Interview with NewPeak Metals Ltd.
Interview New Peak Metals: Many chances for great success
time to read: 13 minutes | The interview was conducted by Nico Popp on May 19th, 2021 in Brisbane (AU).
Managing Director, CEO | NewPeak Metals Ltd.
Level 27, 111 Eagle Street, QLD 4000 Brisbane (AU)
+61 7 3303 0650
Table of contents:
Diversification as a principle
news|financial: "You are a young mining company with a very diversified portfolio. Instead of a flagship project, you have two projects in Argentina, plus others in New Zealand, Finland and Sweden. You also hold a 30% stake in the energy Company Lakes Blue Energy. Why have you positioned yourself so broadly?"
Sensible diversification and flexibility are important characteristics for our Company. And it is principally geographical diversity. Two years ago, we only had our outstanding projects in Argentina in our portfolio. Cachi, in particular, has everything it takes to become a major project. Nevertheless, at the time, economic-political disagreements in Argentina put us in a disadvantageous situation despite having exceptional projects. It was then that we decided to broaden our scope. The energy investment is a legacy but is important for NewPeak as explained below.
Advantages of the New Peak Metals approach
news|financial: "What are the advantages and how do you counter critics who see risks in an extensive portfolio?"
"[...] We can make a big increase in value with little capital. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
Because we are positioned in Argentina, Northern Europe, and New Zealand, we can work on our targets throughout the year. As soon as the drilling phase in Argentina is finished, we can push ahead with work elsewhere. This provides a continuous news flow and means that we are highly flexible as a company. Those who invest in us have several irons in the fire. Since our projects are at an early stage, they can be developed significantly further with little capital. However, to achieve this, expertise and experience in mining are essential. Our team brings all of this to the table. We can make a big increase in value with little capital.
news|financial: "What has become of the uncertainty surrounding Argentina?"
Fortunately, this has dissipated. The new government there is committed to mining and there are many large mining companies on the ground. Argentina has a lot to offer both in terms of lithium and gold mining. We have two gold projects in Argentina, The Cachi Project in Santa Cruz and The Las Opeñas Project in San Juan – both have excellent prospects and huge opportunity. The new government has recognized that the country itself also benefits when it provides good conditions to companies in the sector.
Plans for 2021
news|financial: "Unlike other exploration companies, you are pushing ahead with drilling on all projects in 2021. Briefly outline the plans for the 2021 drilling program. Where are you drilling, when, and with what objective?"
"[...] We also have a whole series of promising projects in our portfolio, and any one of them can provide exceptional growth and value in the company. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
We have already completed our drilling in Argentina, and we plan to drill in Finland in the summer. The goal at Cachi Project in Argentina is to make one significant discovery, which is very possible. Our projects in Finland are at a different stage. There, historical results are already available and these only need to be confirmed and expanded. There are three producing gold mines which are not far from our projects in Finland. This ensures that large parts of the infrastructure for another project are already in place and we have a good chance of making significant progress - also because we can work all year round in the south of Finland. Incidentally, Finland is highly regarded as a mining location and is repeatedly ranked among the best mining regions in the world in relevant publications. It has become the top producer of gold in Europe.
Our Finnish tenements lie within highly prospective orogenic gold belts of Finland with our two main targets, Hopeavuori and Satulinmäki show significant potential, with mineralisation open along strike and at depth. In both areas we will be looking to extend the mineralisation in previous drilling. Some results that we will be following up on in these areas are:
o R305: 11.5m at 19.4 g/t Gold from 30.6m depth;
o R313: 10.7m at 14.4 g/t Gold from 4.0m depth;
o R330: 3.0m at 106.7 g/t Gold from 22.0m depth
o 147.0m at 0.8 g/t gold from 73m in SMDD007, which includes 23.5m at 3.3g/t from 143m
o 2m at 10.5g/t Gold from 7m in SMDD005
We have already started drilling on our property in New Zealand at the end of 2020. We are advancing our Cap Burn Gold project with our partner Mineral Rangahau Joint Venture and hold 75% in the project. In 2021, we will drill further to define the property further. The target in NZ is similar to that currently being mined at OceanaGold’s Macraes Mine, which lies along strike on the same structure as many of our tenements. The Macraes Mine is a multi-million ounce deposit and sits in a relatively under explored part of the Otago region.
