High-Grade Gold & Copper in Chile | San Lorenzo Gold CEO Interview
Summary
Investment Focus: San Lorenzo Gold is exploring multiple gold and copper targets in the Atacama Desert, Chile, with a 9,000-hectare land package, emphasizing the potential of the Sarah Blanco target.
Exploration Highlights: The company has identified four key targets, including Sarah Blanco, Arco de Oro, Tres Amigos, and Cabay Muerto, each with promising mineralization results from initial drilling.
Market Position: San Lorenzo Gold is listed on the TSX Ventures Exchange with a market cap of over 55 million Canadian dollars, and its stock is trading above both its 50 and 200-day moving averages, indicating positive momentum.
Financial Overview: The company has approximately 2.1 million Canadian dollars in debt, primarily from insider loans, and plans to convert these debts into equity due to favorable conversion terms.
Operational Strategy: The current CEO, with a background in oil and gas, is temporarily leading the company, focusing on exploration and potential discoveries, while planning to bring in a more experienced mining executive in the future.
Risk Management: The company acknowledges the high-risk nature of mineral exploration and emphasizes the need for further drilling and IP surveys to validate their targets and enhance shareholder value.
Community and Environmental Considerations: San Lorenzo Gold is mindful of regulatory requirements and community relations, especially concerning water usage and environmental impact in the arid Atacama region.
Future Plans: The company aims to complete its current drilling program before considering additional financing, with a focus on creating shareholder value and potentially involving strategic partners in the future.
Transcript
Today on the CEO barbecue, we'll be looking for gold and copper in the atom region of Chile together with San Lorenzo Gold. If you want a bullet point summary of this conversation and all the other CEO barbcues in your inbox once a week, go to resource.com and subscribe to our free newsletter. Now, the company you're about to hear from has paid us for the production of this video, which means that this is not research. It's an advertisement and you should treat it as such. Research is conducted by reading the company's official filings which you can find on setterplus.ca. And please only watch this if you absolutely know what you're doing. This interview is intended only for experienced junior mining speculators because mineral exploration development and mining is a very tough business where failure is the norm and should be the expectation. This is going to be a conversation that is general and impersonal in nature containing forwardlooking statements. I am not a licensed financial adviser and my business sells content producing services which also makes me biased in multiple ways. So before continuing on, please talk to an independent investment adviser with a good long-term track record because your capital might be at risk. If you're not 100% sure you understand 100% of the disclaimers I just showed you, please go to the last section of this video and do not consume this content unless you fully understand and agree with everything said therein. That said, San Lorenzo has multiple gold and copper targets on a 9,000 hector land package in the Adakama Desert, which is located, of course, in northern Chile along the Pacific coast, and it borders the Andes mountains to the east. Uh it's uh about 15 km south of Cadelo's El Salvador copper gold pfrey mine there and it's also roughly 30 km from the portra smelter. Um I'm probably butchering that name but I'm not going to pull out my best Spanish accent for this conversation. Maybe another time. The core of the current thesis for Salorenzo is uh really they have a couple of targets. So they got uh four targets that are of of Marin here that we'll talk about. But the core is essentially target number one. It's called Sarah Blanco and the company describes it as a goat rich porefree system although the jury is still out on whether this actually is a pfrey. So we'll talk about that as well. Some intercepts um came in as high as a gram per ton over 153 m in the discovery hole which is actually what brought this to my attention as well. There is a large alteration footprint at surface here and management links the intercepts um and the alteration to a deep IP chargeability which they think is a potassic alteration at depth which could be a vector to a possible free core rig on side right now positioned to test the strongest of those chargeability segments next hoping that they'll be able to find um something that's hopefully similar to El Salvador and thus containing serious scale and and we'll talk about that of course is that mineralization uh and that core too deep though and will the current drill program answer those unanswered questions is of course something I'm going to be asking about in the conversation. Target two is Arco the Oro that's an epiothermal vein corridor with higher grade gold uh being intercepted along a 1.2 km stretch of what is believed to be a 5 km trend with the most recent drilling showing 4 1/2 m of 6 1/2 g of gold and peak values of almost 18 g per ton. Target three is fittingly tres amigos which is a copper rich epiothermal system with some historic production from the oxide part of the mineralized zone and and some past drilling showing 34 m at a percent and a half copper there. And last but maybe not least target four is called cabay muerto. This is another potential pfrey target that San Lorenzo has whereund and um 22 meter interval came up with almost a gram and a half in the discovery hole. So, there's an IP ongoing here and uh some more drilling might be in order, but hopefully more about that later on in the conversation. Now, Renzo is listed as SLG on the TSX Ventures Exchange where the average 3-mon volume is about 190,000 shares. The stock's 52- week high is 79 cents and 52-we low is 5 with a market cap of just over 55 million Canadian dollars and just over 80 million shares outstanding. today. This is a 70 cent stock with a 50 and a 200 day moving average at respectively 52 and 28 cents which means the stock is now trading well above both of them and thus indicating a positive upward momentum. Moving on to the share structure, there