Genesis Metals Corp CEO Brian Groves Podcast Interview

Genesis Metals Corp (CVE:GIS)(OTCMKTS:GGISF)(FRA:4TE2) CEO Brian Groves jumps on a podcast to discuss his company’s flagship Chevrier Gold Property in Chibougamau, Quebec and outlines the company’s development strategy for 2017.


Listen to the podcast interview with Brian Groves:



James West:   Brian, thanks for joining us today.

Brian Groves:  Hi James, thank you very much for having the opportunity to speak with you.

James West:    Brian, why don’t we start with an overview of the value proposition for investors in Genesis Metals?

Brian Groves:  Okay, thanks very much. I think that many of your listeners would be familiar with the extent of mineral wealth that exists in Eastern Canada, stretching from Ontario to Quebec. We’re fortunate to have a project in the Chibougamau camp; it’s probably not as well-known as Val D’Or or Timmins or Red Lake, but still, it has a long history of production, both gold and copper. It’s had a million ounces historical production come from the camp.

We’re very fortunate to be in that part of the world. Excellent infrastructure, very supportive government, certainly a mining-friendly jurisdiction within the Top 10 globally. So it’s a great place to be.

James West:    Okay, so what’s the status of your flagship project, and what’s the outlook for 2017?

Brian Groves:  The status is actually we acquired the project by way of a plan of arrangement, or a merger with a Toronto-based junior company, and that process typically takes a period of time, so we really only have been on the project since May of 2016. We were aware there was an historical resource completed by a company called Minova; some of your listeners may remember that as Falconbridge Copper, it was renamed as Minova. They did quite a bit of work in the 1990s and early 2000s, and they were subsequently picked up by the Toronto junior who did a compliant resource in 2009.

We have spent a lot of time collating data, establishing the availability of the drill core. We’re fortunate to have a lot of historic drill core available, and that’s a very, very good advantage because it saves us having to re-drill a lot of the deposit areas. We have the benefit of being able to go back and locate many of those drill holes.

So what we’ve done is started again dealing with an historical resource, which you know, of course, has to be treated as pre-43-101, so hence it’s not held at the same level as current resource estimates. We wanted to go back and validate the historical assay numbers that were generated by the likes of Minova and subsequent companies, to actually confirm that they met with current techniques and levels.

At the end of last year, we issued two press releases: we couldn’t reasonably expect to go back and re-sample 76,000 metres of core, but we went back and selected areas of mineralization from the main zone of mineralization that’s the known area of drilling on the property. And we actually had very, very good correlation. So it gives us a high degree of confidence in the numbers that were obtained by previous workers.

So the question is that this main zone still remains open at depth and to the north, so there is an immediate opportunity there to explore that. A lot of the thrust of our work, though, has been looking at the entire property. The main zone only occupies approximately three to four square kilometres; our Chevrier project is around about 95, 96 square kilometres. So it’s a bit of a land position, and appears, from what we can see, very little work has been done on the rest of the property away from the main zone.

So we’re in the Abitibi Greenstone belt area, we know that many projects have been worked and there’s been new discoveries, and we’re taking a very pragmatic approach of looking at the whole property to see what other opportunities exist, and we are very happy to say that we’ve completed a compilation of ore data from the property late last year, and we have generated new, high-priority targets away from the main zone, which will be the subject of drilling in 2017.

James West:    Okay, so your historical non-43-101 resource is roughly 300,000 ounces at, call it, 2 grams per tonne?

Brian Groves:  No, actually the compliant resource, which was issued in 2009, is 300,000 ounces at around about 2 grams.

James West:    Ah, so that was the compliant resource. So what was the size of the historical non-compliant resource?

Brian Groves:  Okay, and I’d have to wish you the condition, of course, all the cautionary language around that, that it does pre-date 43-101. It is approximately 500,000 ounces at around about 5.6 grams. And again, that is non-compliant.

James West:    Right. So is the 300,000 ounces that is compliant, from within that historical estimate of 500,000 ounces? Is that the same real estate, exactly?

Brian Groves:  It’s exactly the same real estate, and we are, a lot of work has been trying to establish the difference between the two resource estimates to see what the difference in approach was with the compliant resource in 2009 and the historic resource. And again, I just want to emphasize that Minova was a lead ship, mid-tier production company, so obviously they had confidence in the people working with them.

Again, that’s part of the process for us on this project, is to establish the relationship between those two resource estimates and see what we need to do to be able to update the resource estimate in a compliant fashion.

