Ahead of the Herd Under the Spotlight – Quinton Hennigh, Geologist, Geologic & Technical Advisor, Crescat Capital

2025.09.19

Rick Mills, Editor/ Publisher, Ahead of the Herd:

Quinton, I’ve been doing some ruminating about the Tombstone Gold Belt.

And it popped into my head that maybe Snowline Gold (TSXV:SGD) could spin out some properties into a new-co, maybe give them a small NSR off the Valley deposit. What do you think about that kind of an idea for building some value for shareholders?

Quinton Hennigh, Geologist, Geologic & Technical Advisor, Crescat Capital:

I would say it’s almost a prophecy; yes, it’s going to happen more than likely. I’ve talked to folks at many places, many times about this whole concept. And it’s clear as a bell that the value-add, I mean, not that a deal for Valley isn’t going to be a good deal. I think it’d be a nice, rich deal. It’s a great deposit. But to get a spin-co share in a company that has a lot of the relatively untested targets out there is going to be a huge win for shareholders. Whether it includes a royalty or not, it’s hard to say.

I think there’s royalty on the property, so it’s hard to stack royalties on top of royalties. But certainly, a spin-co with a lot of the prospective ground for more of these discoveries is a huge win.

RM: I like the idea, and I think you’re probably right about the NSR. It’s just a little bit too much, eh?

QH: It would be. I hate to see stacked NSRs because what that does is in a negotiation, okay, that’s going to have a bigger impact in the ultimate value the equity holders get out of the purchase price. So, it can actually work against you. The acquirer might go, “Ah, geez, you guys are being a bit greedy here with the royalty, we’re going to lower the acquisition price.” And you look and then you think, “Well, geez, that’s kind of shitty.”

RM: We’ve talked about Trifecta [Gold] (TSXV:TG) before. You found their Hinton project interesting. But I think you were more interested in the Rye project.

QH: Yes. It looks like a true reduced intrusive-type target. You’ve got the sheeted veins, geochemistry, bismuth, tellurium, et cetera.

It looks like the winner. And I think the drilling they’ve done with the sheeted veins they’ve encountered looks like a good start. We need assays because from what I see in the news release they don’t say anything about visible gold, so we don’t have that to work with. But you don’t have to see visible gold in these as we know from Rackla, okay. So, we need to sit tight. We’ll wait and see. But the drill holes so far that I’ve seen from Rye look pretty darn promising.

RM: It piqued my interest enough so that I’m following the stock quite closely. I’m pretty sure I’m going to be a buyer sometime this winter when the stock settles down a little bit. I do like the way that that project’s developing.

It’s in the right area. It’s definitely got the right address. Mount Hinton’s an interesting property as well.

QH: Mount Hinton is interesting. And I don’t want to say it’s not. I mean, there’s a lot of gold that’s come out of that particular drainage. But the catch is they’ve targeted veins, but they haven’t actually hit a sheeted vein system like we see at Valley or Sika or something like that. So, Rye is my bet on a lottery ticket here.

RM: Well, I’m glad they drilled the Rye because if they come back, the sheeted veins, so many per meter, and they’ve got some decent gold in it, definitely Rye is going to be the project to be drilling next year for them.

QH: Correct. If you look back at Snowline, okay, back in 2021, this is late 2021, I think it was October. They had been drilling at Jupiter all summer. And then right at the end of the season, they went over to Valley, and they put in the first three or four holes into Valley. And it turned out to be what’s on the west side of the Valley discovery.

But those three or four holes came back with like 100-plus meter-intercepts of one plus gram. I think there was a couple that had maybe sub-one gram, but you could tell right away that they had a big system over there. And if we see the same thing out of the Trifecta from the holes at Rye, where you have two or three holes that have a long, 100-meter-plus of a gram, say, or something like that, that’s when you sit up and take notes.

You say, “Yeah, these guys are probably onto something.”

RM: It’s funny how much you can learn from studying Snowline’s news history and chart, isn’t it?

QH: It is. These systems are fairly predictable, fortunately.