are no warrants outstanding. There just about uh 3 million options exercisable at 16 cents per share. So the number of fully diluted shares is close to the number of the shares outstanding. We're talking 83 million here, meaning an increase of just about 3 and a half% in shares outstanding could happen if all the dilutive securities get exercised, which would then result in about a 3% ownership dilution if, and of course, always a big if, but if all dilutive securities get exercised. And of course, none of this accounts for potential dilution down the road, which is not unlikely given that this is a pre-revenue company that operates in a capital intensive industry. Talking about capital, I'll now go through their latest financial statements which shows me the numbers as of June 30, which is now almost four months ago. And at the time, the company had in total about a million Canadian dollars in current assets. It was mostly in the form of cash. In terms of liabilities, although unusual for an exploro does have some debt. Um there's on the current side of the liability side of the balance sheet, at the end of June, there was still about a million half dollars open. though notably basically all of that is due to related parties or or their note payables. Largest part is is due to lithium chilate $1 million payable which was renegotiated some 3 years ago but that is now due by the end of this year and it carries an 8% annual interest to it. There's also an insider facility converted to a term loan where essentially some debt plus advances to um I believe Al here uh were rolled into a credit facility about a year ago. So um max a million dollars 8% annually secured by GSA convertible at 20 cents for 2 years that auto convert uh once max into that again term loan here maturing on November 30 2026 but then subsequently on August 5 the same director so again I believe it's Al provided a second credit facility up to a million dollars 8% again only convertible 35 cents this time which when fully drawn uh it could autocon convert into again a term loan maturing on July 31st, 2027 with a one-year contractual hold on any conversion shares. All in all, bottom line, about $2.1 million of debt here. And uh I believe again it's a CEO who holds a part of the part of those loans. So as you can figure, not a simple situation. Hopefully I'll be able to get some more details on it later on from Al himself. Moving on to the P&L for the six months that ended on June 30. The total amount recorded as expenses for the period shows up as $315,000. So though that includes some non-cash expenses, sharebased compensation and some recreation. So the actual out of pocket cost was call it 295. It means the average cost for the period was about 50 grand a month consisting for 70% of GNA and the rest is uh the interest on the different debts and fortunately no breakdown on the GNA but I'll be asking about the way they plan on spending money in the future later on in the conversation as well. This is an exploration company. So they also spend money on drilling and geology of course, but those expenses get capitalized. So we can find some more details under note 4 in the financials where I can see that the additions for the period were $68,000. But again, unfortunately no breakdown for this either. Um although I assume a large part of this was actual drilling given that there was an ongoing drill program during this reporting period. This is where I normally provide the drilling to marketing ratio which looks at how much money a company spends on marketing versus how much they actually spend on their main business activity. But again, I don't have that breakdown right now. I do have the overall administration to exploration ratio here. That was about two and it means that twice as much money was spent on exploration as it was spent on administration or in percentage terms 66% of the money was spent on exploration. As always though, I'd like to remind you that exploration businesses can change relatively quickly. So these numbers may not be entirely representative of the current or the future situation for San Lorenzo. So go to setplus.ca and look at the numbers yourself. Now I've been referencing a conversation here, but for this to actually become a conversation, I'm going to have to shut up already and Al, I'll give you the word here. But first of all, thank you so much for sitting down with me today. >> Well, thanks for having me. Great to be here. >> Pleasure is mine. And and although this has been um a highly requested interview really for for I think over a year now, this is actually your first time on the barbecue. So we have to go through the smell test first. Starting off with yourself, what is uh who are you? What's your track record? And have you more importantly made more money for shareholders than what you've spent during your career so far? I have uh my background is oil and gas principally. Um been involved in the resource sector especially um oil and gas since about uh 1980. Uh pivoted a little bit towards the mining sector in 2009, but the the bulk of my time was on uh on oil and gas based out of Calgary. um involved in the startup of a number of junior oil and gas companies that ended up getting sold to larger entities. >> Mhm. >> Background is in engineering. Um chemical engineering, I guess, to start with. Um not so sure I practice any of that anymore, but um um I've been more in the administration side and and just resource hunting for the last um many many years. >> Mhm. Do you currently do anything else? Do you have any other executive or board positions with other companies? >> I have no other executive positions, but I do sit on a few other boards that are involved in mineral exploration. >> Does that take up any of your time or how much of your time would you guess goes towards uh San Lorenzo? >> Oh, 80% of my time goes to uh San Lorenzo. >> Okay. How much of your time goes to cycling? I think I can see a cycling a cycled tire there up in the corner. >> Oh, not a lot. A little bit, but not very much. >> Um, jokes aside, do you now that you're you're C is this is this your first time being CEO of a of an of a exploration company? So, everything before this was was oil and gas. Is this your first time in exploration? Is that right? >> Yes, it is. >> That's correct. Do do you like