James West:    Okay. And so how much drilling are you going to do this year, in terms of meter-age?

Brian Groves:  The exact, James, is actually something we’re working on currently. As I mentioned, the compilation of the property-wide data set has generated multiple targets. We’re actually at the present time, we are initiating ground surveys to prioritize those target areas. So I think we can reasonably expect to see a drill program of at least 5,000 metres, but I suspect it could be much larger than that. Again, we are at the stage of defining the number of metres of drilling we do need to both look for extensions to the main zone as well as evaluate the new target horizon. So it’s a bit of a – it’s a work in progress, I think is the best place…

James West:    As they always are.

Brian Groves:  Yes, they are.

James West:    Okay. So now in terms of the neighbourhood that you’re in, in Chibougamau there, why don’t you just outline some of the larger operating mines that are closest to you so we can get a sense of what goes on at that address.

Brian Groves:  Okay. Actually, the Chibougamau camp, the most recent production goes back to about 2000, and that was the Joe Mann mind, a copper-gold deposit operated by Campbell Resources. It’s approximately 20 km from us. The nearest operating gold mine is approximately 100 km away, and I’ve just had a temporary mental block here in terms of the operation, but it’s approximately 100 km. so in terms of looking at synergies in the future, should we establish a viable resource on the project, it might be at the limit of trucking distances. But I think what’s intrigued us in terms of the belt – the Fancamp deformation zone in which we sit – is the fact that IAMGOLD has been attracted to the camp. It’s approximately – it’s working on a project called Monster Lake, which sits approximately 10 km to the southwest of Chevrier, on the same geological trend. IAMGOLD is, I believe, spending $17 million over the next three years to invest into the project from TomaGold.

So it’s intriguing to see a mid-tier producer such as IAMGOLD exercise that option to invest upon just early stage drill results. So it’s intriguing to see a company the size of IAMGOLD choosing to invest at relatively early stage. I think they’re keenly aware of the camp and the potential. We feel confident that we have a good geological setting. We’re poised to infrastructure…

James West:    Sure. So some of your drill results are quite spectacular. I’m looking at 10 grams over 3.4 metres, 7 grams over 4.75 metres…are these mostly starting at or near surface, or do these all occur in deeper formation?

Brian Groves:  With the previous workers have traced the mineralization down to a depth of about 300 metres vertically, but the main vein does come to surface, and some of the broader intercepts, there’s 23 metres at several grams and that was recorded as one of the confirmations in the sampling program that we did, that starts, that’s within about 15 metres of the surface.

We have a mineralized package which does come to surface. It has been trenched in a couple of locations as well, so it does sub-crop. That means that there is an opportunity there to – actually, we have to evaluate, if we are successful in expanding the resource, what could be possibly considered as a development scenario, looking at a starter pit, potential for underground.

Again, it’s a little too early, but again, we’re still seeing lots of opportunity to explore those possibilities once we have the resource updates in our back pocket.

James West:    Sure. And finally, what is the financial condition of Genesis Metals right now? How much money do you have in the bank, are you planning on doing a raise anytime soon? When was your last raise?

Brian Groves:  The last raise was actually we did a small top-up financing, our initial financing was at the time of, we did that concurrently with the closing of the plan of arrangement back in April, and we did a small top-up financing in the early summer. We’re now currently sitting at around $700,000 in the treasury. That actually covers, the money will actually cover all the fieldwork I just described, as well as leaving us with some flexibility up to the range of about 2,000 to 2,500 metres of drilling as well. So we still have the requisite flexibility.

We have a very low burn operation, you know. Our monthly overhead on the G&A front is probably in the range of $45,000 a month with everything in terms of salaries, claim status, rentals for office space and so on. So we’re trying to keep it as lean and mean as possible.

James West:    That’s great. Okay, so when does the drilling get started?

Brian Groves:  I think the best guidance I could provide to your listeners would be probably mid to late spring at the earliest. We are fortunate the project can be drilled year-round, but again, while we’re doing the grooming of the new target horizons and still putting the geological jigsaw puzzle together in terms of being able to identify drill core boxes and putting them into context, I think we’d be in some ways shooting ourselves in the foot if we race too quickly to a drill program. But I think spring would probably be a reasonable invitation to start.

James West:    Sure. All right, Brian, let’s leave it there for now. That’s a great first interview. We’ll come back to you in a quarter’s time and see how you’re making out. Thanks for your time today.

Brian Groves:  Thanks a lot, James, I appreciate it.

James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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