Snowline executed their exploration work almost impeccably, from what I can see. And if people model the drilling, if they replicate that kind of story, they should do very well. And I think Trifecta is set to replicate that kind of scenario.

RM: It’s no coincidence that Sitka [Gold] (TSXV:SIG) followed the same pattern as Snowline. They drilled low-grade and then went over to Rhosgobel. It looks like they’ve hit a home run there.

QH: They did, they picked up that ground from Victoria right around the time of the Victoria heap leach failure. But fortunately, they got it.

And their tests in Rhosgobel now are looking great. I think the real pivot point for me with Sitka was they had drilled a lot of low-grade for the first couple of years. But in late 2023, it was that deeper drilling they did at the Blackjack area, where they started to get into higher grades that really caught my attention.

So, again, they executed, they followed their nose, they started to see higher grade, they drilled some deeper holes, they picked up the land, now they’ve hit bigly. That’s the way these things grow. You’ve got to follow your nose and let the geology take you in the right direction.

RM: interesting. When I was doing some ruminating on and studying the Tombstone Gold Belt, I found a play called Zonte Metals (TSX.V:ZON). The reason I bought Zonte was because they have a piece of property right in between Victoria Gold’s property and Banyan Gold’s (TSXV:BYN) property.

I’m thinking, why not take a punt, they were trading at $0.07 so, I thought why not play some closelogy? Buy 100,000 shares and just see if you kick a field goal or a home run or you fumble, right?

QH: Sure, yeah. No question.

RM: Let’s move over to WGO.

There’s been an acquisition of the Coffee project from Newmont (NYSE:NEM). Fuerte Metals (TSX.V:FMT) just bought it for $10 million cash, $40 million in shares, and 3% NSR.

So about $150 million all in, they figure. Is that the deal of the century, or what do you think?

QH: Newmont did some good technical work there. I know a lot of the people at Newmont, so I know what they’ve done and what they think of it.

But they came to the conclusion that, on its own, it wasn’t a Newmont-scale project. And that’s why they looked to divest it. The fact that Fuerte picked it up for the price they did, good on them.

I mean, if you think about it, it’s $10 million in cash and in shares, and in shares it’s relatively easy. That’s a pretty lightweight deal if an economic deposit is developed there. I’m sure that they or whoever is going to buy back that royalty. But it’s a very good deal.

Now, what do I think? Well, geographically, it’s not the toughest location, but it’s not the easiest location either.

I’ve been down there a few weeks ago in the Yukon, and it’s aways south of Dawson. It’s going to require some careful, we’ll call it careful access considerations to develop that project. It’s not one where you’ve got a road to it or power, everything else; it’s going to take some capital.

RM: There doesn’t isn’t a whole lot in the Yukon that’s easy to get to.

QH: Well, exactly. I mean the power availability in the Yukon is an everlasting question. When are they going to bring more power to the Yukon? I think it’s a chicken and egg thing. I think with the development of more mines, there’s going to be more power that’s brought, but it’s kind of circular.

But look, if it’s in the right hands, it’s a good project. I think ultimately, it’s going to have to be bolted together into a broader play, a district-scale play. You’ve got White Gold (TSXV:WGO) to the north. I really like White Gold. I like their geologic team there. I remember talking to CEO David D’Onofrio back in January, when their share price was a fraction of what it is now.

And he was talking to me on the Zoom call, and he’s like, “I don’t know what to do here, the market’s tough.” And I’m thinking, “You don’t have to do anything. You can just sit tight for about five months, and you’re going to be fine.” Because the gold price is going to take care of it. And it has.

I think people have woken back up and realized that you’ve got a very good deposit there at White Gold, a 3-grammer-type deposit that has huge upside. Look, I know Shawn Ryan well, I’ve spoken with Shawn multiple times about the deposits they have. But more importantly, the exploration they have.

Quite frankly, White Gold’s sitting on a district-scale play. But if you combine that with Coffee and maybe some of the other stuff in that area, in the south-of-Dawson area we’ll call it, you have a district-scale potential. You have a big-company project.