Our other project in Argentina will be drilled in September/October 2021. This is another project with huge potential to define a multi-million ounce Gold resource. There is huge untested potential within the high-grade epithermal vein systems and a breccia/porphyry system. Some results from this project are:
o 115m @ 0.58g/t Gold, 3.5g/t Silver, 0.24% Lead and 0.65% Zinc from 18m to end of drill hole 12-LODH-003 including 47.1m @ 0.84g/t Gold, 3.5g/t Silver, 0.21% Lead and 0.63% Zinc from 80.4m
o 29.4m @ 0.57g/t Gold, 9.9g/t Silver, 0.29% Lead and 1.1% Zinc from 65m in drill hole 12-LODH-011
o 1.5m @ 4.75 g/t Gold, 14.8 g/t Silver, 0.3% Lead and 0.48% Zinc in drill hole 12-LODH-007
o 2m @ 7.45g/t Gold, 256g/t Silver, 1.03% Lead and 0.61% Zinc in drill hole 14-LODH-019
What distinguishes all of our projects is that we can generate significant returns with relatively little expenditure. We spend around AUD 1 million per project, drilling between 2,000 and 3,000 meters. If such drilling programs are well thought out and targeted, a lot can be deduced about a project's potential. And this is precisely the opportunity for investors: We can achieve a lot with few resources. We also have a whole series of promising projects in our portfolio, and any one of them can provide exceptional growth and value in the company.
Special features of the Bergslagen project
news|financial: "You are planning a scoping study for your strategic metals project, which has proven tungsten reserves in Sweden in 2021. What do you expect from this project? Among geologists, tungsten is always considered particularly challenging. How do you see that?"
First of all, I have to clarify that Bergslagen is a deposit of various strategic metals. We are talking about tin, molybdenum, copper, tungsten, silver and others – we even discovered potentially promising gold. These metals are considered critical within the EU, which is why Sweden receives a lot of attention as a mining location. Concerning tungsten, we have the advantage at Bergslagen that the metal occurs as scheelite and not as wolframite, making subsequent refining a little easier. Typically, tungsten is largely not smelted to form metal due to its high melting point and is instead extracted from crushed ore using a series of chemical reactions. In general, scheelite is much more floatable than wolframite making it easier to extract.
Currently, we are compiling historical data around the project and then deriving our exploration approach from that. This work is uncovering incredibly valuable data not only of historical surface exploration and drilling data but also mining data. For example, we recently discovered a mine production report from the famous Yxsjöberg Tungsten Mine indicating over 1Mt of remaining ore at 0.41%WO3 which is twice what we originally thought. We will keep our investors updated and informed about mining situations in the coming weeks.
news|financial: "You had AUD 2.3 million in cash in March. How far can you carry these funds? Given the number of projects, are creative solutions to funding possible?"
"[...] In addition to a classic capital increase, we can also imagine selling projects, operating them as joint ventures or using our position in the oil Company Lakes Blue Energy to inject new funds into NewPeak Metals at short notice. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
We will raise capital in the summer. In this context, I would like to emphasize that we are very flexible in terms of the specific form of financing. In addition to a classic capital increase, we can also imagine selling projects, operating them as joint ventures or using our position in the oil Company Lakes Blue Energy to inject new funds into NewPeak Metals at short notice. It is also conceivable that our subsidiaries, for example in Scandinavia, could raise new capital for themselves and use the framework conditions of the respective countries for this purpose. Again, this demonstrates one of the advantages of our diversified approach: We have numerous options and will use the best of these to move our Company forward.
Shares instead of salary
news|financial: "When it comes to being frugal, you have already set a good example as CEO by getting paid in stock, is that correct?"
That is precisely correct, and the best part is that rest of the management team have also followed this example. We believe in the success of NewPeak Metals and our priority is to make significant progress in the Company whilst being prudent with our treasury. This form of payment was, therefore, an obvious choice.
Participation in an energy company
news|financial: "What is the deal with your equity position in Lakes Blue Energy?"
"[...] At the beginning of July, the moratorium imposed by the government on onshore gas exploration in Victoria, Australia will end. Since the supply in Australia is very tight, we expect a lot from our investment in Lakes Blue Energy. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
Some time ago we had some properties around oil and gas in our portfolio, but we wanted to focus on the precious and industrial metals business. So we gave the properties to Lakes Blue Energy, who are also an ASX listed company, and got 30% of the shares in return. For us, this was a perfect deal. We focused on our real goals and knew that our property was in good hands with Lakes Blue Energy. At the beginning of July, the moratorium imposed by the government on onshore gas exploration in Victoria, Australia will end. Since the supply in Australia is very tight, we expect a lot from our investment in Lakes Blue Energy. We believe that the Company has enormous growth potential due to its outstanding assets in Victoria and could be valued at several hundred million AUD in the long term.
