible quarterly financial results because of high goal prices and then it flows into the juniors right so it is a water fall of investment but what you're going to see in 26 Niels is you're going to see M&A right that is that you'll probably pick that up here do you think it happens because I think a lot of people were expecting it in in 2025 really do what what is it just this year is I think it I think it starts in 2025 I think either CTO is in 25 and it's going to accelerate in 26 and I think there's a lot there's a lot of capital being raised but the the the the the senior

8:22players in the in the some of the precious metals world right now have never had better balance sheets they've never had better financial results we've just had we've just had a round of quarterly reporting in the last couple of weeks everybody is paying a dividend it seems everyone's doing share buybacks there is there is money on the on the balance sheets of these companies I've never before and that is going to manifest itself in M&A I think likely towards the junior market and I think that's going to be a trend in 26 so how does Radisson stand out then like how do you how do you make the company stand out is it just is it is it the drill results is is that enough I mean what yeah I think why I think that the type what we've done this morning is where we've got this big drill program 140,000 meters and it's going to go all the way through this year into next year and so rather than wait until the end of that program to tell you what tangible results this drilling

9:25has given we've done an interim resource update no and that says about that says making sure that everybody understands what we have it's a quality project and it's getting bigger right so that's number one right and and that's the best way we can deliver value right now in our company in this in this environment and also to your economics is a little bit different because just I guess explain how like the the the production would be when you're in production because you're not going to actually have a mill you're going to be sourcing it out to you're going to be sourcing out the supply well I think you visited the sites right yeah and that number of years ago and a while ago a while I mean it's it's it's been incredible it's been incredible to see the growth in in radison and to see that how that deposit has has evolved so you would have turned nicely off the highway right um it's literally just off the highway and as you drive down highway 117 you're passing other means the whole way you've got you've got west with the one-on-one gold you've got a Laurent with the Nikoigo you've got Melartic with the Nikoigo you've got Casabra

10:27not Casabra I'm sorry it's for the Nautica Sigma Lamac right without a rato you've got the old lap a mine which closed in 2018 also in Nikoigo you see you're seeing the sign posting of mines the whole way down the highway right and there's an observation tower and lag preset in north of us you climb the observation tower you probably didn't do that but you climb the observation tower you can see the headframes the whole way left and right right this is that part of the world right and so it's almost a nonsense to imagine that you would want to build another mill and another tailings facility for this type of deposit in fact the heritage of gold mining the abatibi is that the mills tend to exist for decades right they you know they they go for they've got long-mine lives the tailings facilities are for long-mine life and successive war bodies are developed and put through these mills right and so we presented a preliminary economic assessment last year that was based upon that thesis that our ore would go to another mill and and we had a at the time we had an MOU when I am gold and we were working on a milling assessment for ore going to that particular mill at the do I end do I end mill but it could be any

11:29mill our dance card is open and free at the stage and and we show what the economics of that is and it's a very compelling economic picture because you're not building the mill you're not doing the earth's works of of a major tailings facility and and I built mines before I've got three in my and my résumé and and those are the costly and the difficult things to do so if you're just focusing on the mine and the ore is going somewhere else you've got a very very lucrative and high-value project does that how does that impact the sort of the the permitting process like he would that quickly would that speed up the permitting process of the fact that no tailings and stuff it you know no mining CEO should ever promise a bit sped up permitting processes but you know they're all working and and I and I have gone through permitting processes successfully so but it makes it simpler for sure yeah right because you're not having as big an impact on on your footprint is smaller and and and permitting is very much about the quantity of things how

12:34am I going to process how much how much how many tailings am I going to produce how much water am I going to consume and so it does make a simple for sure you know and but and just a point out though like I think the one mill when I was there I think it was like 15 minutes away like it was literally there's literally one three kilometers over the back fence yeah yeah yeah yeah yeah and so and listen our job in the situation is to keep an open dance card right how does our ore get into one these are the mills that's that should be determined right I think we've established the technical criteria and the value proposition of that situation happening but how is to be achieved this is a is a TBD it's so and so we drill and we make the thing bigger and and we go forward I'm just some more on the on the permitting process I mean obviously you guys are are based in Northern Quebec how how is the jurisdiction like I mean you know sort of politically wise um you know is it is it straightforward is the is you know will the bureaucracy be straightforward

13:35yeah well so I've I've permitted mines in two of the best jurisdictions in the world for mining I permitted the Renard Diamond mine and the James Bay Area of Quebec that was in 2011-2012 of 2013 we're doing the permitting for that I permitted the valentine mine in Newfoundland Labrador that was marathon acquired by caliber and opened into production by equinox to the best jurisdictions of the world and the reason that the best jurisdictions of the world is because the bureaucracy the people staffing the relevant ministries are competence and familiar with the mining business and and and you have a stable permitting environment right and and in Quebec in particular you've got a very very knowledgeable population you've got all of the services you've got all of the people you require it's and you've got generally a supportive civil society that understand the benefits of resource extraction done in a responsible and modern way