Newmont, I don’t know why, but they just didn’t seem to grab onto that vision. They probably had every chance in the world to pursue that. Agnico looked at it, I know that. Kinross did, too. But nobody’s made the big move.

But in this gold market, these two stories have great synergies at some point. I think what you’re going to see is there’s almost an inevitable need to consolidate that’s going to make the whole story hit a critical mass.

RM: We’ve still got Agnico Eagle Mines (TSX:AEM) in there. You’ve asked, and I’ve always wondered, and we’ve talked about this before. One of the great mysteries of the Dawson gold fields was, where did all this gold come from? What kind of a system could generate this much alluvial gold? I mean, there’s a lot more gold to be found in that area than just the Coffee and White Gold.

QH: Look, geologically, what is this district? It’s an orogenic gold camp. There’s no question, okay? The processes that developed this whole district, it’s not just White Gold, not just Coffee, thinking about the whole thing. And this goes for Klondike Gold (TSXV:KG), too. It’s the same overall event. The timing is a little bit different from one deposit to the next. It formed the same general event.

Basically, big cracks in the ground that led a lot of fluids from deep in the crust. And these fluids have produced a world-class camp here. Yes, the alluvial gold is a telltale sign. I almost see the alluvial gold as being the geochemical signature.

RM: Let’s move over to Osisko Development (TSXV:ODV), a BC play. What about that play?

QH: Well, it’s probably the biggest development story in Canada right now in the gold space. It’s fully permitted. They’re fully capitalized now. They got the money they need.

I was fortunate to help out with their source of capital for this one. But it’s a story about the geology that I always get into, okay, that’s what drives me. And to be frank, the Cariboo District is one of the most misunderstood orogenic districts in the world. About 12 years ago, I think, or 14 years ago, there was a resource published by Barkerville Gold.

It was grossly overstated. It basically had no technical backing. But there was a recognition that there was a lot more potential in the district. Well, if they hadn’t taken it down that rabbit hole, there actually is a big gold system here. But you need to do the hard yards. You need to do the technical work to understand it.

When I was at Newmont like 25 years ago, I think, I remember obtaining files from very long ago, like 1930s, 1940s, in that time period, about the Cariboo District. Newmont used to own this district. They were operators of the gold mine here. What did they mine? Well, they mined high-grade. They focused like a laser on mining some very select high-grade parts of this overall gold system. But they recognized at that time that there were a whole bunch of other lodes. Basically, one lode after another, side by side like poker chips. There were other lodes that were lower grade but were very consistent and predictable and should be mined.

Now, they tried to figure out how to do it. But at that time, the grades were a little too low for mining in the 1930s, 1940s.

Well, fast forward. When the guys at Osisko picked up this project, they have a really strong technical team. Chris Lodder is their technical guru. And I’ve known Chris for eons. It’s almost like fate, somebody like Chris landed here and understood what was going on, what needed to be done, okay. So, he took Osisko down the path of drilling out this very complicated deposit to the point where it could be advanced as a mine.

Now, they did a lot of drilling. It takes a lot of intensive drilling to make a project like this go. And they have 2 million ounces of reserves, which is great.

But they also have something like 3.5 million ounces of resources. So, basically, there’s 5 million ounces in sight. And I feel very confident that the concept they have for mining this is going to work, it’s going to come off in spades.

But here’s the thing. The deposit, they’ve only worked along about 4 kilometers of this thing. And the thing is something like 40 kilometers long. Is this really a 5-million-ounce deposit? Well, no, I don’t think so. I can see there’s potential along strike. There’s potential at depth. I can see where you could add in multiples.

You could go, “Okay, we’ve got 5 million ounces here to start with. Well, what’s at depth? Maybe there’s another double. You know, there’s 10 million. Well, then you add it along strike. Immediately adjacent to the mine there’s probably another two or three-fold size, at least. So now you’re talking about, like, 30 million ounces.

