Image via Margaux Resources/Facebook
The Kootenay region in southeastern British Columbia is steeped in mining history. The region is host to the “Kootenay Arc,” a 300-kilometre long geological belt exhibiting prolific mineralization that has captivated the attention of explorers and miners for centuries. A myriad of past and current producers dot the landscape with the region virtually holding its breath in anticipation of the next discovery.
Margaux Resources Ltd. (MRL:CA)(MARFF), with its seasoned team of successful geologists and mining businessmen, has aggressively made strategic acquisitions in the region in the past six months. Margaux has amassed a compelling portfolio of projects providing them with a significant edge, has the capability to excel and is positioned at the right juncture to capitalize on anticipated economic and investment catalysts.
Equities.com had the opportunity to speak with Tyler Rice, President and CEO of Margaux Resources, to learn more about the company’s impressive portfolio, diverse exposure to both precious and base metals, and unique strategic advantages.
EQ: Can you provide us with a brief overview of Margaux Resources and its operations?
Rice: Absolutely. Margaux Resources is a regional consolidator of mineral-rich, past-producing properties in a historic mining district. We’re consolidating the historic district proximal to potential customers, being Teck Resources (TECK.B:CA)(TECK) with the lead-zinc smelter, and Kinross Gold (K:CA)(KGC) with a gold mill. We see both commodities as opportunistic going forward given that we have had a recent bull run in zinc, and the outlook for zinc prices are very opportunistic. In addition, the Kinross gold mill is running out of feedstock ore for their milling process, so we see opportunity there as well. We’ve acquired a great portfolio of lead, zinc, gold and tungsten assets under our umbrella.
EQ: The company’s exploration portfolio includes the Jersey Emerald, Jackpot, Bayonne, Sheep Creek projects in the Kooteney Arc region. Can you tell about the potential and progress on each project?
Rice: The Jersey Emerald is our flagship property and it was the initial acquisition that we did within the Kooteney Arc. The Kooteney Arc is a well-defined geological lead-zinc belt that has been mined historically with the Jersey Emerald having operations from the early 1920s to when it shut down in 1973 for both lead-zinc and tungsten. The property shut down due to low commodity prices and the threat of the super tax by the provincial government at the time. We acquired that property in 2014 and we did an exploration program primarily focused on tungsten, as that was our focus at the time. During that program, we hit high-grade gold. It was 25 grams per tonne over 10 meters. We also hit high grade lead-zinc near surface, and had a very robust tungsten exploration program. During 2015 and 2016, we saw the markets pull back and we structured the company in such a fashion that we were able to weather the downturn and be in a position to capitalize on rising markets when commodity markets returned.
Our strategic positioning and timing presented the company with multiple opportunities, including the Jackpot project — an old Cominco property on which a number of drifts were developed throughout the 1980s. Cominco is now Teck Resources following a merger in 2001. Thereon we acquired an option on the Jackpot lead-zinc property, and more recently, the Bayonne and Sheep Creek projects.
The more recent acquisitions are past-producing gold projects with a historic resource that produced over 600,000 ounces of gold from various veins. We’re consolidating this district, which previously had several mining companies operating on it in competition, we now have the majority of that camp in our inventory. So, we have a diverse portfolio of commodity plays and a large land position within a very rich geological area.
EQ: Can you shed some light on the progress being made on your projects now, particularly in Jersey Emerald?
Rice: We recently closed just under C$4 million in financing. We’ve also completed the first phase of our summer program, which was follow-up drilling on the high-grade gold. We anticipate those results over the next month. In addition, we’re doing some surface mapping in the area where the high-grade gold was identified to help us better understand the gold situation on the Jersey Emerald project.
Our geologists are also just conducting their initial field work on the Jackpot, Bayonne and Sheep Creek properties as this is the first summer we have access to the sites. Shortly thereafter we’ll be activating our drill program for the balance of the Phase 2 on an allocation between the Jersey Emerald, Jackpot and the Bayonne and Sheep Creek projects.
EQ: What are the growth prospects in your target markets, particularly zinc, tungsten and gold?
Rice: We believe that zinc is very favorable given that the Lisheen mine and the Century mine of Ireland and Australia, respectively, came offline. Don Lindsay, the CEO of Teck Resources, has been stating publicly that there could be a shortage of zinc concentrate. So, we feel very, very bullish on the prospects of zinc. Tungsten will depend on what we see moving forward with the US, given that a major driver for the use of tungsten is military application. So, depending on what we see globally, there could be a move in the price of tungsten.
