December 5, 2018

Kore Mining Ltd (CVE:KORE) Focused on North American Projects

Midas Letter
Midas Letter
Kore Mining Ltd (CVE:KORE) Focused on North American Projects

Kore Mining Ltd (CVE:KORE) CEO Adrian Rothwell shares details of the company’s new project sites, acquired through a recent reverse takeover. The two new projects acquired in California are ready for mining to commence, while the projects in British Columbia require further exploration. Kore Mining has completed a drilling program at its Gold Creek site that features an 8.5 km trend of low-levels of arsenic in the soil, which the company has found to be an indicator of gold mineralization. Rothwell suggests that the price of gold is inversely correlated with the US stock market and notes that gold prices will increase as the US economy slows. Rothwell believes that a sound mining investment relies on two things: discovery and asset acquisition at low valuation, cautioning retail investors who are new to the mining space to consider these facts when evaluating companies.


James West:   Welcome back. My guest this segment is Adrian Rothwell, CEO of Kore Mining Ltd., trading on the TSX Venture under the symbol KORE. Adrian, welcome.

Adrian Rothwell:   Thank you.

[stock_chart symbol=”KORE:TSV” align=”left” range=”5D”]

James West:   Adrian, to be a mining guy these days is truly a labour of love, but you have been at it for 24 years, you were saying?

Adrian Rothwell:   That’s right, so it is a labour of love, and the most recent five years have been testing, for sure, in the gold sector.

James West:   Uh-huh. But you’ve managed to put together quite an assembly of assets, and they look quite promising from a former mining enthusiast’s perspective. Tell me about the flagship projects and the rest of them, too.

Adrian Rothwell:   Sure. Well, Kore, we just listed in the last week – symbol KORE, through a reverse takeover, and through that we have four projects of interest to us. We brought along two development-stage projects in California, one of which we acquired from GoldCorp, the other one is an old Royal Gold project, and we acquired that from Vista Gold. They’re called the Imperial and Long Valley projects.

Through the reverse takeover referred to, we acquired two really good quality exploration projects in the Caribou region of BC, as well. Yeah, so those projects we’ve actually done some drilling on, and we’re awaiting results.

James West:   Okay. The most recent press release you had that you drilled 25.7 metres 1.3 grams per tonne gold, and 11 metres at 2 grams per tonne gold, and that was at your Gold Creek project in the Yukon Territory?

Adrian Rothwell:   No, that’s in the Caribou. Yeah, we also have some Yukon projects that came from the incumbent reverse takeover company, Eureka Resources; they’re in the White Gold district. But yeah, what’s interesting about the drilling we just completed at Gold Creek was really, we’d spent the last eight, nine months while doing the reverse takeover process, going back for probably over 30 years of data and looking at soils and geochemical and geophysical anomalies, and really mapping that out on that project. And one thing that we came away with – and historical drilling, I should say, as well. There was a drill program last year by Eureka.

What we came away with was about an 8.5 kilometre trend of arsenic in soils, and we also found from last year’s drilling and from the gold in soils and geophysical work that that was a really good indicator for where gold mineralization was. So we mapped it out, we got our drill targets for this year, and we stepped out 300 metres from where the drilling was last year to test this target and test this theory.

So, really excited to see the last three holes, but on the first hole, it basically confirmed that thesis, that the gold mineralization is there, and the higher arsenic in soils is a great indicator for that. The arsenic’s not high enough to be a problem, it’s just it’s there as an indicator.

James West:   Sure. Okay, so just for the sake of my audience has become less mineral-focused, so take me through the value proposition of a company like this, for an investor. If I was to say to an investor, they’d say, ‘Oh, I saw you had a gold company on, how does that work relative to a cannabis investment?’ How would I explain that to them?

Adrian Rothwell:   Yeah, well, you know, I can’t speak to what the value proposition is for a cannabis stock –

James West:   You light it up, you get high.

