Interview with Scott Trebilcock, President & CEO of KORE Mining (TSX-V: KORE)

KORE Mining is a TSX-listed portfolio gold company with assets in California and British Colombia. A gold developing cookie-cutter? KORE Mining has four 100% owned gold projects and recently announced a promising PEA on its flagship Imperial Project; the current focus is on conducting exploration to grow its gold resource base and development. The company will develop Imperial for the next 3-years until it can enter a JV or be taken out by a mid-tier gold producer. KORE Mining has attracted notable strategic investors in the form of Macquarie Bank and Eric Sprott. The company's management owns c. 50% of outstanding shares: a really encouraging figure.

Trebilcock's background is working as a process engineer in the Canadian mining sector. He also has experienced generating shareholder value at base-metal miner Nevsun Resources, which was taken out for US$1.8B by Zijin Mining Group Company Limited on Dec 29, 2018. Trebilcock has been through the process of exploration, development and sale before. Reassuring.

The initial thought process behind Kore Mining was coined by Executive Chairman, Jim Hynes. The plan was to find a sector where assets were cheap, acquire and build up a portfolio of assets, develop and de-risk the assets to add value, then sell them to a mid-tier miner. Production isn't on the cards. This is a clear business model and we appreciate the transparency and logical approach.

The Imperial Project was acquired from Goldcorp for a surprisingly low price of US$150,000 for 2.2Moz (in an up gold market!). However, there are also a series of mandatory payments to Newmont Mining (the new owner of Goldcorp): US$1M of KORE Mining shares and US$1M cash when the mine goes into production. KORE Mining has put US$2.5M into the ground at the Imperial Project. The project has been previously carried through to a feasibility study in the 90s, so Trebilcock is confident KORE Mining can accomplish this affordably and in a reasonable timescale. While it is difficult to do much off the back of a PEA, what were the key findings? CAPEX: US$142M, 28km exploration space, a simple run-of-mine heap leach process (low-cost), 146,000oz gold per year, 1.2Moz LOM production, 44% IRR at a very pragmatic US$1450/oz gold price, and a US$343M NPV 5% after-tax at the same gold price.

Will any federal regulations be a barrier to KORE Mining? Trebilcock sees the issues as nothing more than social licensing issues that mining companies will always have to face.

Looking at the numbers, KORE Mining had US$2.6M towards the end of February, with a planned raise in 2020 provided COVID-19 becomes less disruptive. Trebilcock believes the market will wake up to the opportunity the company offers; thus, KORE's 2020 budget is higher than its current cash. Could Equinox Gold see the Imperial Project as a potential target? Trebilcock is coy on the issue, but it might make logical sense considering its proximity to Mesquite.

Is the c. 50% ownership, combined with Sprott's 12% and Macquarie's 5% a liquidity problem? Trebilcock is clear that this is one of the main problems KORE Mining faces. Retail investors have very little to play with and expect imminent dilution.

What did you make of Scott Trebilcock? Is Kore Mining's gold portfolio an investment opportunity you might consider? 

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

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