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Labrador Gold Corp (CVE:LAB) Technical Advisor on Gold Potential of Hopedale & Ashaunipi Properties

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Labrador Gold Corp (CVE:LAB) (FRA:2N6) is an explorer-led company aggressively targeting Labrador’s under-explored gold potential. Technical Advisor Shawn Ryan was instrumental in starting a gold rush in the Yukon in 2010 and 2011. Ryan explains his role in creating best practices and describes the new exploration technique he created in 2011, Drones to Drills, a much more economical exploration technique than available at the time. Labrador is virtually unexplored for gold with only 10 gold occurrences recorded. Labrador Gold has two main projects in the region, the Hopedale Property and the Ashaunipi Property. The company’s summer drill program includes drilling 20 targets by September at one of these project sites. Ryan estimates the drill program will cost $500,000 and notes Labrador Gold has approximately $800,000 in the bank and is in the middle of a $1.5 million capital raise. Ryan hopes to find a deposit in the 2,000,000 to 3,000,000 ounce range to interest a large mining operation in the site.

Transcript:

Ed Milewski:  Well, good afternoon. Joining me now, we’ve got Shawn Ryan with us. Shawn, you’re a famous guy.

Shawn Ryan:   I’m a prospector.

Ed Milewski:  Shawn was instrumental in causing a gold rush in the Yukon back in –

Shawn Ryan:   Yep, 2010 and ’11.

Ed Milewski:  Yeah, 2010 and ’11. Very similar to the Yukon Gold Rush 100 years before that. And I remember thinking, man, this thing only take place over two years, and people were going up there and telling their neighbours and selling their kids and packing up and trying to find gold.

Shawn Ryan:   Yep, in 1898.

Ed Milewski:  1898, wow. So you know, I was involved. I work with Mike Ballanger at Union Securities; we were involved with TACU, was a stakeholder in another one. So your name – and then I went to a presentation that John McMann, who’s got an office here – did a great thing at the King Eddie, and you think that was the kickoff?

Shawn Ryan:   That was the time, if there was a spot that got the world excited after me coming out of the bush and talking about the methods how we discover gold in the Yukon, and how relatively easy it was. It was just a deeper soil, it wasn’t super high-technology.

Ed Milewski:  Yeah. But you’re not a scientific guy. Like, you’re not a formally educated guy.

Shawn Ryan:   No, no.

Ed Milewski:  You’re a prospector, basically.

Shawn Ryan:   Yeah, and a researcher.

Ed Milewski:  And you grew up in the –

Shawn Ryan:   Timmins camp.

Ed Milewski:  Yeah. So you know this area. Like, you know –

Shawn Ryan:   Well, I know what the big companies need. Like, as a business, if you’re a business, if you look at it like a business, you know what the majors got to see. And they have this certain criteria. Like, you could work for the juniors, and some guys are like, you know, fly-by-nighters, but the majors actually have, they want to see a very strict regimen of how you look for gold, and so, and they don’t want any BS. So you have to do it scientifically.

Ed Milewski:  Yeah. You know, so just so you know, I’ve been around – I’m 40 years experience in Bay Street, and I have an accounting background and blah, blah, blah, but what we had going for us back – I’ve been looking at the price of gold since about 1980.

Shawn Ryan:   Okay, yeah.

Ed Milewski:  So 1980, that’s almost 40 years. And I remember, you know, gold was in the tank in the 80s and the 90s after that big move in the last 70s, and then, you know, your timing was perfect, because gold, you know, prior to 2000, I think it hit around 200, 250. It was sitting there, nobody gave a shit about gold, you know, blah, blah, blah.

You come along, you’re doing all this stuff, and then gold goes ballistic after the financial crisis of 2008, and peaked in 2011. And here we are. Now, it’s backed off, but not – no, it hasn’t really backed off that much. I mean, it’s 1200, 1300.

Shawn Ryan:   As someone said, we’re still $1,700 CDN. So we’re still in the market.

Ed Milewski:  Finding gold in Canada is not a bad place to find gold.

Shawn Ryan:   No, that’s exactly. So that’s why we can’t get –

Ed Milewski:  So tell me about LAB. You’re taking what you learned –

Shawn Ryan:   What I came up with is, doing our magic in the Yukon, it was a great spot. Then I realized some of my higher-level customers, like the majors, would like to see new districts found.

Ed Milewski:  So you’re talking to majors all the time, eh?

Shawn Ryan:   That’s right. The majors are my customers. They’re like, that’s the guys who my end customer is. So I’ll deal with juniors in between; so I’ll find a nice company, a good company that I like their management, I’ll usually buy a position into the company. Then my project’s in, and then basically work with these guys. And so, now, I don’t want to be the president; like, I tried that once, I didn’t work. [laughter]

Ed Milewski:  Yeah, you like being outside, right?