14:35right and so that is the most important bedrock to actually then move forward with a successful main permitting and main development process so I've done it before in Quebec and and and you know looking forward to seeing or Brian you know become another producer so I guess what's next I mean obviously you know continuing with your journal program you still have you know 80% of that to do but what what do you see what's what's the future of radiance yeah you know let's see I mean it's a public company so ultimately solve a shareholder value right we know a Brian is going to be a mine our board again you know on our board we've got my cushion tilly is an important cornerstone investor he's on our board a major shareholder and we've got Pierre Baudouin who built Canada's biggest gold mine detour I've got three mines in my resume we've got Peter McPhale former chief offering officer of alamos he's got three mines that we have nine mine builds on this

15:35board so we're very capable as a team of taking this all the way through the production right um and and what all of us need to see coming to this we're not here to drill this deposit for the next 10 20 years right we're not there for the expiration either the expiration is going really well right couldn't couldn't be happier with that but we're here because there's a mine here for us we have to see the mine and so our job is under what conditions and what form that does become a mine right so as we drill and we make it bigger it's becoming a better mine but it's a mine right and so I think wash a space to see how it actually develops over the next it's really interesting me and I think this is how sentiment has changed in that um not a lot of CEOs sort of talk about actual building a mine you know like I mean what what would it take for you to you know sort of move forward with with with Radisson again it's it's value right I mean um they're they're always forks in the roads right and ultimately has to be what is the best value outcome um and uh yeah

16:42I've I've taken I do I can well I guess do you think a mine could be built like you know given given you know the the financing um you know all of the like the the the costs around it do you think it would be possible to get the financing to build the mine oh yes oh wow yeah like if I had asked you that like you know maybe a year and a half ago I think that would be a very different answer I would have said yes then as well but but you know but it is it is um look good projects attract right that's the basic rule right um and uh this is a good project and this also has a very particularly efficient capital profile right especially if you're not building your own mill and tillings facility if it's going as a satellite deposit to somebody else's existing infrastructure we had a in the PEA we put out last year which was based just on 2550 gold price uh and a snapshot of the resource that we presented today we had a three times ratio so it's a useful metric

17:47between NPV at 5% and the capital cost of 175 million dollars right three three to one ratio right and so that is a really for investors that's a really important metric of any project study right what is the ratio between the value and the cost because that's ultimately telling an investor you know it's providing the project financing uh what what the rate of return of this is going to be and and what the risk profile is going to be and how it's ultimately available the capital is going to be for you right so O'Brien has a fantastic profile in capital efficiency on that basis and again that was a snapshot study of something that as we've demonstrated this morning is drawing quite considerably so what's the biggest hurdle then you know is it just is it making yourself like it's it's a fairly big space you're like this there's a lot of juniors out there sort of you know buying for attention and stuff like that you know is is that the biggest hurdle like what is the biggest hurdle do you think uh the biggest hurdle um it is uh uh uh uh we look

18:48I I wouldn't say we worked hard over the last I'd say 18 months improving the profile of the company improving liquidity of other stock trades the mechanics of a public company seeking and seeking investment and seeking valuation so um I would and now if you're a junior resource company it's easier than before to get that attention because there's a lot of people looking for good resource projects right now to invest in um it's it's it's certainly true under the hood of our business you know we are short people in our industry we're short geologists we're short drillers we're short drill rigs luckily we've got very good relationships in Quebec and we've got eight rigs secured with our GLL our our drill contractor but the whole industry is is straining it the seems a little bit because so much money is being raised so much opportunity exists and we don't have the people and the and the resources to actually fully maximize the business so that's

19:49an under the hood type thing right which doesn't really necessarily impact the investment thesis um but look this is I was at an event last night and somebody said this is the best in market for investments in resource stocks that they can remember and there's been there's been a lot of good markets and bad markets and for someone to say this is the best ever that's something and and I and I think that's probably true yeah well and you mentioned it I mean the healthiest balance sheets for senior producers in recent history and it may be even history like it's just you know nobody's nobody's chasing uh to buy back hedges nobody's you know overbiting project like it's just everybody's I think everybody's sitting on a big stock pile of money wondering how they're going to to utilize it we think we have a terrific project that's multi millions of ounces and it's getting bigger and there are gold producers out there that are making our market cap in cash flow every two to three weeks right that's how to think about this

20:51um Matt thank you very much for joining us today and fantastic conversation I uh I wish you guys luck in your uh in your drill program thanks ails excellent thank you very much thank you thank you very much for watching Kiko Mining tune in for more content from PDAC you