Maple Gold Mines Ltd. (M3G0.F) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Kiran Patankar. I'm President and CEO of Maple Gold Mines. Delighted to be here today, delighted to be back in Colorado. I did go to school down the road here at Colorado School of Mines and always great to be back in Beaver Creek. Thanks to the organizers for inviting us to present and very excited about the enthusiasm at the conference. It's an exciting time for Maple Gold, and I'm happy to go through it with you today. We will make some forward-looking statements during the course of this afternoon's presentation. Let's talk about what really are key value drivers for Maple Gold, what sets us apart from our peer group. We are focused on building the next multimillion-ounce-gold camp in Quebec's Abitibi Greenstone Belt. We've got a district scale project, which we own 100% of, which is almost 500 square kilometers, straddling a first structure in the Abitibi. We've got amazing infrastructure. It's one of a few projects that has 3 million ounces plus with established road access and grid power. We've got 3 million ounces on our land package currently at our Douay project with lots of expansion potential. We have a high-grade past-producing mine complex, which was Agnico Eagle's first gold mine, which is also on our land package. And yet we remain undervalued. We've had great share price performance. We've done a great job of executing and the timing is perfect. Certainly, on an absolute basis, we've doubled over the last couple of weeks, some recent positive announcements, which we'll get into. But there's a clear path here in terms of what we have in terms of funded drilling, delivery of an updated resource estimate in the next couple of months, internal scoping studies, engineering studies on a path to development and production and lots of exploration upside. So we remain undervalued relative to the peer group. We remain ripe for re-rating. And the most important thing, rocks never change, but people do and everything starts and ends with the rocks. But really everything rests with relationships. I'm really proud of the team that we've built, the partnerships that we've strengthened with our key technical and strategic partners at Agnico Eagle. We brought in some long-term strategic investors recently in the form of Michael Gentile. And we've got a great Board, which has recently been refreshed. So it's an exciting time, and we'll get into some of the details. But when you look at all of the aspects that we tick, this is ripe for a re-rating. In terms of where we're located, we're in the heart of the Abitibi. In terms of a recipe for world-class deposit scale Tier 1 camp, we tick every box. You've got a major structure. We're on the Casa Berardi gold belt, right along a major deformation zone in the Casa Berardi, kilometric scale warp, large-scale system, multiple styles of mineralization, 2 known gold occurrences and lots of geophysical and geochemical anomalies. As we say, the biggest structures in the Abitibi are found along these major scale structures and ours happens to go all the way down to the mantle. We know that from the lamprophyre and carbonatite that's in the core. So we're in the right rocks. But we're in the right rocks, and we have great infrastructure, right? We have a road and a highway that goes right through the property. We have Quebec grid power connected to our project, which is $4 per kilowatt hour -- $0.04 per kilowatt hour. And we've got a great mining hub. We've got mines to the west of us, mines to the east of us, past-producing mine complex on the property. This is pretty rare. As I said, there's one of only a handful of projects in Quebec with 3 million ounces plus in established road and power access. And as you can see in Matagami, there was a past-producing operation that Glencore had. There's a rail line that goes down to Val-d'Or. So we're looking at optimizing this infrastructure as we move the project forward. Just a picture again on infrastructure. It looks like a mine site, right? It's got an established head frame. This was put in by Aurizon back in 1997. They dropped tools and moved on to Casa Berardi and made that successful. Obviously, Hecla is currently mining there. But at some point, people thought this was going to be a mine. We think it's going to be a mine today. And this is not moves pasture. This is an established project with a full-service camp. It's great. You're welcome to come up and visit any time. In terms of the strategic priorities, we have a dual-pronged approach really focused on exploration and development of a district scale gold camp. In terms of exploration, we've got a $10 million budget roughly for this year. We have $5 million remaining to be spent by year-end. We're going to