Shawn Ryan:   My job is to be the guy on the ground, the boots to the ground, the technical guy.

Ed Milewski:  And do the odd –

Shawn Ryan:   Come out and do presentations.

Ed Milewski:  Be a movie star.

Shawn Ryan:   So the idea is that, but my love and my –

Ed Milewski:  Sure, your nature.

Shawn Ryan:   Well, I’m like the guy to solve problems in the ground. Because everybody does it one way, but sometimes there’s better ways. So my job is as a researcher guy, is, can we do it better? And never say, well, this is good enough. No, it’s never good enough; there’s always a better way. So that’s my job. I call it a researcher. I come up with better techniques.

So when the 2011 rise came up, we came up and everybody left. I actually threw a bunch of my own money in with Ground Truth, and we designed a new exploration technique. It’s called Drones To Drills, and it’s basically $0.30 on the dollar compared to 2011 exploration techniques. So we came up with a bunch of different ones, and so now, once we fostered that and basically figured out how to work it, and applied it in the Yukon, we got another – we got one of the companies rolling called White Gold Corp., but then what I decided to do was start researching outside of the Yukon, and we ended up in Newfoundland and Labrador because they had a good database. And then I started realizing that Labrador is completely virtually unexplored for gold. Everybody knows it for nickel, iron ore, uranium, but nobody’s ever…so there’s only 10 gold occurrences in Labrador.

Ed Milewski:  Ten?

Shawn Ryan:   Ten known gold occurrences.

Ed Milewski:  So when you say ‘gold occurrence’, are you talking about finding gold at surface?

Shawn Ryan:   Yep, in a rock, and that the government guys noted it.

Ed Milewski:  We’re not talking pyrite, we’re talking –

Shawn Ryan:   No, no, yeah, yeah. But there should be hundreds in Labrador, if you’re doing this right. So I said, well, this is reminds me of the Klondike, the Timmins – like, not the Timmins Camp, but the White Gold Camp, like Dawson District, where when I first showed up there 20 years ago, 25 years ago, there was no, hardly any hard rock showings in that areas. Lots of plaster, but no real hard rock.

So since then, we found up to 7.5 million ounces and it’s building now, so I kind of said, well, once I started looking at the Labrador research, I said this has got some legs here! So I’ve just got to do some of my magic in there, go in and do my technical thing. So what I did is, I found this company called LAB Gold, they were Nicos –

Ed Milewski:  So you’re a major shareholder of LAB Gold?

Shawn Ryan:   Yep. I think I’m about a 10 percent or somewhere.

Ed Milewski:  Ten percent? Okay. Okay, I think I looked it up and I think there’s about 50 million shares, something like that?

Shawn Ryan:   55, yep.

Ed Milewski:  And it’s trading at $0.20.

Shawn Ryan:   Twenty cents, twenty-one.

Ed Milewski:  So it’s capped about $10 million.

Shawn Ryan:   That’s right. So now what I was able to do in the last two years with it, I optioned them, I took – I kind of did the same thing like we did with White Gold: I put all three big projects, 7,000 claims, under one company, knowing that statistically, we’re going to flush this out; we’re going to drop some claims. And so since then, we’ve dropped, we’re down to probably 3,500 claims. So we’ve now high-graded, and we have two nice projects out of the first original three.

Ed Milewski:  And these haven’t been drilled yet?

Shawn Ryan:   No. So I call it, I’ve been blessed or I’ve been lucky that I’ve been holding the market back from us drilling. So now we’ve done, over the last two field seasons, about 28,000 soils and bulk projects, so now we’ve honed it down to some high grade soil targets, and what we’re going to do this summer is, we’re going to actually go in and do some good geology and prospecting work, and then come up with some drill targets and try to drill at least 20 holes on one of the projects in September. So it’s going to be just a small program, but it’s because the delay time of getting assays back in the holes and rocks.

Ed Milewski:  So you’re going to do, so you’re going to drill one of the projects?

Shawn Ryan:   Yep, yeah.

Ed Milewski:  And what’s it going to cost you to drill 20 holes on a –

Shawn Ryan:   What we’re bringing in is our lightweight rotary air blast drills, so they’re light, they’re easy. They drill 100 metres in a 12-hour shift. So it’s about $500,000 to drill 20 holes.

Ed Milewski:  And you’ve got that money now, probably?

Shawn Ryan:   Yeah. We’ve got $800,000 or $900,000 in the bank, and we’re doing another $1.5 million raise right now. So then we’ll basically use some of those funds.

Ed Milewski:  But how deep will you drill?