it essentially is what I what I ask or do you plan or or want to remain the CEO as as the company goes through again this discovery growth process here? >> Well, I've been pretty clear I think uh publicly and uh in meetings that my appointment here is a is a temporary situation. This is going to need someone with a greater skill set in the mining side than I have, which includes capital markets exposure. Um, in other words, a name that's known. Um, I'm taking this on as a labor of love and and really enjoy it and together with my partner Terry Terry Walker in Chile. And we're really having fun with this because the the property we're working on really has such great potential. But to properly answer your question, I don't see myself in this role in a year. >> That's very specific and I do do appreciate it. I think it's the oil and gas background. I think with with mining CEOs often times I would get a fiveminute answer and then I'll be like, did they answer my question? No, they didn't. So, I do appreciate the specificity there. Um, how how many shares of San Lorenzo do you own right now? And and what's the average cost that you've paid for those shares? It would take me a minute or two to think about the average cost, but um we have a substantial u position in in San Lorenzo when I say we I include Terry Walker in Chile and I also include his and my friends and family and I would expect that that amount would be very close to 40%. 40 >> and that's um so you said friends and family. So what percentage of that would be reportable? uh reportable by myself. Um it's yeah, you've got me on the spot right now because I don't exactly know that number. Um but some are held by companies that I'm involved with but not are not in control of. So um >> I'd have to look I'd have to look on C or on set a I'm sorry to answer your question properly. Really what I'm looking for here, Al, is is where I'm going with this is of course skin in the game. Um, but as I mentioned earlier, you have another layer of of of skin in in this game in San Lorenzo, and that's through the the loans that you've been providing for the company. You bank brol program essentially and again, not something typically seen in these companies and not something that's always uh looked at positively. So maybe you can talk to me about that. What are you what are your plans for this debt? Will you convert it all? Uh and and what are the timelines for those decisions? >> Well, let me go back to uh the start of it. So, we were trading at a pretty uh low share price uh 6 cents approximately 6 to 7 cents. And it's true that we didn't get the uh the story out very well. And that has changed over the last number of months, but certainly um we've been working on it for quite a few years. In fact, since 2013. And so we're kind of like one of those 12 year overnight successes I guess you would say. Um I've been funding a great amount of the expenditures in the field which of course is why my share position and Terry's in fact are reflected in the numbers that I spoke about a minute ago. But then we um we exited that malass malaise I guess you'd call it from 2012ish to 2017 18 and felt like maybe it's time to really have a look at this a little stronger and that included more and more geocam surface geocam and IP and and all the traditional exploration models including boots on the ground of course and with the benefit of moving forward. We put drills in the hole and every time we do it, it seems like we encounter alteration and mineralization and some really really great uh results. So we had a target called Sarah Blanco that we're going to speak about in a moment. I think that was rather remote. So because of our very small budget, we really didn't have the money to build the road, which we did last summer and that was 7 kilometers to access this target and then set up on a drilling program that included that target Blanco and Arodioro. And you're right, you asked, did I finance that program? Well, I did because I advanced a $1 million credit facility. Now I I just want to make sure that your viewers know that um it's important that everybody can share on in the uh in the upside here. We had a 6 cents stock price but uh made the conversion uh price 20 cents on the on the uh first facility so that everybody could enjoy a multiple uh from that position. And yeah, um, better lucky than good. I don't know what what do you say? The results worked out pretty good as you as you alluded to there earlier. And so, um, we did some IP and and some more surface, geocam, etc. over this past summer. And just recently, we've done another $1 million credit facility. The stock was trading at about 21 cents and we made that convertible at 35. But the whole point is that um shareholders would make some money before I would be in the money. Now, you know, with the benefit of hindsight, it all looks so simple, but it's not always quite so simple when you're looking forward. So, um that's what constitutes our debt. And I hope I answered your question, but yes, we um we've had some funding from myself in order to pro or avoid significant dilution, especially when we were down at the 6 to 7 range and additionally when we were at the 21cent range. I feel that uh it did the shareholders well and I'm looking forward to uh continued positive results. You asked me about that debt. Well, it's convertible and it's quite clear it's going to be converted because it's quite in the money. Clearly, the 20 conversion piece is is very much in the money and um even the 35cent conversion piece is in 100% of the money. So yeah, they're going to be uh converted and um we're looking forward to completing this next program that we're doing right now of about 10 holes with that second facility and the cash that we received from warrant exercises after the program we completed early this year. >> Well, you said you're looking forward to getting uh good results back from that drilling. What if you don't? What if what if what if results are not as good as you hoped it to be in market maybe not as happy would you be there still you know g giving loans or loan facilities to the company or are you at a point where you're like nope I'm done now >> oh that's the farthest from the case um I'm not looking for uh or anything here to other than to say this is a labor of love I'm not