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

Good afternoon. Thank you very much. My name is Kiran Patankar. I'm President, CEO and Director of Maple Gold Mines. Delighted to be here at the conference. It's our second time here, and it's more exciting even this year with the gold price and Maple both performing. So delighted to walk you through what's new with Maple Gold. Before we get going, we are going to make some forward-looking statements during the course of today's presentation. Why Maple Gold Mines? Maple has undergone a dramatic transformation over the last 2 years that I've been in leadership chair. It does tick some very important boxes in this elevated $4,000-plus gold price environment. It's a market that's had a number of transactions over the last couple of weeks announced, big ones. And they all seem to be focused in Canada, and they seem to be focused as well, 2 of them seem to be focused in the Abitibi, which is where we're located. So the key thing for us is we've got a major scale, district scale land package, which is 481 square kilometers in Quebec. It straddles a first order structure in the Abitibi. It also -- the land package has an established 3 million-ounce resource base at Douay. It also has a high-grade past-producing gold mine complex at Joutel, which was Agnico's first producing gold mine. And exploration potential across the property, this is significantly underexplored, right? It's been consistently held by junior companies in times when capital has been scarce. We've just reinvigorated and strengthened our balance sheet, so have a strong balance sheet to execute one of the largest drill programs that Maple's ever attempted. And we have, importantly, a clear path to growth and re-rating. I'll walk you through sort of where we see those opportunities. But as I said, it's a new company. Most -- there are people probably in the room that are familiar with Maple Gold in its previous iteration. It is Maple Gold 2.0. The name is the same. The people are different. The project, obviously, geology doesn't change, but management, the new investors we've brought in and again, the stronger strategic partnership with Agnico are reasons why people should take a very careful look at Maple Gold. Just a snapshot of where we are today. We have a $1.45, $1.50 share price. We're listed on Toronto, the OTCQB in the U.S. and in Frankfurt. At that market cap, but we trade close to our high over the last year. We've seen excellent performance in the share price over the last 6 to 8 weeks in coordination with the execution of some major transactions for the company. So at that share price, we're in roughly $90 million market cap. Liquidities are up $61 million. We did a share rollback, 10:1. The share price actually performed well despite rollbacks typically being viewed by retail investors as negatives. So we have 61 million out, 73 million fully diluted. There are some options and 9.4 million warrants. All of those are in the money, average strike price is $0.85. Our cash position today is $20 million, $21 million. We've got research coverage from Agentis Capital, Michael Gray; and Paradigm, Lauren McConnell. And importantly, what we've done is we've really added and strengthened the shareholder base, particularly over the last 6 weeks with Michael Gentile becoming a new strategic shareholder. He currently owns 4.4%, partially diluted, takes him up to 9%. We've just welcomed Franklin Templeton as a new investor in the company at 9.9%, along with strong support from CDPQ, Fidelity, Goodman, et cetera. And of course, Agnico Eagle is our largest shareholder. They've continued to support not only through capital raises and financially, but also importantly, as a technical -- strong technical and strategic partner and partner of -- probably the best partner that you can have in this part of the world. In terms of the people, I mentioned that the people have changed. So I've been with the company since 2021. I started in growth strategy, corporate development, moved into the CFO chair, really got a handle on how the company was spending and frankly, misspending some of the money, got the G&A down from $6 million to $2 million and then took over as CEO in 2023, which is when the real changes at Maple started. One of my fellow directors, Gérald Riverin, has also been with the company since 2020. But everyone else that you see on this org chart in terms of the capital and technical depth are new, right, new within the last 2 years. I just want to point out, in addition to Michael Gentile, who's on as a strategic adviser on the Board, we reshuffled and added and strengthened our Board in August -- in late August of this year, August 31. Marc Legault joined us from Agnico Eagle. Marc spent 34 years with Agnico Eagle. He was project development. He was a mine geologist when he first started and then he ran the operations for Agnico in the Americas. And Marc actually started his career working at our Joutel project. So there's a lot of in-house knowledge of how to take a project from exploration to development into production in the Agnico Way, which has been