Shawn Ryan:   We’re only – because they’re all surface gold showings, we have up to 8 grams in soils, 3 grams in soils, so we know the money’s right there somewhere. So the idea is just like the Yukon: they’re daylighting. I’m not looking for blind deposits.

Ed Milewski:  Yeah, yeah. You’ve got reason to believe that this is indicating hey, there’s something here.

Shawn Ryan:   Yeah. No, no, so we used the same –

Ed Milewski:  This has never been drilled before?

Shawn Ryan:   No. Nobody’s hardly, nobody’s ever looked at this since the 80s.

Ed Milewski:  Is this an area that’s easy to get to?

Shawn Ryan:   Listen to this: one of these is 15 miles from the railhead by Shefferville, that’s one of them. And the other – so that’s this Archean, basically, belt.

Ed Milewski:  I asked that to a guy one and he said yeah, it’s easy to get to by helicopter.

Shawn Ryan:   Yeah, yeah.

Ed Milewski:  I can get you right to the helicopter by car.

Shawn Ryan:   But the second project, no, no, what you’re asking is the key questions the majors already confirm with me, because I already shopped it to them. And they said, you just passed our tests.

The second big project I have is tied to Tidewater, and basically we get our fuel off the ocean. The guy drives in on his barge. So the point is, both of them, location is actually in good spots. So potential, both – one’s a greenstone belt; I staked an entire greenstone belt over 50 miles of it, basically 80 kilometers, that people found gold, but it was Falconbridge, and that’s on the east coast by Hopedale in Labrador, and Falconbridge tripped over the gold looking for nickel because it was an alternate thing.

Ed Milewski:  Right, right, right, right, right.

Shawn Ryan:   And then the first guys to come and look for gold there after Falconbridge, they did a kind of a joint venture with 96. Bre-X hit in 97; they never returned.

The next crew to come in was 2003. Gold was $280 – and they found more gold and never returned. So I kind of walked in and said look it, this has got to get a good hit, here. And so we went in and did our big regional magic, cut across with these ridges and spurs and doing soil techniques, and they lit up. So now, like I said, we’re doing the same approach as we did in the Yukon, and they’re big targets, and they’re basically – so that’s what I need to find, is something in the 2 million to 3 million ounce range.

Ed Milewski:  So that’s my next question. Are you – you’re looking for at least a couple of million ounces?

Shawn Ryan:   Yeah.

Ed Milewski:  And that’ll get a major interested.

Shawn Ryan:   That’s right. So –

Ed Milewski:  Especially if it’s near surface, obviously.

Shawn Ryan:   Well, that’s right. So it’s potentially open-pittable. So that’s kind of what my job is to do, is flush these targets out, get in there, get it all set up, start the drills, get it ready, and then once we start making the kill shots and the hit, my job is done. Then we move on to the next ridge, because I’m the recon team. That’s what my job is.

Ed Milewski:  So just to be clear: how many public companies are you involved with?

Shawn Ryan:   Just with two of them, now.

Ed Milewski:  And one’s in the Yukon?

Shawn Ryan:   Yukon. That’s White Gold Corp.

Ed Milewski: So you’ve got a northwest, and you’ve got the east.

Shawn Ryan:   Yep, that’s right. And so I have a – there’s lots of land in between, but we’re not working with anything in between, yet. [laughter]

Ed Milewski:  So the drills will be turning in Newfoundland, in the Labrador, sorry –

Shawn Ryan:   Probably by the 1st of September. We have until about the second or third week of October to work that ground, so we’re going to – so that’s what I’ve been trying to do, is hold the market off by going, let’s jump in there and drill, drill, drill. No, no, no, no, no: give me time to flush these targets out. Because to me, finding the target is like playing a pool game. You know you want to drop that black ball, but you have to set up your shots ahead, and if you don’t set up your shots, you’re probably going to lose.

Ed Milewski:  Somebody once said, I was talking to a pretty experienced guy. He said listen: this stuff’s been there for a couple of billion years – why do we need to rush? Like…

Shawn Ryan:   You could miss a hole by five metres, and literally miss it, and nobody will ever come back. So my job is to get our odds down to that we’re not going to miss.

Ed Milewski:  Look, we’re going to leave it there. You know, thanks for the update. Yeah, I was very involved with Ballanger back in the Yukon days, so –

Shawn Ryan:   He’s still got a good project there. I think he’s coming back this year, I think. They’re talking about it.

Ed Milewski:  Good. I haven’t talked to him in a while; I should say hello. Okay, well, we’re going to leave it there. Shawn, great for dropping by. Good luck.

Shawn Ryan:   Stay tuned. And well, there’s a little bit of luck, but I call it science. Where lucks meets science.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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