Adrian Rothwell:   Yeah, there you go! But really, for a gold stock, it’s about two things: discovery, which is generally more prevalent in those earlier-stage exploration projects, and this is why we like the Fraser Gold or FG Gold and Gold Creek projects in the Caribou, as well. They’re a little earlier-stage, lots of discovery potential, and you know, you just talk about the gold rush and that is what creates value in this industry.

The other one is looking for opportunities to acquire good quality assets for a low valuation. And adding, like our Imperial Project, for instance, and Long Valley, these are projects that are very extensively studied, they’re well-known, they have – Imperial has a historic feasibility study on it, and there’s very little work that is necessary to get that into a mine. So what you’re really looking for there is the rating of that valuation to full value, which you will get once you are in operation, or once you’ve become a mine.

Now, that’s a longer lead time; and I guess as a third valuation is buying and selling. So buying and selling these assets.

So, you know, finding a buyer for Imperial, for instance, is one example of that.

James West:   Okay, great. So then, in terms of the gold market generally, you know, it’s more or less been characterized by sideways movement on average over the last five years. What is – and obviously the interest in gold stocks, exploration companies, is very much correlated to the price of gold, generally. Now, when it starts to trade sideways, the price of gold can jump up or jump down, nobody cares.

At what point in the price of gold do you see that the interest will come back to gold on a sort of broad-based level across the investor spectrum?

Adrian Rothwell:   Well, first of all, gold price, yes, it’s been moving sideways within a pretty narrow band for the last three years, almost. There’s still opportunities in that sector, and so we talked about the total volume of money may have not changed, or probably decreased since cannabis and Blockchain has taken a lot of speculation capital out of that market. But there’s still opportunities within that sector.

So – and that’s based on discovery and exploration, as well. In terms of where gold price is going, and what would drive that, you know, gold is very much inversely correlated with the US dollar. So while we see a strong stock market and US economy, you’re going to see gold really trundling along where it’s at right now.

James West:   So I guess that’s the opportunity, too, from a long-term investor’s perspective: asset prices are cheap, stock prices are cheap, buy a position now that, you know, you’re not looking to flip in cannabis time, which would be like two weeks.

Adrian Rothwell:   You really, yeah, you really see – when you start seeing cracks in the US economy or the world economy, for that matter, it’s a good time to start investing in gold. And we think we’re starting to see that in the US.

James West:   Sure.

Adrian Rothwell:   You know, this is a time where you can rotate out of those stocks, earn some money and invest in gold or gold stocks, and gold stocks is a proxy for gold.

James West:   Right. Do you see that – I mean, I listen to a lot of the cryptocurrency arguments coming from essentially what was a younger, Libertarian crowd who would have traditionally been the replacement generation for the gold bugs of our generation. And you know, the rhetoric is the same; but they’re proposing cryptocurrency is somehow superior to gold, though it lacks gold’s natural governing limitations such as, you know, the difficult of extracting it, and its scarcity.

Adrian Rothwell:   Yes.

James West:   We’ve certainly seen that cryptocurrencies, while maybe Bitcoin has a limit of 21 million in its totality, we can have 55 different versions of Bitcoin, Ripple, Ethereum, and it’s essentially endless.

Adrian Rothwell:   Yes.

James West:   So it’s, in many respects, it’s even more pernicious than a US dollar situation if you ask me. So that’s why I’m glad to see the cryptocurrencies kind of being put in their place, setting the stage for when the next sort of global recession starts to manifest, and people will sort of recognize, okay, like, crypto, maybe not, but gold? Definitely. So I think it’s a great time.

Adrian Rothwell:   Yeah, me too. Gold’s a physical asset, so you can’t duplicate it, you’ve got to find it somewhere, you know?

James West:   And you can’t delete it. [laughter]

Adrian Rothwell:   No, you cannot delete it. Yeah, exactly.

James West:   All right, cool. Well, Adrian, tell you what: we’re going to watch your drill programs with interest, and we’ll come back to you in a quarter’s time or so and see how you’ve made out. Thanks so much for joining me.

Adrian Rothwell:   Thank you very much.


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