Interview Barsele Minerals: 'We will cut the Gordian Knot'

Both parties were considering a further extension of the deadline. But then we decided against a continued state of suspension. We will announce the deal's closing as soon as we have reached that conclusion. In concrete terms, nothing has changed for us. We are continuing to work on taking our promising Barsele project and moving it forward. We are convinced that we could already leverage significant potential with a drilling program of around 35,000 meters. However, to finance this, we need a decision. Fortunately, there are already interested parties who can imagine advancing Barsele together with us.

We are holding promising discussions and have serious prospects. The second part of your question must be answered depending on the interested party. If a new partner can help us buy Agnico Eagle out of the joint venture, the current order is much better than a long hang-up. But there is also another option. If Agnico Eagle provides the project with a reasonable budget, the joint venture can remain in place and ultimately benefit everyone. Agnico Eagle also understands the value of a multi-million-ounce gold project in one of the best mining regions in the world with access to very low-cost renewable energy from hydroelectric power. However, Agnico Eagle has decided to focus on Canada. It is a fundamental strategic decision that is currently causing us problems. Barsele is and remains an outstanding project.

Not at all! We have a budget, and the team is currently taking rock samples and doing important preliminary work so that we can drill next spring. We are currently planning on 7,000 meters, but we can expand the plans if conditions allow. We are also already contacting service providers to be prepared for anything. The good thing is that every service provider wants to work for Agnico Eagle. The team on site continues to be highly motivated and takes on all work within its means at this time of year. We have not laid anyone off either. We firmly believe we still need our team.

The valuation! The project is now so cheap that the stock is a clear buy even without any exploration. I myself am buying every share I can get these days. The same is true for our partners and stakeholders. The sheer value of the Barsele project already justifies a significant premium. But we know that it is easy to expand resources. Everyone in the business who knows the project sees it that way. Incidentally, Agnico Eagle does, too. If we get a budget for 30 or 35,000 meters, we can reach resources of 4 million ounces. That would also be a good starting point for a preliminary feasibility study. Rupert Resources in Finland has just released a resource estimate of 3.9 million ounces. The grades are lower than in our country. I also see the operating environment in Finland as being less favorable. I am thinking of infrastructure, taxes and also energy costs. Rupert Resources is currently worth about CAD 1 billion; we are worth less than CAD 60 million. If you consider Agnico Eagle's share, we are looking at CAD 120 million versus CAD 1,000 million. That clearly shows the potential.

It will help us with all permits. This status is given because the area offers raw material deposits. Sweden is a mining nation that specifically promotes promising projects. For us, the new status is a catalyst for various processes that await us in the near and more distant future. The stamp the authorities have put on us means something like, "This project is a priority."

If we implement what our team on site is convinced of, we will drill 35,000 meters and reach a resource of up to 4 million ounces of gold. While such a drilling program is extensive, it is also not unusual in the industry when you have a project as promising as we are finding. But the program must first be funded. Fortunately, we still have a little time before setting the course for this. We may also be able to kill two birds with one stone as part of this solution, and Barsele Minerals will hold a more significant stake in the Barsele project in a few months than it does today. The market is moving, and we have the plans in place to move forward. We may be able to create a breakout for both the project and the share price.

A critical point is the preliminary feasibility study. At this point, producers like to reach out to smaller companies. However, we still have a few hurdles to clear before getting to this step. As I explained earlier, those hurdles are not geology or infrastructure. These key data provide everything a successful project needs. But let's take the first step before the second. Let me put it this way: if we weren't quite sure where to go from here a few weeks ago, we now know the direction. I am confident that the first step will follow soon and that we will gradually pick up speed.

I continue to be optimistic about gold. In recent months, takeover activity, in particular, has increased. That is an indicator that the major players in the industry are becoming more optimistic again in the long term. Also, many companies have a great need for new, promising projects. If this investment backlog is gradually cleared, this should also impact the valuations of smaller companies in a promising position. Let me conclude by bridging to the valuation of Barsele Minerals.

A few years ago, when gold was trading at USD 1,200, renowned RBC analyst Stephen Walker valued the Barsele project at CAD 150 per ounce. Today, however, gold trades 50% higher. Therefore, it would be absurd to estimate less than the CAD 150 of that time for an ounce of the Barsele project. If we conservatively assume 2.4 million ounces, we have a valuation of CAD 450 million. Since we only hold 45% of the project so far, the amount is halved, but still, the upside becomes obvious when measured against the current valuation of CAD 60 million. The exceptionally good conditions in Sweden are not even taken into account here. Good projects in safe regions are rare! We continue to work hard so that the market can soon see our project with different eyes.