being paid Terry Walker's uh being paid a kind of a pittance you might say, "We're doing this cuz we love it." And and I I love the smile on Terry's face when he looks at some of the rock there and and it's great. So, am I going to be there 100%. I mean, now now let's keep in mind when I say that that there's some significance to this property and some real inherent value already. So, it goes without saying that we're going to back it. And um as it moves forward, I >> I'll table the money talk for a while here, but we'll definitely be back to it once we're talking about your plans or goals for this year. But, um back to skin in the game here. Uh you mentioned Terry and everything else uh or everybody else. Is is that is that it? I mean, it's essentially you and and and Terry who have the rest of the insider ownership or what about the other directors and who owns what? >> It's principally Terry and myself. Well, and family, friends, family and friends. >> Yeah. Yeah. Um, talking about other insiders and Terry, uh, do you or any of the other um, insiders or family or friends personally own a royalty on any of the projects you have? >> No. >> Good. That's the right answer. I like hearing that. Um >> maybe coming from oil and gas that even surprises you that I have to ask it and it surprises me as well. But I do have to ask it because sometimes it is the case. Um this is this is all about incentive essentially which I believe is one of the most important subjects in finance. But so wi with those talking about insiders how do you get incentivized? I mean, you say you don't get a pay and and it's a labor of love, but it are you going to implement a structure for insiders and executives? Is there is there going to be a bonus structure? Are there going to be KPIs implemented or something like that anytime soon? Or are you just going to keep writing it out until until, you know, a potential resolution? >> Well, let me answer that in two parts. When it comes to Terry and myself, what more incentive do we need than a large equity stake? That's what we're doing it for. we get, you know, we're going to be rewarded through our equity. Now, the second part of the answer is I already alluded to that I'm not going to be here probably in a year in the position of CEO. So, will we have to um implement a structure that includes bonuses or or other incentive uh plans to attract the right additional people into the team? Yes, of course, we will. We don't have that in place right now other than a simple stock option plan which has about 40% of what's allowable already issued. And we're we're going to wait on awarding any other options until perhaps other team members come in at the same time. That timing is subsequent to the drilling program probably that we're doing right now which we think will be between the date of this interview and so in other words mid-occtober but we'll be drilling right through to Christmas and and possibly thereafter with a short break during Christmas time. So I'm trying to really give you a good feel for um for the timing we're looking at going forward. That's fair. And we will be talking about the timing. I think this about covers my my smell test if you will. I do want to talk about what you mentioned earlier when I asked you if if you'd like to remain a CEO, but how do you see the future of the company given the context of there being again four targets here and um not just the one? I mean, are you looking to make a discovery at SE or grow the discovery at Sarah Blanco and sell the company eventually or would you want to only sell that target, make other discoveries? Yeah. What's what's the real goal here? >> Well, to look that far forward is going to be very difficult. Um, our goal is to make discoveries um really create value. Um, we believe we have something special in Salvador. We really do. There's uh four targets as you as you mentioned, but they're not, you know, tiny little things. Um we're we're searching for uh some very significant um accumulations. These are big targets. We're early in the game admittedly as far as our exploration goes, but I would point out that all of the drilling on the property has been done by us. We're not recycling old holes or anything like that. We're the ones that have done the IP and and the boots on the ground geocam and and the drilling. So, it's an exciting time. And when you've got lots of excitement, it it's not like you're planning that far down the road. I'm trying to be candid with the not going to be here in a year in a CEO position. Um I think every shareholder would be relieved to for to hear me say well let's get a name that's quite well known in the capital markets and in the mining space itself and um bring this to the next step. That's about as far forward as we've gone. Other than to know that this property can support an awful lot more than what of exploration I mean than what's going on right now. An awful awful lot more. >> This is actually a good point to do indeed talk about the star of the show here essentially your flagship target Sarah Blanco which is a relatively new discovery. But how come actually how come nobody discovered it before you did? What's the history here and and why was it on the market when you picked it up in the first place? >> Well, it's been a long process of uh picking it up. By the way, we started in 2012. So, um it was a smaller property package at the time and we've been adding to that property package over this last 12 13 years uh to where it is right now. Um you know, we get asked that question or I've been asked that question the oil and gas side a lot. Well, if it's this good, why didn't somebody else do it? Well, you really, you know, you could say that probably about every project in the world, you know. So, um, it's in a great jurisdiction. Um, I would point out that there was quite a malaise in the mining business, you know, between 2012 for the next 5 to 7 years and we took advantage of that period of time. So, uh, we feel very good with the position that we have now. And um then again, you can always do the serendipity comment and say, you know, better lucky than good when you get your land position. And uh that seems to be working out as well. >> Mhm. How big could this potential deposit get? What's your target size? Because you mentioned always that it's going