Well, look at the district, 40 kilometers long. I think there could be 50 million ounces. Absolutely. No question. It’s one of the few gold camps I know where it’s basically a deposit that’s hiding in plain sight. It’s a deposit that has all the telltale signs that it’s an absolutely massive thing. It does require very competent, capable technical work. But you’ve got it with Osisko.

So, I think they’re going to absolutely shoot the lights out here. They’re going to develop a mine that’s robust in its own merit, but it can be expanded. Given the large scale of likely resources that’s going to be found here, I think it can be expanded over time.

And there’s nothing more that the world needs than a mega Tier 1 asset. Something that can produce 500,000, maybe up to a million ounces per year. And this is the asset to do it.

RM: That whole area is ripe, it’s just never been treated right.

QH: It’s been underappreciated, and unfortunately, because of that whole experience with Barkerville Gold, I think a lot of people thought this is just a hoax. And the unfortunate thing is that tainted it. It’s not a hoax. It’s just a deposit that needed the technical love that Osisko has given it.

RM: I want to ask you, what was the purpose of the recent F3 filing?

QH: It’s for accounting purposes, it’s always hard to have shares, especially when there’s a hold on them, to get them the proper valuation in a fund. And if you can get that legend or whatever, lifted, then the shares are properly valued in the fund. It’s really important for a group like Crescat Capital to get the valuation.

I think there’s other shareholders that were also in the same boat. If you look, there was, I think, two or three funds out of the US that all needed that same form.

RM: Let’s talk about something that is very interesting here. We’ve seen some money coming into the market.

You’d know more about this working with Crescat. You go out and see these guys and you thumbs up or thumbs down. You’ve seen a lot of money start coming into the sector. Financing is getting a little easier. Money is getting a little looser.

As the Fed fights jobs instead of inflation and the US dollar weakens and geopolitical concerns intensify there are a lot of overriding things, there’s a lot of reasons to think that this is going to continue and even increase.

QH: Here’s my take: I’m a geologist and I’ve been in the mining space for 43 years now. I started working underground on a mine here in Colorado when I was 16. I’ve seen the boom around 1980, I’ve seen the boom in subsequent years, like even in the early 1990s there was a pretty good period. Certainly, the late 2000s, 2007, 8, 9, 10, 11, that period was great. If this isn’t going to continue for a while, then this will be the shortest boom I can remember.

I guess that’s the way I’d put it. But this time it does feel like there’s a bit different. I think even as just a non-macroeconomist, I’d say the driver is something more at a broader level within the economy and society.

I think that’s something I would call different this time. In the 1980s, when Reagan came in, okay, Fed Chair Volcker kicked inflation by raising interest rates. We’re in a period here where the dynamics are way different. Huge piles of debt. Yes, this is a problem.

If I had to sum up everything I’m seeing right this second, it’s almost like there’s a complete lack of faith in currencies, debts, treasuries, bonds of any type, okay. And people are rotating as fast as humanly possible into hard assets. The money that’s being thrown at acquisitions right now is jaw-dropping. I don’t think I’ve seen anything like this in my career.

And it’s happened so quickly just in the past three, four or five months. It’s gone from basically crickets — think of last fall at this time. It was crickets in the M&A space. And we’ve gone to 100 miles an hour here lately. And I don’t see any stop to it.

It’s not just us. It’s everyone, China, sovereign wealth funds. You pick your favorite pool of capital out there, and they’re chasing hard assets like you wouldn’t believe right now.

RM: Yes, the stats are pointing towards basically since 2016 peak mined gold. You’ve got an awful lot of things that if this continues, you could see the demand for gold continue to increase in front of diminished supply.

Even if it stays at this pace, there’s some very strange things happening in gold mining. The gold head grades declined up to 13.4% in the 10 years between 2012 and ‘22, and they’ve continued to decline. The global tonnage of ore and waste in 2023 was the highest on record, and it’s increased last year. It’s expected to increase this year. Probably because the average stripping ratio for primary gold mines in ‘22 was 4.2 to 1, that’s just slightly less than the record at 4.29 to 1.