very successful. And I've also joined and pleased to have Chris Adams having joined us. Chris and I worked together when I was an investment banker at Macquarie. Chris is an investment banker and most recently was running the project finance group for Macquarie in the Americas. So you couldn't ask for. We got a dual-pronged strategy of exploration and development, having the expertise in-house of understanding what moves the needle from a project finance standpoint is really important. Darwin and I have known each other for years. We sit on a Board at Onyx Gold as well as Maple. And Ian Cunningham-Dunlop is running our technical programs and is both a geologist and an engineer like myself. So a strong team and strong strategic partnership with Agnico Eagle. I mean Agnico is not spending money on things that don't move the needle for Agnico, right? They've written recent checks. They've got a $25 million total investment in Maple between direct project expenditure and equity investments. They're our largest shareholder at 13.1% on a basic shares basis, 14% partially diluted. They do have a back end on the project, which is 50%, which is what we originally had as a joint venture. I thought it was strong for us to restructure this joint venture to make sure we've got 100% ownership and control over our own destiny, which has proven out. But they do have economic alignment, long history in the district. They continue to participate in financings and come to site and spend time with our team and provide technical support as well. And again, Marc, having spent a lot of time there, they have the right to nominate a director, but Marc was sort of retired from Agnico as of 2022. So obviously, Marc has a long history with Agnico and knows how the Agnico way of doing things, but he's a very strong addition to our Board. The priorities that we have over the next 12 months is really execute on an expanded 30,000-meter program, expand our resource of 3 million ounces through systematic step-outs in some priority zones, delivering a resource update in the first half of next year, concurrently derisking the project. We have Ausenco working on a scoping engineering study. My view is it's not about the number of ounces, although numbers are important and multimillion ounce projects in Canada with infrastructure are very rare, as I'll show you. It's also about quality of ounces, right? I think that's been one of the recipes for success for Agnico is focusing on high-margin ounces. So we're not just trying to put low-quality, low-margin ounces and grow our resource base from 3 million to 5 million. We're really trying to show the quality of the resource can grow and develop with this project. And again, the point of what we've done over the last 6 weeks is develop a balance sheet with the right kind of long-term supportive shareholders. I continue to spend de minimis amounts on G&A. I'm a large shareholder of the company. I want to put my money into the ground where it creates value. We've got excellent momentum from the last program, which we completed in the spring with good exploration success. And our goal, obviously, is to raise capital with minimal dilution. So where are we? We're in the Abitibi. I mean this is elephant country. The key thing for us, though, is we're located. We straddle a major structure in the Abitibi that has mines to the west of us and to the east of us. We're located on a major corridor. There's a highway that runs through the property. And importantly, for the technical people, you don't need to be technical to know that you need to be fishing in the right lake to find major world-class deposits. This ticks every box from a geology standpoint. We control 500 square kilometers on a prospective belt. In terms of infrastructure, there's a highway, as I said, that runs -- it goes right through the property. There's Quebec hydropower, it's $0.04 per kilowatt hour, which is connected to our camp and our project site. You've got, as I said, this very interesting strategic splay in the Casa Berardi, where it splits into a deformation zone north and south. We own all the ground in between. I'll show you why that's important in a second. But you can see just the number of mines and mining projects in this area. As I said, this is the reason why -- and Agnico has got a number of operations between Detour and Malartic and Macassa kind of in this area. So this is where all the majors are really looking for potential growth in ounces with infrastructure. Just picture is worth a thousand words. This is what the camp looks like. It's not your typical moose pasture, nothing out at site other than a couple of tents and very seasonal. We've got a full-service 46-person camp. We've got a head frame that was put in by Orezone in 1997 before they discovered Casa Berardi, which is now operating by Hecla. They picked up tools. They went over Casa Berardi, left the infrastructure, have an exploration shaft at Douay West down to 30 meters. So this is a real camp. You're all welcome to come and visit us. The focus for the company, as I said, it's a big land package, right? It's always