Sokoman Iron Corp (CVE:SIC) (OTCMKTS:GDNDF) (FRA:3PJ1) CEO Tim Froude discusses the company’s impressive assay results from their drilling at their Moosehead Gold Project in Central Newfoundland. The assay results have been received for the first three of fifteen holes and the results confirm a high-grade gold discovery in an area with little previous drilling. The news did not go unseen by investors, rising 760% in the 8 trading sessions following the discovery. The remaining twelve holes results are expected in the next few weeks and will be announced along with Sokoman Iron’s future programs.
James West: Hey, welcome back to Midas Letter Live. My guest this segment is Tim Froude; he’s the CEO of Sokoman Iron Corp., trading on the TSX Venture under the symbol SIC. Tim, welcome to the show.
Tim Froude: Thanks for having me, James.
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James West: Tim, it’s very seldom I get to talk to a gold exploration company that has increased in share price by 250 percent since a week. So tell me, how did you accomplish that?
Tim Froude: Well, it was a very good drill hole that we drilled just in the recent couple of weeks, and obviously, yes, the market has responded quite favourably. Very high grade hole in a gold project out in Eastern Canada, actually in Newfoundland.
James West: Okay. What exactly was the intercept that got everybody so excited?
Tim Froude: 11.9 metres of 44.96 grams per tonne.
James West: Wow, that is indeed –
Tim Froude: And I’m told that that’s an impressive drill hole.
James West: It sure is. Starting at what depth?
Tim Froude: 109 metres down the hole, or at a vertical depth of 80 metres below surface.
James West: Okay, and so tell me more about the project. It’s called the Moosehead Gold Project; where exactly is it, and what’s the sort of geological setting?
Tim Froude: Okay, perfect. It’s located in north-central Newfoundland; actually the project is across the TransCanada Highway, goes right through it, and there’s a series of old logging roads that allow access to the central part. It’s under claim, so it’s about 25 square kilometres in area, and it’s a high-grade gold project that has had some work in the past, and it’s in a setting that’s similar to about 150 kilometres along trend from us to the southwest, there’s a project called Marathon Gold; they have the Ballantine Lake project, which is multimillion – 3 million ounces and growing resource that’s certainly bolstered attention of the region. But you know, certainly our drill hole, you know, it needs to be furthered, obviously; we’ve got work to do now, and we still have a bunch of holes, 12 to be exact, that are outstanding in the lab, and we’ll have those results within 30 days. And I expect to be back on the ground, drilling again, before October.
James West: Okay. What led you to this particular sort of site, this drill location where it was? Was there historical exploration results?
Tim Froude: Yes. In fact, there was. In fact, I was targeting a little deeper down the hole an intercept reported by Altius Minerals; they were the owners of the property. In 2003, they reported an intercept of 278 grams per tonne over just about half a metre at a vertical depth of 200 metres, and it wasn’t really followed up on. The project kind of sat dormant for a number of years; the project was in joint venture with a major, and things just kind of got stagnant there. So it wasn’t really followed up on, and I had my eye on this project for some time, and we were able to come to terms with Altius, who are now one of our largest shareholders; probably the largest.
James West: Okay.
Tim Froude: And we optioned the property from them, in fact, we took possession in March. So we’ve been compiling the data and putting things together. Yeah, so that led to having to make a decision as to where do we start with this project. It was one of the highest-grade intercepts on the project, the 278 grams, and I wanted to test that up-dip. So we positioned a hole to intersect that zone, where we thought we would get it, about 50 metres vertically from where they got it, but we intersected much shallower, further back the hole, to high grade. In fact, we hit two zones of grade in that hole: the one that’s obviously made all the news, plus a deeper intercept of about 9 metres grading 4.2 grams, but within that, a higher-grade plumb of 1.5 metres of just about 20 grams.
So we hit multiple vein structures above where we suspected we were going to get the intercept. So it came as a bit of a surprise, obviously, and certainly an area that had previously not seen any drilling, really, to speak, other than the holes that Altius had drilled initially.
James West: So the suggestion would be that there’s a great big theatre structure somewhere close by.
Tim Froude: Well, we’d like to think so. I mean, you know, big gold deposits certainly need big structures, and the structure we hit in the hole actually was over 80 metres of thickness in the drill hole. So, you know, it’s a significant structure, and until we get our heads around it a little better, we’re obviously going to have to do some drilling, you know, either side of it, and probably above it and below it, to get the true geometry of the thing. But that certainly we intend to address and focus with our next phase.