to be you're not chasing after small things here. That's what you like saying. So yeah, how big does it have to be um to make that strategy or goal happen? Well, before I answer that, I'd like to just take one quick step back. You mentioned that the star of the show is Sarah Blanco at Salvadora. I'm not so sure about that. I personally love Arcodoro. um we believe that we have a very significant resource there already but I want to make sure that I I very clear here that that's not a 43101 compliant comment but parallel we'll talk about in a bit in a minute I'm sure but parallel and intersecting hydro um uh vein systems hydrothermal vein systems that epiothermal in nature that um appear to continue for well over 5 km. And you might say, well, how do you know that? Well, we have an an additional exploration tool, and that is surface workings along the trend that have been going on. They haven't been going on over the last few decades, but but pick and arrows over the over the years, and and we've done quite a bit of IP across there and and very significant targets of IP across there as well. So, um, I'll stop it there because I'm sure we'll go into it a bit, but that really attracts me as well, Aroro. And very candidly, so does Kabay Muerto and so does Tesos. So, um, yes, a lot of people are all over Sarah Blanco saying that's the one you got to go after. You asked me a specific question. How big does it have to be? Well, we're not targeting a million ounces. Now, what's this all going to look like at the end of the day? Let's just keep in mind that just to the north in a very similar geological setting, a caldera collapse zone, um the El Salvador mine has produced 24 billion pounds of copper and well over 5 million ounces of gold. I think more than like six. And I mean, how big does it have to be? Well, we're not looking for a million ounces. We're looking for an awful awful lot more than that. Having said that, we're early in the game. >> That's almost an answer, I suppose. I was really looking for you to say, I want 5 million ounces. I'm going to have it there by 3 years. Um, but I I I I understand that's not something you can go ahead and and and say or claim like that. Um just before we continue on with >> I think I probably could at our kudoro but it's subject to um it's subject to drilling success of course but um I'm not trying to obey the question. It's just it's too early to be able to say that it it's a big target. >> What just before we continue on with what's zero? What's your favorite target? Which of the four would you if you had to drop all of them and only keep one which would you keep? Maya, I sure wouldn't want to do that. In other words, that's not a question I I I'm in a position to answer. Um, we're fortunate that we hold those land pos that land position on all those targets. And the truth is that we have one or two other targets that um have not been drilled yet that look very um interesting from surface geocam from IP. But um yeah, you know what's interesting is that when you talk to people about Salvador, some of them really like um Sento Blanco and then some of them really like Ardodoro and then there's a few people say, you know, that's a sleeper there that could buy a muerto that's probably a deposit already. I can't say that, right? I mean, we all know that, but u it's so intriguing. There's multiple events have happened here and it it's just um it's a special special opportunity to Salvador. [Music] >> Well, maybe I'll ask Terry that question once I speak to him next time, what his favorite target is. Um back to Sarah Blanco because that's where the drilling um has or is taking place. How much more drilling do you think and how much more money do you think you'll have to spend on drilling before you can prove up that critical scale whatever it might be? You know, he said it's not a million ounces. So multi-million ounces. Yeah. How much more drilling? How much more money? >> A lot. You know, I don't have a forecast on uh an estimate, I'm sorry, on the number of um number of dollars or the number of meters. Um we all have to acknowledge that drilling success kind of begets uh more drilling and and you know we are pretty early in there but this is a target that that commands a lot of attention demands not commands and will require significant uh exploration efforts on it and it it deserves it. you you're doing some of that right now or you're about to be doing that I believe um rigs on side I believe or correct me if I'm wrong but give give me the summary of what's planned there how many meters when does it start when will it be completed >> well we've only uh identified I'm sorry announced three holes at Blanco the rig is indeed on and drilling um on the first hole we will be doing two set um holes holes as well and there is an opportunity perhaps to expand that program by two or three additional holes. Uh we have budget constraints in the back of our mind and certainly want to test some of the features that we got at Arosiora as well. But having said that we want to test the other targets too. So um I'm trying to answer your question as as candidly as I can and directly. It's going to take a lot of a lot more drilling at Sro Blanco. >> What would it take for you? I mean, if it is it only budget constraints that keep you from going, you know, three to five holes or what would it take for you to actually go to five holes? >> Well, going to five holes is not a problem in our existing budget. We can do that. Um, it might take away from the drilling that we're going to do at Okodoro. Um, I' I've kind of painted myself into a little bit of a box. Um, not intentionally, and that was that I promised everybody we wouldn't do any kind of financing until we finish this drilling program. Now, I will tell you that there's a lot of pressure from people saying, "Well, I think you should do a little bit of financing just so that you can keep a rig going uh 12 months a year and not, you know, after this program shut down." So, um there's no decision made on that, but uh any finance that we would do on that would be uh would be quite modest and and we're not planning it right now. As of today, I can tell you that we intend to finish this drilling program of 10 holes uh before we entertain any type of financing. Help me better understand the strategic