Interview with Paul Huet, CEO of gold producer, RNC Minerals (TSX:RNX)

RNC Minerals is a great turnaround story in the gold space. CEO Huet returns to talk us through the latest updates for the stable gold producer with exploration potential.

After becoming a much less nickel-focused company, now RNC Minerals could have a name change to match. RNC Minerals could become Karora Resources (TSX: KRR). This is dependent on shareholder approval, but he claims that shareholders have been keen on a name change for a long time.

RNC Minerals has been suffering from some legacy issues when it comes to marketing, and this appears to have put off some of the larger funds. Huet had already wiped then strategic plate clear, but now the name change could be the final step to clearly communicate the new value proposition that RNC Minerals has to offer. RNC Minerals may be completely separated from its confused, nickel-focused heritage. This is precise, focused marketing, and Huet sees it as a long-time coming.

Away from the new name, RNC Minerals has been busy working on a new acquisition: Spargos. RNC's heightened cash flow and the Morgan Stanley renegotiation have allowed RNC Minerals to look at potential M&A much more actively. Huet sets an aggressive timescale of Q4/20, but a realistic timescale of Q1/21. The company has just signed a "definitive agreement" on Spargos, and it is just c. 45km from RNC's plant. This gives the company 90 days of exclusivity. He claims that while the company still has to conduct its final due diligence, but the veins in the resource are a higher average grade than their underground Beta Hunt mine (excluding coarse gold). There are over 130,000oz in the resource that are over 4g/t. It's looking like an average 3g/t grade in an open pit. RNC Minerals is now much less reliant on Beta Hunt, and this matters for shareholders. Huet thinks Spargos could have a transformative impact on RNC Minerals' economics. The proximity to the mill is another game-changer. Has this opened a lot of doors for RNC Minerals? Will the optionality increase the share price? Will Higginsville operations get ramped up now?

Company page: http://www.rncminerals.com

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Interview with Michael Hodgson, CEO of Serabi Gold (LSE:SRB, TSX:SBI)

Serabi Gold has been one of our favourite gold stories. Share price has treble since we started following them. The team has managed to create a strong, stable operation at the Palito and Sao Chico gold mines in Brazil, but with the debt financing agreement (convertible loan notes) for second acquisition, Coringa, looking to be settled, Serabi Gold can push the cross-mine AISC down towards the US$1,000/oz figure, and double production to c. 80,000oz+ per annum of gold. The Q1/20 production figures were released recently. There's an article on www.cruxinvestor.com, but why not hear from Hodgson himself?

What are the highlights?

- Cash position – US$14.23M at year-end

- Net cash – USD$5M

- AISC slightly up on 2018 – US$1,081/oz

- EBITDA – US$17.2M

- Average gold price received – US$1,376

- Total mined ore up 8% (at an average grade of 7%)

COVID-19 has negatively impacted most gold producers, but Serabi Gold has managed to successfully mitigate any potential ramifications. It has achieved this through sensible workplace safety practices, and the health & safety stats are also pleasing. Rotating the workforce has been very effective. Any junior gold miner would be chuffed with those numbers. Serabi Gold has now started allocating some money towards exploration for the first time in a while. With its strong cash flow, and with most of its debt finally being repaid, Serabi Gold has now freed up its capital for growth. This could get the market even more excited. The focus is currently on step-out drilling at the west of Sao Chico. Hodgson thinks the company is working its way towards a geophysical anomaly that the company has already been drilling at. There is a possibility the two could connect, resulting in some serious upside for Serabi Gold.

What about the much-discussed ore sorter, which could have a further transformative impact on Serabi Gold's economics? Serabi Gold recently conducted a preliminary test on it. What is the feedback? Hodgson claims the thing is "absolutely singing," which will be music to gold investors' ears. He doesn't have the stats for April just yet, but in March it was upgraded to pass 2,500t at a grade of c. 3g/t, and it screened out a little over 300t at a grade of 21g/t, the rest was 2,200t at a grade of 0.7g/t. Through April, the grades at Palito (50% of feed ore) went up from the usual grade of 6.5g/t to 9g/t. Overall, combined with the non-ore-sorted Sao Chico ore, it is giving the average grade a 1g/t uplift. This might not sound like a lot, but it's a big change. He expects another healthy increase in the Palito feed grade through April, which will free up space at the production plant to use for better quality material. Smart.

Will the exploration plans distract Serabi Gold from Coringa? It's certainly a nice problem to have, with organic growth in the company's "backyard." Hodgson states Coringa is still just as important. Adding ounces at a low cost gives Serabi the cash flow it needs to grow, and he is not going to forget that anytime soon. Coringa is a very advanced project that Hodgson will continue to focus on. Another focus will be on the areas surrounding Serabi Gold's producing assets because the company will eventually need to expand its processing plant somewhere. The company has been successful at chasing high-grade veins, but now Hodgson is talking the language of bulk production. However, one of the biggest problems in Brazil is power. He claims the mining infrastructure is improving in the region every day. The company is constantly assessing its cost profile, and its eventual wish is to add in some open-pit production.