And gold discovery rates continue to decline. There were 353 new gold deposits hosting 3 billion ounces of reserves, resources, and past production, and that was discovered between 1990 and 2024. The peak was in ‘95, when 28 major discoveries were made. But most of the new ounces today were from deposits discovered decades ago, since 2020 only six major discoveries have been made. Now, they’re not counting Snowline in there or anything, but that is quite a drop in discoveries.

And not only the number of discoveries, but the average discovery size from 2010 to ‘19 was 7.7 million ounces. Since 2020, it’s declined to 4.4 million ounces. Exploration budgets fell by 22% over 2023 and 2024.

Just 19% of the existing budget for exploration in 2024 went to greenfield exploration. Our mining industry, there’s no way around it, our gold mining industry is in huge trouble.

QH: I appreciate all the stats that you just rambled off, but I’m going to throw the scariest at you, okay? People. We have hardly anyone coming into the mining space. This industry has been the least loved industry of anything out there.

You know, kids don’t even see mining as a possibility in this country and many Western countries, okay? We don’t have the next generation of people to mine, to explore for, analyze, study, and mine the next generation of deposits. And it’s terrifying. I spend a lot of my time with the Colorado School of Mines trying to figure out how to foster the next generation of students.

I’m actually here at campus right now, as it turns out, and I’m about to meet with a bunch of the students that I’m currently helping get through this school. I’ve got a whole bunch of students from Bolivia here and some American students and so forth. But we need like, a hundred times this to support the mining industry.

It’s absolutely terrifying to think where we’re going to be if we don’t have fully educated professionals in this space to do all this work.

RM: Even if you had the people to find the deposits, you’ve got nobody to run the mines.

All the middle managers and up and retiring, many have already done so. It’s right across the whole extraction industry.

The oil is fighting the mining industry for recruits. It’s just a goddamn tragedy that this is happening. People just don’t want to go to school and become geologists or even managers.

QH: Correct, yes, it’s a problem.

RM: When we first talked in July, it was very early July, I asked you to pick one stock to watch. You only got one. I think you were a little surprised that I asked you, but you picked Rackla Metals (TSXV:RAK). That day Rackla was trading at 30 cents, and it’s gone to a dollar high, I think, intraday. The highest close was 88 cents, something like that.

Congratulations. That was a great pick. Rackla’s put out some news. They were drilling they’re done now. What are you thinking on Rackla here?

RM: Okay, Rackla is going to be an interesting story to watch here because there is virtually no visible gold in any of the sheeted veining that they’re seeing in their core. This is like the exact opposite of Snowline, where Snowline freely talked about the visible gold and how much they were seeing it.

Every news release that they had about drilling was about what they were seeing in their core. Well, Rackla can talk about the number of veins per meter and things like this, but they don’t have VG, visible gold. So, we don’t know yet what the gold content is going to be.

We do know that there’s a lot of other elements in the core, like bismuth and tellurium. And you can see a lot of unusual minerals in the little veinlets that they encounter that have presumably high bismuth and tellurium and stuff. I’m hoping — I can’t guarantee anyone until we see the assays — but I’m hoping that the bismuth and tellurium is essentially a proxy for the gold content. If so, I would expect to see some decent numbers.

Now, what’s a decent number? Look, I think it’s really important. I know there’s people out there that think, “Oh, these guys are going to hit 300 meters at 5 grams or something.”

Well, wait a minute. Look at Snowline. They do have occasional holes where they hit a couple hundred meters of 2, 3 grams. But in general, the grades of these reduced intrusive type systems, these sheeted veining systems, are more on the order of a gram or two in the bulk sense.

It’s not going to be infinite grade. We’ve got to keep it real. And when I hear people speculating weird stuff like that, I’m thinking, well, hold on a minute. That’s a little bit of a stretch. If these guys came back with, let’s see, I think they drilled, what, 10 or 11 holes. If they came back with, let’s say, half of those holes hit a few hundred meters — 200, 300 meters in half of the holes they drilled that hit a gram to 2 grams over those kind of lengths — happy days.