decision behind that move though because exploration is inherently risky. Most holes don't don't come up as discoveries in general as a general term. So why given where your price is now? I mean it's ran massively. Why not raise now? What's the strategic thinking behind not raising at this value? Like sure you could raise it maybe a little bit higher valuation on on you know a confirmation of stepout or something like that but but in terms of riskreward why raise why not raise now? >> It's a perfect question and um you know I' I've made this comment before on video but um in life you got to make sometimes you have to make decisions and well you have to make decisions and sometimes they're the right ones and sometimes they're not. the decision was made to um do this drilling program and whether it was the right decision or the wrong decision, I'm going to suggest to you that the drilling bit is going to be the arbitrer of that. So I mentioned earlier that I gave my word we wouldn't do that until the program was completed and I feel obliged to do that. >> It's nothing more than that. >> That's fair. Um, I I I respect that that you want to stand on your word essentially. How do you plan on raising capital going forward though? Are are you thinking straight equity? Will there be a warrant? Is there a possibility for JV or just a strategic raise or something like that? Yeah, talk to me about all the options there. Well, I don't think it should be a surprise to you that we've already been approached by some larger companies with, you know, JV type discussions. Um, we've also been approached by I don't know if I can count them, people saying we'd like to do a financing and and and so far uh well, we've resisted that in furtherance of what we said we're going to finish the drilling program. My number one desire is to create value per share. And so yes, I agree with you that our stock is uh has performed nicely and um that there would be a strong case for for doing a raise and right now I just feel like how do I do that after I told everybody that we would go ahead with this drilling program keeping in mind please that we do have enough money to do this drilling program >> and the the Oh so so the facility that you're providing in August that's being drawn on and and that's essentially what's pushing the company forward or is that still open right now? >> That together with the warrant money that we got in March is is fully enough to uh complete this drilling program, >> right? And then once you see what that is, then you do start thinking about or entertaining the idea of getting a a strategic in or or not. Would that be of interest to you? Well, I I I don't like to shut any doors, of course, right? That would be silly. We're not thinking about it right now because we have a little bit more work to do. >> But when the final bell tolls sometime in the future, it makes an awful lot of sense to have larger entities involved given their cost of capital compared to what our cost of capital will be. So these are, you know, they're not untypical discussions that you have about your mining projects and and yes, of course, ultimately there will be decisions made that include some of those considerations. Right now, we are not considering that. >> I would assume you'd have the same answer if I asked you about an asset level deal where you bring in someone as a as a JV partner, or is that not of interest at all? I I would have to adopt the exact same answer and and I just want to summarize it. We're just not thinking about that right now. We're thinking right now about this drilling program and and you know continuing with a a strategic way of doing things that includes all the steps that you really should take. Um we would be the first to admit that we need to do more IP. We need to continue our surface grid patterns of uh geocchem. Um the IP is an interesting one because it appears to be working. Now, everybody hears about IP and it it's a dangerous thing to follow and and history would teach you that except that our drilling so far has been has been keying on IP features, chargeability features coupled with related uh resistivity features and it seems to be working. So on the IP we shot acquired I guess is a better way to say that um there's some very interesting features not only on Sarah Blanco but also on our Goro but what's interesting is that in this first drilling program we completed earlier in the year we didn't get to our strongest IP anomaly. There were reasons for that and that was surface access which we can do but the budget didn't allow for it because it's not going to be a cheap road going through a valley. So, um, thankfully the, uh, the same, well, an IP anomaly showed up on this line we just, uh, shot here in May, acquired in May. And, um, when we test that, it will give us a good feel for whether we need to move to the northeast to test the old anomaly that was the strongest one. >> How much are you going to be stepping out in Israeling? Well, the hole that we're drilling right now is about 300 m from the hole one and hole two. There it kind of a triangulation and they're about 300 m apart. Uh the next hole that I'm just speaking of would be about 250 m north of that if we go to it. The other holes that we're going to drill are on the west side of the feature. We're interpreting it right now as a as a feature that kind of surrounds a lithocal cap that's quite obvious from surface, but it's early in the game. It's very early in our interpretation and we need some more drilling and and we really need more IP and more boots on the ground. There's first person to admit that we have to we really have to get down and dirty on IP and and Geo Cam >> and that you think is going to come on the back of having seen these results and then on the back of having financed after these results then I see >> well 100% for sure after seeing results finance you know the IP is such a small cost item you know I doubt that we'll spend more than a4 million dollar on IP in this next pass. So, you know, they're small ticket items. It's the drilling obviously that that costs an awful lot more. >> When do you think you're going to have those assays in in hand? How much time is it going to take you? And also, how do you think you're going to be announcing it? Whole by whole or all at once? >> I