Lakes had a market capitalization of approx. A$45 million prior to being suspended, hence NewPeak’s value some $15 million. Since that time, the moratorium in Victoria is shortly to be lifted which will open up Lakes’ huge onshore gas resources for exploration and development, they took over Rawson Oil and Gas which provided gas exploration assets in South Australia and Papua New Guinea, and successfully drilled the Nangwarry carbon dioxide well in South Australia which they intend bringing into production shortly. The ASX has asked for a number of financial and corporate administration matters to be rectified for which Lakes has completed and the Company now awaits unsuspension.
About the connection with SolGold
news|financial: "Your management team has many years of experience. As Non-Executive Chairman, you also have Nicholas Mather from SolGold on board. What are the advantages of being associated with such an up-and-coming Company?"
"[...] While our Cachi project is not expected to be quite as large as some of SolGold's discoveries in Ecuador, there is still very strong potential to surprise the market, just as SolGold did back in the day. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
Nicholas Mather and I have known each other since university. I hold him in high esteem because he has geology and economics in mind, at the same time, and is a true go-getter. We have both become entrepreneurs and have worked together on several projects in the past. With SolGold, Nick expanded and consolidated an existing discovery and turned the Company into a billion-dollar enterprise. We intend to take a similar approach and create value for our shareholders based on historical drilling results. While our Cachi project is not expected to be quite as large as some of SolGold's discoveries in Ecuador, there is still very strong potential to surprise the market, just as SolGold did back in the day. When the Company was in its infancy, Nick had to go to great lengths to get financing in place and brought in partners to do so. However, with the first high-grade results including copper and gold, further financing was almost a no-brainer for the Company. We can get to that point as well. We are convinced that the Cachi gold project in Argentina is a sleeping giant.
Cachi as a sleeping giant?
news|financial: "How do you come to this conviction?"
"[...] the indications to date are that the potential for a company making deposit is there. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
We have already drilled several targets on the Cachi property and all of them have delivered excellent results. If you talk to geologists who know southern Argentina, they agree that in this region, very good results near-surface are often followed by outstanding results at depths to 200 meters and more. However, to drill such deep wells, larger amounts are required. We are therefore continuing our previous work to increase the chances of drilling deeper. We are fairly certain that positive surprises await us at depth. However, we are proceeding cautiously and with a sense of proportion to narrow down possible drilling targets in more detail. The giant sleeps and we decide when to wake him up!
We’ve had significant encouragement from work completed to date with over 80% of the recent drilling intersecting anomalous Gold, often with elevated Silver and in some areas with Base Metals. The expansive alteration footprint seen at Cachi is evidence of large amounts of hydrothermal fluids moving through the rocks in this caldera system, which are rich in precious and base metals. People familiar with these types of system understand that discovery is a process of persistent systematic exploration but the indications to date are that the potential for a company making deposit is there. With over 15 targets currently identified there is a lot more exciting work to be done at this project.
news|financial: "Australian companies are often characterized by a high number of shares. New Peak Metals also has 5.67 billion shares outstanding, resulting in correspondingly low share prices. What are the advantages of being a penny stock and do you plan to consolidate your share count at some point?"
We are keeping an eye on the number of outstanding shares and agree that it makes sense to reduce the number of shares. However, we want to wait for a suitable time to do this and will consolidate after a sustained increase in the share price. However, we are currently focusing on the development of our projects, possible partnerships and financing. We will seize the opportunity to consolidate the number of shares as soon as it presents itself.
New Peak Metals as an inflation play?
news|financial: "Why should investors invest right now in a company that is advancing projects around gold, strategic metals and energy? Are you betting on rising inflation rates?"
"[...] Since all projects can take a dynamic development, we are very optimistic about the future, regardless of the specific conditions. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
The thought is close, it is true, and I cannot rule out the possibility that some investors are using fear of rising inflation as a reason to invest in NewPeak. But I see the success of NewPeak Metals as independent of that. We operate in many parts of the world. There is no such thing as one inflation. While Japan suffered from deflation for many years, there was hyperinflation in Argentina. Instead, I believe that gold will benefit from being a surrogate currency for millennials - regardless of inflation. Our base metals and participation in energy projects are also very promising because these commodities are in demand. NewPeak Metals is an emerging Company that offers investors participation in promising commodity projects from various sectors. Since all projects can take a dynamic development, we are very optimistic about the future, regardless of the specific conditions.
news|financial: "Thank you very much for talking to us."