Okay, that’s an early-stage discovery. That’s kind of like Snowline. I think given the space they see, these holes are scattered over a broad area. The volume of rock is certainly there, okay. And they’re seeing lots of sheeted veining. They did a very good job of reporting the sheeted veining in all their news releases as they told people about the progress they were making when they were drilling.

So, you can look at the map and you can go, “Wow, there’s a lot of sheeted veining here.” Got to wait for assays, but the volume of rock is still there. If these guys hit bigly, let’s say they have 300 meters of a gram and a half, I would be absolutely tickled peachy.

RM: I guess you would, that would be fantastic. I’ve been looking at these things, and guys have been telling me, “Oh, it’s not economic.” No, look, you need to do some research.

A report in 2012 said the average gold grade of producing gold mines in 2012 was 1.06 grams a tonne, alright. And the average grade of undeveloped deposits in the world in 2012 was 0.66 grams a tonne.

There you go, if you’re looking at a gram a tonne, divide the price of gold by 31. You’ve got well over $100 rock, for God’s sake.

QH: Yes, in this day, right now, like a snapshot, that’s absolutely fantastic.

RM: I just don’t see the arguments. It’s still a drill play, whatever you want to say and speculate and everything. And it’s got a lot of evidence pointing to gold. But in the end, it’s a drill play. There’s nothing more, nothing less.

The facts, Rackla has to show it can generate grade, and the area has got to have some size to it.

We’ve just got to sit back and wait for the assays now, right?

QH: That’s right. I remember last fall when they first found this intrusive, and they collected a few rock chip samples. CEO Simon Ridgway brought a piece of a rock back to a show that I was at. And they had just put out news that I think this particular rock graded 92 grams or something like that.

And he shows me this rock, and I’m thinking I better get my hand lens out and look for the gold, because if it’s typical reduced intrusive, you should see little specks of gold. I started looking and looking, and I didn’t see any gold. I saw a bunch of little specks of gray stuff, which is likely bismuth.

But there was no darn gold. And I said, “Simon, how the heck does this grade 92 grams?” He kind of shrugs his hands: “I don’t know.” Well, that’s the enigma of Rackla. We’ve got to get assays to know what the heck is in it.

RM: Fascinating. We’ve got two more to talk about. So, Harvest Gold (TSXV:HVG). You said if you look at the greenstone belt and look at the position of the Windfall deposit, which was recently sold to Gold Fields for billions of dollars, along with all the explorations, you can see that the mirror half of that belt is expressed in the Mosseau and Urban Barry and LaBelle.

They’ve put out some news about their programs. I know you follow this one pretty closely, and you work with the team. You’re happy with the progress, what do you think about this one?

QH: I am happy, but it’s still early stages. To touch on the first point you made, the mirror image, when I say that, you’ve got a granite here, a big ball of granite that’s come up along this greenstone belt, and this property is tucked into what we call a pressure shadow. It’s basically a place where the granite crowds the greenstone, and it squeezes all the rocks.

Geologically, that’s often a place where it’s a sweet spot. It’s the focus for a lot of mineralization to take place. And we see that over at Windfall. So, the Windfall, which is to the east, is the analog for this. So, we’re basically looking at almost the mirror images. On that basis, I think this is highly prospective ground.

Look, the guys did a good job doing as much sampling as they could, including soil/till sampling. And they’ve got some decent geophysics to help guide their targeting. I know that their program is in the middle of it here, so, we’ve got to wait and see where they land, but I think in this early pass they’ve done a very good job.

RM: CEO Rick Mark has assembled a great team, and the partnership with Vior was a great move as well.

QH: Yes.

RM: Very experienced guys. Yeah, it’s early days on this one too, but I think that the $500,000 that the European investor put in, I think that’s a big vote of confidence. And I’ve got my fingers crossed on this one. I’d like to see of course some kind of a hit on the Mosseau drilling. And I’ve got a feeling that LaBelle and Urban Barry are going to, it’s just a continuation of the structure all the way through. What was it? 50 kilometers of this structure and cross-cutting?