James West: Wow, okay. So let’s talk a bit about the share structure: how much capital have you raised to date, how many shares are outstanding, who are the biggest shareholders?
Tim Froude: Well, our treasury currently sits at about 4 million. We had, before the financing with Eric Sprott & Associates was announced, we had about a half-million in the bank, so we brought in about 3.5 million in capital new raise, but we’re also seeing the start of a warrant exercise. We have a number of warrants in excess of 20 million – I could be, you know, the number could be a little different, but that could bring us in another million overall, at prices between $0.05 and $0.07. You know, at the end of the day, we could have a treasury in and around the $5 million mark.
James West: So you’ve got more than enough to finish drilling this season.
Tim Froude: Well, yeah. I mean, I had budgeted a 2,000 metre program for Phase II, at a cost of about $250,000, but now it looks like I’ll be able to increase that program substantially, and trust me, that is in the works, right?
James West: Everybody wants you to. Right, huh, fantastic. So regionally, what is the – like, what other sort of gold mines are there around there, what other mineral deposits, what’s the history of the area generally mining-wise?
Tim Froude: Well, it has a history going back about 30 years. Mineralization was first discovered there by prospectors working for Noranda in the late 80s, a major Canadian firm that’s no longer with us. And the property basically just passed from hand to hand until about 1994, when Altius picked up the ground, and they were able to attract partners to a very successful company, and have done that for many years. And they drilled over a period of 20 years, about 110 drill holes. So there has been some work done, but no one had really sort of put it all together and figured out, you know, what it is they have there. So now that task falls to Sokoman and my team.
So in terms of properties that are close by, like I mentioned, Marathon, a 3 million ounce gold deposit and growing, just on the same structure about 150 kilometres to the southwest. But the immediate area itself has no real history of mineral production; the closest mine would be, or former mine would be, an antimony producer from 10 or 15 years ago.
James West: Interesting. So I’m guessing the 110 holes that Altius drilled were not in the zone where you found these discoveries?
Tim Froude: Well, they’re in the same sort of structural package of rocks, and I think that’s the key here, is that we have to figure out the structure. In Hole One – we drilled 15 holes in our program we just finished, by the way, and we’re still waiting for assays for 12 of them, in case I didn’t say that earlier – and like I mentioned, we were targeting an intercept with the first hole that they had reported in 2003, a high-grade intercept at a 200-metre depth. We were hoping to hit it at about 150 metres depth, but we intersected two zones of significant gold mineralization, significantly up-hole from that. So we feel that these are probably different structures that were previously unmapped, and it’s in an area with no outcrop, so you really only have your drill holes to fall back on in terms of geology.
James West: And the other 12 or 15 holes at the lab still, was there visible gold observed by the drillers at all?
Tim Froude: Well, I can tell you we’ve reported three holes. So the first hole, obviously, was the big hole; we have those results, and this is all public. In fact, the press release is on our website with the map. So we stepped back from that area to complete the program we had laid out initially, because we kind of wanted to stick to the plan sort of thing rather than just, you know, attack this thing without having a lot of good science behind it, which is coming.
So the remaining holes are all from what’s called the Western Trend, and it’s about 250 metres to the west of where the first hole was, the big hole. And we expect to have those results in two to three weeks, all of them, and we’ll put out a full press release on those results. And the basis for Phase II will largely incorporate that. So I have an idea of how large our next program is going to be, but I don’t really know where it’s going to be yet in terms of the full program. Obviously, a fair component of it will be directed towards the intercept in Hole One, right? That’s a priority for us right now.
James West: So lots of news coming yet this summer.
Tim Froude: Yes, yes, there will be. And you know, we expect to have, you know, two drills on the project for our next round, and upwards of – well, I can certainly guess 10,000 metres, you know, at a minimum. As you can appreciate, it’s only been a week, so we haven’t had a chance – and without all the results to formulate a definite plan – but, you know, certainly the treasury will allow us to have a very, very, you know, robust program moving forward.
James West: Fantastic, Tim. Sounds like you guys are making great headway. We will follow with interest, have you back when you release more results. Thanks for joining me today.
Tim Froude: Love to be back. Thanks, James.
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