Hodgson acknowledges that Brazil is struggling, especially with its lack of medical infrastructure, but states he is confident Serabi will do what it can to keep producing. He states Serabi Gold might not make the guidance numbers it predicated at the pre-COVID-19 start of the year, but if the company reaches 90% of it, nobody will complain, especially at the current gold price. The exchange rate is also on the company's side.  

Company page: https://www.serabigold.com/

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Interview with Paul Huet, CEO of RNC Minerals (TSX:RNX)

Paul Huet is as excited as ever with regard to their Q1/20 Quarterly results. He talks us through the numbers. We have been impressed with the turnaround of the company since Huet came in last June. However the most impressive element is that despite fires, flooding and COVID-19 they have not only been driving their costs down and therefore reducing their AISC (down to $1,101), but also they have been producing cash.

We have been pointing this since the announcement of the Q4/19 numbers. Investors need to understand what this cash allows them to do. The options are hugely increased. They have been looking at exploring some of their land packages with good results.  

Company page: http://www.rncminerals.com

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Interview with Rick Rule, President & CEO of Sprott U.S. Holdings

We go back to where it all started, and ask about what he wanted to be when he grew up. Rule talks to us about his personal and business philosophy.

We look at the end game and legacy. As Sprott's largest shareholder, what is he trying to build. And can they be considered an 800lbs gorilla yet? What does it take to move market and sentiment?

Can a company like Sprott, who has availability to cash and investors who follow their investments, afford to be less selective with the investment choices? Why does he spend so much time on marketing? We look at the different revenue and income streams and discuss perhaps why somer investors aren't equipped to invest. Rule's answer may surprise you.

Everyone has a different business model and will therefore have different outcomes even if they follow the same strategy. But we look at the importance of actually having a strategy. So how do the target investments? What about distressed companies? Who is in the driving seat.

What are the options available to retail investors. And how important are they at different times in the companies life cycle and different market conditions. And where do brokers fit in to the mix? Is the the landscape changing?

And finally what does the most recent bout of QE do for the global economy and the US?

Company Page: https://www.sprott.com/

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Interview with Jim Greig, President of Benchmark Metals Inc. (TSX-V:BNCH)

A really encouraging gold-silver story that investors should be paying attention to.

We last spoke with Benchmark Metals in September. What's changed? Benchmark Metals is a TSX-listed gold-silver advanced explorer in British Columbia, Canada. The company is looking to deliver up to 50,000m of drilling this year, a mineral Resource estimate, and a PEA. The track record of the team suggests they know what they need to do and how to do it, and the company has C$10M to ensure they do so..

What is Benchmark Metals going to drill on? The preeminent focus is the Lawyers Project in the 'Golden Horseshoe' of BC. In the heart of the property, there are 5 zones within 3km of one another. Several of these zones produced 30-years ago at a high-grade, but now Greig foresees several open pits at surface. The drilling will build upon data from 2018, 2019, and historical data over 30-years ago. These zones are being extended. Rather than hunting for high-grade veins like companies have done in the past, Benchmark Metals has focussed on mineralisation at a deeper level: up to 150m.

What is the game plan? Benchmark Metals is targeting multi-million ounces after this next round of drilling. In February, the company released an exploration target based on data from 1 of the 5 zones. The company put out a range of 1.7Moz to 1.9Moz at an average grade of 1.7g/t gold. With this next round of drilling, Greig believes he can increase the grade of the zone and bring the other 4 zones into the estimate. He thinks the company can move well beyond the potential of multi-million ounces. Benchmark Metals is fast-tracking the development of this project, so investors may be able to look forward to an accelerated value event. Because it's a brownfield type of play, there is a footprint to production that has already been mapped out, allowing Benchmark Metals to proceed faster. Like "any junior with an attractive project," Benchmark Metals would like to exit if a major comes along with an appealing offer.

Greig is building something for sale. He knows his skillset and has no intention of going into production. He wants to be taken out. Senior members of the management team have been involved in the full gold cycle, from discovery to development to production, so investors shouldn't be concerned if there is an unexpected change in plan.

What would a potential new suitor be looking into? Access to roads, a large power line, flat topography, no wildlife concerns and signed agreements with the local first nation. Benchmark Metals is fully permitted with a 5-year notice of work. Greig believes that if he manages to sit all these milestones, the company will be vaulting towards a +C$200M market cap. The major milestone events are what shareholders and investors are looking for. The management team are also big shareholders in the company, so they want to share in the success. The Senior statesmen of the company, John Williamson, was the director and founder of Kaminak Gold Corp. Back in 2016, it was sold to Gold Corp. for just over C$5M. Other members of the team have seen similar success, taking a $0.25 company to a $10 company.

Lastly, Greig touches on the increasing gold price. An increasing gold price will eventually help Benchmark Metals capture the value it has struggled to attain. Gold producers are reporting estimates over and above expectations. At some point, this will trickle down to the junior miners, such as Benchmark Metals, because producers eventually need to replace gold resources and ounces. The catalyst for a major to takeover a junior comes when the major depletes its resources in the ground.  

Company Page: https://benchmarkmetals.com/

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