QH: That’s correct, yes. It is. Easily.

RM: Okay, let’s move over to Orestone Mining (TSXV:ORS). I know you know a lot about the Francisca [project]. I see CEO David Hottman came out with some news this morning. They added some more ground to the project.

QH: Yes, they sure did. I always like to see that because any geologist or mining entrepreneur that is worth their salt is going to make sure they have all the ground they need before they go and drill it, increase the value of whatever discovery that makes up. I always consider the acquisition of more ground a positive.

I know the market came off a little bit today, but this is a pretty thinly traded stock, so one day of volatility is not reflective of the announcement. But it’s a good step. It’s a very robust target, so I think they’re going to be in a much better position to test it. Bear in mind, it’s winter down there right now, right, so it’s a good time to get this kind of work done and then they can come back and have a more holistic geologic drill program when the summer rolls around.

RM: Yes, I’m excited about this one. It’s not often you get an oxide quite this size, and there is one not that far away, pretty much next door, that has been mined for quite a while, and it seems to be a little richer than your normal oxide or heap leach.

QH: Exactly. I always love to look at camps where there’s operating mines especially that are nearby, because you can gauge what the company is likely going to find, and that’s kind of the basis. Geologically, it is a bit of a head scratch exactly what this thing is. Is it a skarn? Is it a porphyry-related thing? Don’t quite know, but do we have an analog right nearby? Heck, yeah. So that’s good enough for me, and it’s oxidized, too. It’s oxide material. So, I talked to their team, and the metallurgy sounds like it could be very good.

RM: Right. One more. Silver47 (TSXV:AGA). They’re building a silver powerhouse here. It just so reminds me of Viszla [Silver] (TSX:VSLA). They’ve got a resource at Hughes. They’ve got Red Mountain, which is looking like a beast, and you’ve got those veins now at Kennedy.

What is it, 22 kilometers? You’ve got 70-some kilometers of veins at the Mogollon.

QH: I know that was the whole initiative by the company and the strategy to combine the two companies, Summa Silver and Silver47. Look, they’ve done a good job assembling a very robust portfolio as far as exploration projects go.

This has got to be one of the biggest stables of silver assets that I know of in any given explorer. People ask me all the time. They say, “What’s a good silver exploration company to get into?” And to be frank, I’m hard-pressed to recommend too many out there except for Silver47. I know the Red Mountain Project. It’s already got a good resource. It’s got huge exploration upside.

I know Mogollon in New Mexico. I worked down there for a few months way back in the early 2000s, and I felt that Mogollon was probably the biggest underexplored or unexplored epithermal systems in the US at that time.

It’s delightful to see a company assemble it and be able to explore it. I think their prospects are absolutely fantastic. And they have other projects, too. Don’t get me wrong. I’m not trying to say those are the only two. You’ve got Tonopah and other projects. Even Michelle. Who knows? Maybe that will come back to life. So, it’s good.

RM: Fantastic stuff. If you had one message for retail investors right now, what would it be, Quinton?

QH: Let’s see. Message for retail investors. Okay, here’s what I’m going to say, because I’m sure there’s a lot of people out there who are looking at the rapid appreciation in a lot of stocks here. I’m not the kind of guy that’s going to say, ‘Oh, it’s all systems go. Everything’s blue sky from here. Jump in and you’ll be fine.” I’m going to say my experience in the mining industry is these kind of markets climb the wall of worry. And if you look up wall of worry on Google, you’ll see what I’m getting at.

It is never a straight line. You don’t want to see things just go asymptotic and rise super-rapidly. You’ve got to be smart.

With a rise like this comes volatility. We might see some pullbacks here, even in the short term. Maybe there’s a 10% or even up to a 20% correction due in the next few months.

Well, that’s part of it. Does it mean we’re not in the bull? No, I think over the long term we are. I think the commodity cycle in this particular case is being driven by what we talked about earlier, where you have a lot of money and a lot of different parties, countries, sovereign wealth in various forms. You’ve got private equity money coming out of North America here. You’ve got mining companies all chasing these assets. It’s not going to subside tomorrow.