be doing a 10,000-meter program, which is going to be split in terms of 5,000 meters at Douay, 5,000 meters at Joutel. And we've got lots of potential. You can see the red circles or the red stars at Douay. That's really a posted sample size of the overall property. When I say that we're undervalued, it really only gives us value for the ounces that we have at Douay. We get no value for the blue sky potential across the land package, and we get no value for Joutel, which shut down in 1993 after having produced 1 million ounces at 6.5 grams. So there's a brownfield potential. What -- when we talk about being undervalued on a per ounce basis, I think you have to show a path to what this could be from an economic standpoint. I'm an engineer as well. And one of the things that we're doing with our team, with our partners is looking at advancing the project, but also derisking it, right? Coming up with a proper geo mine model. We've got Ausenco teed up to do engineering trade-off and scoping study. We expect to complete that by year-end. We're looking at optimization of open pit versus underground and building on the good metallurgy and geotechnical work that we've done to show that there's a path forward. The resource is 3 million ounces. It is just over 1 gram on average, 75% of it is Inferred, 25% of it is a Indicated. It's a big system. You see a series of pits, it's 6 kilometers by 2 kilometers in size. So this would be a fairly substantial open pit operation. I just want to remind you, this was done by Maple and Agnico as a joint venture in 2022. This was done using $1,800 gold. Rumor has it that we've doubled in gold price. So there's some optionality here. And we are coming up with -- we've had SLR working on an updated mineral resource estimate. I'm going to see some preliminary numbers from that next week, but we anticipate delivering that updated resource estimate within the next couple of months. Just to show you what the optionality looks like in terms of the resource. These are what the pits look like across the Douay deposit. They're outlined in black. These were done at $1,800 gold and a 0.45 gram cutoff. If you look at what that looks like at the 0.3 gram cutoff, everything in beige included, but everything in white is what the new pit shape looks like. Our focus is on maintaining quality of ounces, not just number of ounces, but certainly, at a 3 million growing to 5 million ounce count for a company of our size, that would mean a substantial re-rating. Looking at it, you saw that section line on the previous slide. This is it in the long section. It goes from our Northwest and Douay West zone where the head frame sits all the way to our 531 Zone. We've had great exploration success with our last program. The black outline are the $1,800 gold pit shells. You can see there's substantial opportunity to expand those. Focus also as well on -- we're doing some systematic step-outs. Maple had previously done some very moonshot type 2,000-meter deep holes, showed a bigger system, didn't return a lot of gold. But those are over kilometer spaced. We've started taking more systematic down-plunge step-outs with better geologic model, and we've hit -- we've been very successful, particularly in the Nika Zone, where we hit one of the top 5 intercepts ever drilled at the Douay project with 2.1 grams over 109 meters, including 3.15 over 58 and 5.1 over 17. These are underground mineable all day every day and lots of room to grow. And at the 531 Zone, we stepped out from some very high-grade intercepts drilled in 2021 on 2 plunge axis, and we hit 4.87 over 15 and including 11.25 over 5, 3.66 over 11.4, et cetera. So we think there's potential to really expand the high grade, we focused on high return on investment exploration to really show that this can grow, but you notice the dearth of drilling below 500 meters, and that's really the opportunity here in the Abitibi. These are the areas where we see real resource addition potential with this next resource update. We're targeting something north of 4 million ounces here at Douay coming up in the forthcoming resource update. And these are the areas that -- especially at Nika and 531, these are where we're going to get back to with drills starting to turn again in early mid-October. We talked a little bit about the Nika results already, so I'll go through this pretty quickly. I think we'll go to the 531 Zone as well we talked about. So let's talk a little bit about Joutel. Joutel was Agnico's first gold mine. For those of you that don't know the history of Agnico Eagle, Agnico in 1972 was a silver, nickel, cobalt mine with a project in Ontario. It became Agnico Eagle via the acquisition of Eagle Consolidated in 1972, and they put this mine into production, the Eagle mine, the Joutel