think we're going to announce hole by hole. Um, we don't enjoy preferential service in Chile. And as you could probably imagine with copper at five bucks and >> gold doing what it's doing, um, there's a lot of activity in the country and, uh, there's a lot of majors that are conducting multi-rig programs. They tend to get better service. So, we're finding that we can be 45 to 60 days for assays after submission. So, you know, if I was to be a uh if I was to guess, I'd say probably mid mid November to late November for athletes to start coming out. >> Now, the good news is that there would be a continuous stream of those >> as we finish holes. >> Mhm. You are dealing with a lithocal cap there. U what else or how are the drilling conditions there now? How much efficiency are you getting per day? >> Um, drilling is not too bad there. Um, we're experiencing on some days 25 to 30 m a shift, 12 12 hours. So, we could expect 50 to 60 m. It doesn't always go like that, of course, but um, yeah, it's going quite well. >> Mhm. So, I'm just trying to figure out essentially uh if you're going to be able to get all the holes or all the asses out before the end of the year. >> No, >> no, >> no. Because we'll be drilling to the end of the year, >> right? If it if if you go to the five holes, that makes sense. Uh but you're still going to have at least a couple of holes before the end of the year, though, I assume. >> Oh, for sure. I believe between the middle and the end of November, they'll start coming out as we finish holes. >> Yeah. Okay. And then dependent on that, because I essentially wanted to ask you, when do you go to Tres Amigos? Uh when do you go to some of these other targets? Is that still for this year? Um but I suppose as with most things, the answer would be it depends. >> I don't see us going to Tres Amigos or to Kabay Muerto this year. I see us drilling at Sto Blanco like we're doing right now with either between three and five holes and then I see us moving to um to Arodioro where we're going to test some IP and surface features meaning uh shallow workings about 3 and 12 to 4 kilometers north of where we've drilled already. Now, I know you're going to say that sounds ridiculous as a as a stepout. We're really testing uh what's going on in the northwest extension of the property. I I would point out that it's not like on a women of prayer. We have some very strong IP uh results and there's old workings there as well. So, um, if we're fortunate enough to get some results there, we will have well over 5 kilometers of potential strike. I mean, for me to say that it continues all the way is impossible, but but the um the potential at our is very very significant. We're getting great grades there and we'll see what happens here in this drilling program. I expect that we will be there in the beginning of December. >> Oh, that's pretty soon. Okay. Um, what talk to me maybe a little bit more and and that's we're going to go in depth on it with um Terry, but talk to me a little bit more about Tres Mikos. Why there hasn't been much drilling there to date? What's uh when's that going to change or why hasn't it been drilled either by yourself or others? What's the history there? Well, it's been mined uh by P andro type miners and we did um sample a mine face which is really like 3 m from surface. It's it it it it's truly not very much. But we did drill a hole underneath that. So I want to be clear that everybody knows that that hole was underneath where they did the workings. And we got some really great results. you know, you mentioned them earlier on, but you know, 1 and a2% copper, but then we also intersected about 5 m of I'm sorry, 6 m of 5 1/2% copper. So, um, sampling the mine face, there was about 3 m that exceeded um 14% copper. So, there's something there. Now, having said that, we just haven't had a time to we haven't gotten there yet. What's exciting about it is that there are workings there as well that extend to the river valley to the north which is about 2 km to the north. So trace amigos has the potential for being a very serious system. >> Yeah, it'll be again I'm I'm really looking forward I'm kind of scratching the surface here with you on it, but I'm really looking forward to chatting to uh Terry about it hopefully sometime soon. Um what do you think is the biggest risk or or challenge for San Lorenzo? right now in in you know in the middle of this of this process that you are I mean you don't seem worried or repressed about money geologically. You've you've come up with good results before. So what's uh what keeps you up at night? >> Well, there's only one way to answer that and that's continuing drilling results. Um we've been we've enjoyed good fortune so far. We hope that we can continue to enjoy that good fortune. But mother nature is an interesting uh an interesting uh mate or yeah um partner. So a lot of things happen and and it's just that's just the way it is, right? So and and we all know that these deposits are not continuous over kilometers and kilometers. They come, they go, they bifurcate, they swarm, they pinch, they swell. Not necessarily in the in the case of the porefree targets quite as much, but of course we'll be see we'll be looking for potassic core zones that are hopefully more copper rich. And right now we seem to be intersecting more in the higher in the higher area of that into maybe gold gold uh charge zones. So um the drilling results is really what uh and it doesn't keep me up at night by the way but it uh it's my number one thing about thinking uh that I think about. How's topography where you're drilling right now and where where you going to be moving the rig next? >> Sarah Blanco is the most challenging topography and um it there's very serious hills and valleys in that area. So that was by the way our challenge in trying to get there and prior to our building the road. Um what's good about it is that with this hill and valley and and lots of topographical relief, the potential for these um deposits to be very very near f very near surface is very real. Now we are not drilling in the valleys. We're drilling up at the hills where we can access easiest. But we would only have to step out a couple hundred meters and we would be able to drill at positions where hopefully the system would be very close to surface. >> Yeah. >> Now