This trend has only just begun. And these assets, like we said, they’re not growing on trees. There’s a finite number of them. And now you have a lot of money chasing them. I think over the long haul we’re going to see a bull that lasts a while, maybe a few more years, three, five, seven years, something like that.

RM: Very well said. People are going to take profits, good they have some, been a long while for many. I can’t help but agree 100% that we’re not at the pre-start period we were in 4 or 5 months ago. We’re maybe halfway to first base.

I asked you once before which stock. And I want to ask you again. Now, if you don’t want to answer that’s fine. But what stock do we really want to look at? Not for short term, but for the longer term.

One that’s just getting going, that’s cheap. And one that is, if you want to buy it, hold it and let management go to work because the project needs to have money spent on it and worked.

Have you got one like that?

QH: Well, I do. I have several that I can throw at you. But if I had to choose one, hmm.

RM: Give us several.

QH: Okay, I’m going to give you a couple, maybe a few on the left-hand side of the Lassonde curve. In other words, explorers that I think are compelling. And then, on the right-hand side, I’m going to say Osisko Development.

If you look at a Osisko Development right now, I don’t know what the market cap is precisely, but it’s on the order of $300 million Canadian or something like that. Well, they’re talking about building a mine that can produce around 200,000 ounces a year as a start. Look, at present valuations, companies, let’s say for every 100,000 ounces production, okay, in the mining world right now, that’s about $700 million to $1 billion in valuation, Canadian. So, a 2-million-ounce producer should be valued at say $1.5 to $2 billion. Well, ODV is trading at $300 [million] and change, I think, right now. And if you want to sit back, they’re building a mine in two years. Happy days. That’s my view.

Now, as far as the left-hand side, let’s do a couple. I’m going to give you what I would say is an earlier-stage level of exploration, which is Mogotes [Metals] (TSXV:MOG). Okay, Mogotes has done a lot of good technical work, and they’re now in a position to drill. But I still think their valuation is kind of pre-drill-stage numbers.

Now, they’re in Argentina and Chile, which is early spring right now, down in that part of the world. So, it’s going to be about a month or two before they can actually get the drill out and start drilling. But I think Mogotes is queued up to be an exciting drill story.

Is it one you sit back, and you wait five years for? Well, no. But if you think about them drilling here shortly and they hit, could it go from $0.30 to $3? Yeah, I think it could if they hit something. No promises, but that’s the kind of jump we could see out of a story like that.

The other one that I — this is a tough one because I’m going to give you something that’s a little more advanced than the left-hand side. We talked about White Gold. I really think that has a lot of runway.

But the one that I can’t stop thinking about is Sitka. You know, I saw CEO Cor Coe up at Beaver Creek last week, talked about Rhosgobel and the Pukelman and other targets he’s drilling. VP Corporate Development Mike Burke was there, too. Anyway, at every level, I get the sense that this is going to be an exploration story that unfolds over the next, say, three or four years. And at the end of it, you’re going to see — in a collective sense — you’re going to see them have probably four or five or six deposits sprinkled across the project, the Clear Creek Intrusive Complex, that collectively has north of 10 million ounces. Nothing’s a sure bet, but in my book, this is pretty darn close to it.

RM: Excellent. I appreciate it, and I know a lot of the readers appreciate it, too. It gives them something to look at, do their due diligence on.

I’m not going to add any more to it. We’ve talked a lot here, and we’ve kept you long enough.

I appreciate your time. I really do. Thank you.

QH: Alright, thank you. Take care.

Richard (Rick) Mills
aheadoftheherd.com

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Richard owns shares of HVG, ZON, BYN, WGO, ORS, AGA

HVG, RAK, WGO, ORS, AGA are paid advertisers on his site aheadoftheherd.com

This article is issued on behalf of HVG, RAK, WGO, ORS, AGA

Quinton Hennigh owns HVG, WGO, ORS, AGA, SGD, SIG, BYN, ODV, RAK & MOG