Interview with Newlox Gold Ventures Corp.
Newlox CEO Ryan Jackson on building a green gold producer with a rapid growth trajectory
time to read: 9 minutes | The interview was conducted by Mario Hose on October 13th, 2020 in West Vancouver (CAN).
CEO | Newlox Gold Ventures Corp.
60 Laurie Crescent, V7S 1B7 West Vancouver (CAN)
+1 778 738 0546
Table of contents:
HISTORY AND LISTINGS
news|financial: "Hello Mr. Jackson, Newlox Gold is listed on multiple stock exchanges. Can you tell us something about the history of the Company?"
"[...] We quickly learned that the tailings are high-grade, often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
Newlox Gold was born out of serendipity, an experience that we had over a decade ago while conducting mineral exploration programs in Central America. At that time, we worked with a team of geologists and mining engineers who were doing a traditional mining exploration and development project. As we conducted our exploration program, we found historical tailings mounds to be ubiquitous in these areas. Our geologists decided to send some samples to the lab out of a sense of curiosity, along with the standard exploration samples that we were collecting. We were shocked when the results came back from the lab showing the tailings were grading higher than the mine plan we were developing at the time. That was the aha moment for us.
The opportunity presented by these high-grade tailings remained in our minds, and a few years later, our team decided to take a serious second look at it. We quickly learned that the tailings are high-grade, often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production.
Artisanal processing is only about 40% effective at gold recovery, and this low recovery rate forces them to mine only the highest grade material to ensure they are profitable. As a result, they high-grade mine the orebodies, recover some of the gold and leave most of the value in the tailings. At the same time, they create environmental contamination. We learned that these practices are widespread around the world, which we believe represents a significant opportunity.
Newlox Gold has always been listed in Canada on the Canadian Securities Exchange and is now listed on the Frankfurt Börse and Stuttgart Börse as well. The Company has a strong shareholder base in Canada that has been steadily growing since we started marketing the Company this year.
news|financial: "What is the focus of Newlox Gold?"
"[...] It is a USD 27 billion industry that has been completely neglected by traditional mining companies. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
Newlox Gold, in partnership with its technical advisors at the Norman B. Keevil Institute of Mining Engineering at the University of British Columbia, designed a custom-made system to recover the precious metals from these artisanal tailings while conducting environmental remediation at the same time. Artisanal gold represents 20% of global gold production. It is a USD 27 billion industry that has been completely neglected by traditional mining companies. Our goal is to bring this industry into the 21st century to boost productivity and improve social and environmental impacts.
We have developed our systems to process and remediate tailings and effectively recover precious metals from material mined by artisanal miners. Newlox Gold has successfully deployed these processing technologies at its first processing plant in Costa Rica. It is currently in the development stage at its second, of numerous planned environmentally positive gold production projects.
Newlox Gold is also continuing its research and development work and has recently formalized this endeavour through its subsidiary company, Newlox Research & Development Corporation. The R&D company is currently running a 12-month program advancing non-toxic precious metals leaching technology that will apply not only to the USD 27 billion informal mining industry but also the USD 180 billion formal gold industry.
DETAILS ON THE PROJECTS
news|financial: "Can you give us details on the characteristics of your projects?"
"[...] We will split the profits with the local miners and expect Newlox Gold’s share, at base case, to be approximately USD 12 million per year from a planned 150 tonne per day operation. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
We have already designed, built, and commissioned our first artisanal tailings focused processing plant, which produces gold while cleaning up historical pollution, and we have a second project currently in development. These projects can be built for approximately USD 2 to 3 million and can be commissioned in around 6 months. With annual revenue at the base case expected to be more than USD 10 million, the projects payback in less than a year before becoming cash cows that can support organic growth. We plan to grow rapidly over the next few years and have multiple projects currently in due diligence.
The first project operated in test-production over the summer of 2019 and achieved commercial gold production. We generated a great deal of data during test-production, with optimization work and improvements to the plant completed over the winter of 2019/2020. Processing operations were interrupted over the summer of 2020 due to COVID-19, but we are now re-commissioning the first processing plant and plan to ramp-up to full-scale operation in the first quarter of 2021.
Our second project is the Boston Project, located within the historic Juntas Gold Camp in Costa Rica, which has been continuously mined since the early 1900s and has produced over 1 million ounces of gold. The Boston Project is a joint venture with the local miners whereby they will be mining the material, and Newlox Gold will be processing it. We will split the profits with the local miners and expect Newlox Gold’s share, at base case, to be approximately USD 12 million per year from a planned 150 tonne per day operation. The project is fully-permitted, and currently in development with commissioning expected in the first quarter of 2021.”