That being said, the Chinese control 85% of the world’s supply of tungsten and there is currently no domestic production in North America. So, we’re watching that market closely. With the price of gold, again we look to the global markets and the predictions that are out there in the public domain.
EQ: Can you discuss your company’s strategic advantages, your approach and what the properties are focused on?
Rice: Our strategic advantage is the fact that we are proximal to potential customers, being that there is a lead-zinc smelter about 35 minutes away from us. There’s no guarantee that we’ll be able to ship to them, but the amount of infrastructure that’s in place already with roads and access to our site greatly provides us a strategic advantage with getting the property to move forward from a 43-101 to a feasibility perspective. We have a diversified portfolio so we’re not fully dependent on any particular commodity. We also have great infrastructure in place and a local focus, I am actually living within the community we are operating in. As CEO of a public company, that’s different as you typically see leadership positioned in Vancouver or Toronto. What we’re doing is we’re getting our boots on the ground here. One, so that we can ensure that the investor’s money is spent properly. And two, to establish the relationships with community stakeholders. That’s been evident in my appointment to the economic development committee for the Village of Salmo where the properties are located.
Image via Margaux Resources/Facebook
EQ: Could you tell us a little bit more about your background as well as key members of the management?
Rice: Sure, I’m a Chartered Accountant by trade. Prior to Margaux Resources, I was involved with a Ukrainian oil and gas company, which we sold in 2009 to a Swedish company that had properties in Russia. The timing worked out quite well on that because of the Russian invasion of Crimea after that. Subsequent to that, I bought into a healthcare company that had 9 offices in Alberta at the time. That grew to 50 across Canada, three in Colombia and one in Beijing and we sold that in 2015 to a multi-national liquids company. That was a private company and that was very rewarding for myself and my family.
In addition to that, I was introduced to this project through one of my largest shareholders, Steve Letwin, the President and Chief Executive Officer of IAMGOLD (IMG:CA). His brother is the chairman of Margaux Resources and we’ve got a very robust Board of Directors. We’ve got a very strong advisory commitee which does include Steve Letwin and Dr. Victor Zhao, who was formerly with Barrick Gold (ABX:CA)(ABX) working as Senior Geologist for Project Generation in China. We’ve got Dr. Rogerio Monteiro, the founder of Vektore Exploration Consulting Corp. and he’s also consulting to Anglogold Ashanti (AU) and the Brazilian mining giant Vale (VALE). And then we’ve also got Chris Stewart on our advisory committee as well. He is the former Vice President of Operations for Kirkland Lake Gold (KL:CA).
Going right down to the management level, we’ve got Linda Caron, who is our geologist and VP of Exploration. She was formerly working with Kinross. She was working on the Canadian side of the border and looking for gold ore to feed the Kinross mill, which is in Washington. So, we brought her on in February and she’s been a huge addition to the team given that she has had over 20 years of geological experience within the area that we’re operating . Linda is Margaux’s QP and she reviews all our technical disclosure, including this interview, prior to its release.
EQ: That’s an impressive team. Are there any highlights, significant achievements or developments that you would like to discuss?
Rice: Yes. We’re working very diligently within the community and for our shareholders. I feel that we are significantly undervalued given the portfolio of assets and diversity that we have. We’ve got a number of drill results that will be coming out in the next month as I mentioned and there’s some other major environmental initiative that we’re working on that I can’t get into too much detail on at this time but it’s with regards to historic tailings and remediation thereof.
EQ: What are a few of the milestones and goals over the next few months that the investment community should look out for?
Rice: The investment community should keep an eye on us for a number of reasons. As we complete and announce our results for Phase 1, those results will help us identify the gold potential at Jersey Emerald, which has not been explored for historically. Also, the investment community should watch out for the development of this area that we’re consolidating within the Kooteney Arc given the diversity that we have and the results that we can bring through the drill bit with our very high powered geologists.
EQ: Great information. Before we go, do you have any closing comments, Tyler?
Rice: We’re feeling very optimistic about the future of Margaux Resources. We have funds on hand and a robust exploration program underway. The nature in which we’re looking to deploy those funds provides opportunities in the zinc and/or gold spheres, with a backstop in tungsten.
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