been sort of run by junior companies, but we've got this huge -- our resource currently sits at Douay on only 6 kilometers of a 55-kilometer strike length on the Casa Berardi that we control. So areas outside of the existing Douay resource area and the Joutel mine complex, which you can see on the lower portion of the property map, areas outside of that remain relatively untested. We have staked some ground in the sediments just recently. We're going to probably do a little bit more consolidation to really add to the land package in a low-cost way. But really, the focus is dual-pronged. It's focused exploration and disciplined development. This is what the resource currently looks like. It was done by Maple and Agnico together when we were joint venture partners. So it has the stamp of a major partner that spent a long time, 100 people resource team looking at the parameters of this resource. Importantly, it was done at $1,800 gold. So again, I said we're going to be doing an updated resource estimate scoping study coming in the first half of next year. Just an illustration, again, we're not looking to bring low-quality ounces into the mine plan, but this is the 2022 SLR using a 0.45 cutoff and an $1,800 gold price. You can see in black the outlines of the $1,800 pits. Just to show you what it looks like, this has all the drilling above 0.3 grams. And obviously, it's a heat map. So anything that's in red is greater than 10. We like that. When you look at what this would be at a 0.3 cutoff, you can see this is not what we're going to do in the next resource, but this just shows you how the pits start to hold together and what the potential is for optionality, right? Just to show you again, it goes from this to this by just changing the cutoff grade. That's not what we're going to do in the next resource, but that's illustrative of the optionality with the project. Important thing is I put in good process with the team, how do we find, how do we plan, how do we prioritize drill targets. There's a model, right? We understand we've relogged all the core. We've added all the lithogeochem ICP data, geophysical data. We know what drives gold mineralization here. So this is the reason if it's inside the bull's eye, it gets prioritized. If it's not, it goes to the bottom of the list. We've got a $13.7 million program coming up between now and 2026. It's the largest in the company's history. Just for time, I'm going to just illustrate, this is a long section looking through the deposit. You can see the $1,800 pit shells are in black. You can see where we had major success from our last programs. 338 was one of the top 5 intercepts ever drilled on the project. And you can see some areas that didn't quite make the pit that had a lower cutoff and even some optimized pit shells are probably likely to make a pit. Here are the areas that we're focused on for future follow-up drilling. You can see we've got 20,000 meters planned. And you can see relative dearth of drilling below 500 meters, which is also a real opportunity with this project. You guys are familiar. I've skipped through a little bit of the highlights of the drilling program. I mentioned that we had one of the top 5 intercepts at Nika. We also had excellent high-grade results at 531. This is where the rigs are going to start turning starting next week. We've got all of our permits. We're ready to go. I just want to flash through and show you a little bit about Joutel. Joutel is the project that Agnico contributed to the company. We get 0 value for it today. We -- Agnico mined 1 million ounces at 6.5 grams and shut it down in 1993, not for lack of additional resources, but because they moved on to LaRonde and Goldex and became the $100 billion company that they are today. There's a lot of low-hanging fruit here. We've got 10,000 meters planned. This is a new block model that we've done with the existing Agnico data. We're targeting roughly 0.5 million ounces here in the next resource update, a maiden resource. So again, just to wrap up, we talked about all the things that Maple Gold ticks in terms of all these important boxes from an investor standpoint. But one of the things is there's a relative dearth of these 3 million ounce plus Canadian gold projects with infrastructure. Maple is one of a handful. We just saw 2 companies that are on that list taken out, right? And Maple, if you look at our valuation on a per ounce basis, USD 16 per ounce. I mean the average of the peer group is USD 42. So the downside risk in our view is relatively limited. On the other hand, the upside of executing a 30,000-meter program, demonstrating the potential for additional ounces and high-grade ounces at Joutel, continued support from Agnico Eagle and updated resource that approaches 5 million ounces, et cetera. I think there's a lot of opportunity for a re-rate. And I think this is an excellent value in today's market. So with that, thank you very much, and I'll happily take a question with the remaining 30 seconds.

No question? All right. We're going to leave it at that because we're actually 2 minutes behind. Thank you so much, Kiran.