Newlox Gold’s management team plan to follow-up on the Boston Project's commissioning in early 2021 with the third project's announcement. We are currently evaluating quite a few expansion opportunities with 4 prospects in the advanced due-diligence phase. We are pleased with the wealth of opportunity that is available to us in this sector and believe we have a significant first-mover’s advantage in this neglected USD 27 billion industry.
STAGE OF THE COMPANY
news|financial: "You emphasize on your website that you are a developer and an environmentally responsible gold producer. Can you comment on this differentiation from your peers in the Canadian junior mining sector?"
The Canadian junior gold industry is populated mostly by exploration companies. Those explorers are an essential part of the overall global mining industry, providing the discoveries that eventually can become mines. A big exploration success can be inspiring, but the reality is that the overwhelming majority of projects are not successful despite the companies' best efforts. There are fewer and fewer significant discoveries every decade, and fewer still make it through the development stage and become mines.
We have chosen to focus on the tangible; we have focused on projects that can be rapidly brought into production with modest CAPEX invested and can payback rapidly to provide cash-flow to support organic growth. Although significant discoveries are becoming rare, high-grade small-scale orebodies are discovered all the time and are mined by local miners worldwide.
Estimates of informal gold mining show that the sector is growing quickly and now makes up 20 percent of global gold production. This rapidly growing sector is underserved, and there is an opportunity to significantly increase productivity while improving working conditions for miners and improving the environmental and social effects of mining. We have identified a neglected market that is full of opportunity and growing rapidly.
We believe that our attention to environmental and social positivity is a significant differentiation as well. All companies in the extractive industries are committed to social and environmental responsibility; however, our model is designed to provide substantial environmental, social, and economic benefits to all stakeholders; it’s baked into our business model. This positive approach has resulted in a strong social license to operate for the Company; in fact, we are being invited to do business in multiple jurisdictions because regulators and local stakeholders see our approach's public value.
By focusing these rapid timeline opportunities and providing benefits to all stakeholders, we believe we can shed the baggage of traditional junior mining exploration and development companies to build something tangible and real that offers an excellent value proposition to our investors.
RELEVANCE OF PRECIOUS METALS
news|financial: "In light of the economic uncertainty and fiscal policies seen in 2020, interest in precious metals is strong. Can you comment on these trends?"
Fiscal Policies in the Western World have been pumping money into the system for many years, and the response to COVID-19 has accelerated that trend. There is no surprise then that the abundance of new money and the economic uncertainty of 2020 has resulted in a strong interest in gold and silver. We have been bullish on gold for a long time. We believe every investor should allocate part of their investments to precious metals to hedge against inflation and instability. This year has certainly influenced a lot of investors to follow a similar mindset. We think that is a lesson that has been learned and will have a prolonged effect on the market.
THE PRICE OF GOLD
news|financial: "What impact would a gold price above USD 2,000 an ounce have on Newlox Gold?"
"[...] The gold price now is pushing towards USD 2,000, which has a powerful effect on Newlox Gold’s projections. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
Newlox Gold’s original business was developed using a USD 1,000 per ounce gold price. We have revised our model multiple times; to USD 1,400 and then USD 1,800. The gold price now is pushing towards USD 2,000, which has a powerful effect on Newlox Gold’s projections. Because of our focus on high-margin operations, we have low production costs, and we can make a profit even with a low gold price. However, we are highly leveraged to the gold price and are very excited to be seeing a phenomenal increase in the value of our projects.
news|financial: "What is the value of Newlox Gold to investors?"
"[...] We have something real, it’s built, and we have produced gold, and we will be growing that production aggressively. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
Over the past few years, the market for junior resource companies has been very slow. Newlox Gold was supported by a core group of investors who saw the opportunity and believed in the business model. With their help, we kept our heads down and built the first project; we put the money and effort into creating something real. Now, the market is hot for resource companies.
We offer the opportunity to invest in a company with established gold production and a strong pipeline of growth opportunities in development and due diligence. Now that we have built our first plant and we have proven that we can produce gold, the time is right to market our Company to investors. We did our first marketing of Newlox Gold in the spring of 2020, and we immediately received strong positive feedback from the markets.
Newlox Gold is by no means a household name; we are still a company known to a select few. However, we are looking to change that, as we bring Newlox Gold to new investors every day. We are delighted to be coming to the market with a no-nonsense environmentally and socially positive gold company. We have something real, it’s built, and we have produced gold, and we will be growing that production aggressively.
news|financial: "Thank you very much for talking to us."