Interview with Greg Romain, President & CEO of Gowest Gold (TSX-V:GWA)

One focus: gold.

Gowest Gold is a Canadian gold developer that is 12-years in the making. The management team is honest: Gowest Gold has made a number of mistakes. The team has missed several deliverables and targets; the market is clearly nervous. The company has a 120km land package in Ontario, "the city with a heart of gold." The company primary focus is on developing the Bradshaw Gold Deposit into the next new gold mine in the North Timmins Gold Project. Gowest aims to process its bulk sample by Q3/20, heading into production by mid-2021: ambitious, but can these words be relied on?

Romain has been involved with Gowest for 12-years since he joined as president/CEO. His background is as a chemical engineer. Should he have been put at the helm? Regardless, Romain jumped in with both feet. The plan was to grow a 500,000oz indicated gold resource at 6g/t to "at least" 1Moz and take a bulk sample. "Easier said than done." His words, not ours. Romain gives the 2009 global financial crash as an excuse. The Bradshaw Deposit was originally a JV with a private company. At the end of 2009, the company raised US$6.5M and undertook a 2010 drill program. In 2011/12 the company released a PEA with the Resource at c. 1.2Moz (including Indicated and Inferred). In 2015 the company produced a PFS. What happened in the 3-4 years in between? Off the back of the PFS, in Dec 2017, the company struck a deal for US$17.6M in debt to take Gowest Gold through to bulk sampling and production.

In 2018, the company received the first tranche of US$6M to develop the greenfield Bradshaw site. In 2017, the company had signed an agreement to acquire 50% of a mill in the Timmins camp. In early-2018, the controlling Chinese shareholder of the mill had a large reorganisation and decided to pull out of the JV with Gowest. This was partly down to Gowest Gold's failure to obtain certain permits. For the next 18-months, the company has nowhere to process its bulk sample, towards the end of 2018, Gowest Gold found another mill in Quebec. Gowest ended up signing a US$12M with the mill in Quebec, but the largest shareholders (42%), a Chinese private group, were hesitant. However, after lots of floundering, Gowest Gold is now "back at the mill it should have been at originally," the Redstone Mill, courtesy of an individual "at arm's length" to Gowest's largest shareholders. That being said, permits at the mill are still being finalised. Romain claims the company will begin processing the bulk sample at the start of Q3/20. Romain claims the 100% refractory gold at Bradshaw requires a flotation mill; is this what set the company up for difficulty? Romain thinks so. Do you?

Gowest Gold is looking at a US$1.6M with an expensive loan: 10% on a 1-year term, and claims the owners of the mill are the people putting up this money.

What were the economics surrounding the 2015 PFS? The AISC is a low US$900/oz, though Romain admits it will be higher now. The company has done "a lot of work internally" but doesn't want to come out publicly to avoid having to do another 43-101 Resource. Again, investors want transparency. The NPV was 27% at US$1,200/oz gold, now at C$2,000/oz gold, the IRR looks like at least 100%. Romain claims the government is pushing Gowest Gold to get the mill permits finalised because "they want us in there." He is adamant that this mine will produce, and Gowest Gold investors will be rewarded for their patience.

We've heard this all before, but are things different this time around? What did you make of Greg Romain? 

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

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