Mine complex. It produced continuously from 1974 to 1993. It produced 1.1 million ounces at an average grade of 6.5 grams. So this is a high-grade combination of 2 underground Eagle and Telbel and 1 open pit at Eagle West. This is a new block model that our team has created when we had a joint venture with Agnico. They digitized all of the existing analog data. This had never really been looked at since they shut it down in 1993. It's a brownfield opportunity, but we see visibility here. SLR is reviewing this right now, but we see visibility to add potentially 0.5 million ounces at 3 to 4 grams within the next resource update. And as you can see as well, we've allocated 5,000 meters of drilling to look at shallow targets at Eagle-Telbel. I should add, we've also added a 34-year veteran of Agnico Eagle and Marc Legault to our Board. Marc started his career at Agnico Eagle working on these deposits. This is the benefit of a strong partnership with Agnico Eagle. It's a benefit of us having 100% ownership of these projects. And again, today, we get 0 value for Joutel. So when we add this to our resource inventory with higher grade we drill some of these untested areas. We talk to teams that kind of always had their wishlist of where they wanted to go. We think there's substantial value to be unearthed from systematic exploration of what looks to be an exhalative VMS system with lots of upside potential at Joutel. Speaking of Agnico, great partnership, great validation. You've seen the performance that Agnico has had. We -- I think I could write a case study now on how a junior should manage a senior partnership. It's been -- we started at a $25 million market cap and some issues with the partnership. We restructured the joint venture. We basically brought in a very long-term strategic shareholder in Agnico. They've committed capital to date. But this is not just a financial partnership. It's a technical partnership. This is a material project for Agnico. We've added Marc Legault at the recommendation of Agnico. We've got a lot of history there, a lot of things to share technically. And it's a strong validation for what we and the team are doing. It's not just backing a high upside project that fits Agnico's model, it's also backing people, right? That's a critical part of this. And speaking of people, you've heard of me, so I've talked enough about me, but I think it's really -- it's a team that's building a successful company. My partner, Ian Cunningham-Dunlop, is really running our technical. We're drilling more efficiently. We're drilling higher quality, and we're doing it in a manner that's responsible, safe. We've got a great Board with great technical and capital market support. Gérald is a VMS expert. Darwin is an Executive Chair with Onyx Gold on whose Board I also sit. Chris Adams, who's here with us today, I worked with at Macquarie, he's got an extensive project finance background, and I mentioned Marc already. In terms of advisers, Michael Gentile has just become a 9.9% partially diluted shareholder, strategic investor and now a strategic adviser and Paul Harbidge as a technical adviser. So it's a great world-class team with which to continue to build value. In terms of the capital table, we just completed a 10:1 rollback. It's very been well received as well as our financing and the other completion of the company reset. We're trading at a roughly $75 million valuation. So there's lots of room, lots of good liquidity in the stock with good trading activity, 52 million tight share count and 8 million in the bank. So great coverage from Michael Gray, who's here with us today. We appreciate Lauren McConnell from Paradigm and a shareholder registry that is stellar, it's improving, it's got some great institutions, Agnico, Michael Gentile, I myself own about 350,000 shares, which I bought in the market. So just in closing, Maple Gold, it's on the path to re-rating. We're starting to get recognition for what we've done. Restarts are always -- and rebrands and resets of companies are always tough. But we've done the good work. The timing couldn't be better. We remain undervalued. We've got control of the district. We've got great partnerships with Agnico and great shareholders and lots of growth ahead of us. So with that, I will conclude, and we have about 1 million -- sorry, about a minute for question.

A minute for one question. Anyone? All right. I'll ask one. How far does that 8 million get you?

Yes. We'll complete our fall program with the $5 million worth of flow-through. The $3 million worth of hard dollar. We've dramatically reduced our G&A from $6 million a year to $2 million a year. So our G&A and our hard dollar capital needs are met through 2026.

Okay. Excellent. Well, thank you.

Thank you very much. Appreciate it.