at at Pis Amigos for instance, it's quite it's quite easy to get down into that uh system. Um it's reasonably easy as well at Arroioro. Cabayomorto again is challenged. It's it's um a big hill feature that we really need to get to the backside of to start doing some drilling um to follow up that discovery hole. That will take a a budget because there's some significant uh terrain involved there as well. >> Mhm. Yeah. Does that does that worry you in any way? I mean, moving around the rig or or getting access to any of the ground in terms of conditions and weather and everything else around that. >> Well, let me let me address each one of those individually. Weather is never a problem. It hasn't rained there probably in 50 years. I don't know. We're at a good elevation between,400 and 2200 m. Uh so, in other words, no issues. It never snows, never rains. Uh year round access. Um, I'd jump into one more thing and that's um the infrastructure that we have at the property. We have paved roads right to it. We have high high voltage power runs right along the north end of the property as does um as does um a river and we have a couple towns that are nearby especially El Salvador which is a mining town and so all the traditional whatever you call it yellow iron that you you need is available there and there's a workforce there and another thing is that the Puerto a smelter is very nearby and it's an operation and to have something like that right there and a facility that's just north of us that is actually short of feed all of those things bode very very well for us. So to answer your question um we're not concerned about access we're not concerned about moving the rig around. Um mostly it's quite simple. some places that will not be the case, but to solve that is just a dollars issue so that we can get the right heavy equipment in there to build pads. Hopefully, I answered all of that. There might have been one other question in there that I've forgotten. >> Uh, no, you're painting the picture well here. I think you said it it's hasn't rained there in 50 years. Uh, that's actually true. Um, what about water though in that case? Where where does your water come from? Such a good question. Right. So, we all know that that's a big issue in mining. Now, there is a 48 in pipeline that runs right beside the property, but that services uh Canadelo's operation at El Salvador. Now, can we do it can we access that? Well, that remains to be seen. Um, as far as accessing river water, one shouldn't be so bold as to say that you would ever be able to do that. So, let's um uh let's table that. Now, there is an aquifer to the south of the property that um is less than 100 mters in depth and and so we've been um investigating that. Let's just say that. Uh nothing nothing to report, but um there may be access to water down south of the the property. Very very nearby, by the way. Touchy subject though, water, and it is everywhere in the world, but especially in those regions. Uh, what kind of permits or or community relations would you have to have in place in order to use something like that? >> Clearly permits from the Chilean government. >> As far as um neighboring communities, there really aren't any. Well, there's there's the two towns that I mentioned, but they're about 15 kilometers in one instance and 25 kilometers in the other, but they're mining towns. They're um most of the people that that live in those towns are engaged in the mining sector. We don't believe that there's going to be a problem when it comes to uh community relations, but then again, uh we're not a long ways along. We haven't gone a long ways down that path. uh we're still more in the exploration mode, but we feel pretty good about it because really a lot of the the Chilean economy, as you well know, is is tied to mining >> and um yeah, I I can't provide any more than that. Do do how often how much or or do you have to go and talk to them before you're exploring like if this grows to a I don't know and forwardlooking and and dreamy scenarios here but five rig program where you're drilling you know with many rigs at the same time and disturbing a lot of the environment there essentially would you have to go and and consult with the community for a larger agreement or what does that look like? The regulatory body is Cernacan which is the Chilean mining regulator. So the way it works there is you submit your plans. Um if there's a community nearby that's impacted then you would have to talk to them but there isn't one in our case. The way it works is um you submit your locations. Um they have 20 working days to provide input and if they don't u you are free to do your plan. Now up to 40 locations at one time are permitted under that scenario. >> Once you start trying to permit more than 40 locations, environmental impact assessments, etc. will be required. We have not had to do one yet and I can tell you that to date we have never had to wait the full 20 working days to get permits from Sakuman which is located in Copiao about 100 km away. So, um, it's been it's been a good relationship. We're not we're not displeased with what's happening there from a regulatory standpoint. >> Well, luckily, you're still ways away from having to disturb 40 locations, I think. Um, or maybe not. I mean, it depends on what you come up with this year. Um, yeah. What is um G& I noted is about and I understand why that is now that you and I have spoken for a bit but it's actually on the lower end for a company of your size about 50 grand a month. It's probably about as low as you're going to get for a public company. Is that going to go up for 2025 or 2026? >> No, it'll be going significantly down. Um, some of those numbers are just interest cost and uh we did have um uh we did have a a couple of legacy issues that we uh we had to deal with on um on the staffing side. Um we have very modest IR costs and um our staffing I'm sorry our salaries are very modest. We do have a um a team in Chile that is that is involves a landman and a and another geologist who um who sits rigs and does field work with us and that's what constitutes the bulk of the GNA that we you see there is our Chilean operations our our Canadian operations are if we spend over 75 grand in a year I'd be surprised Um other than interest costs of course which are crude um but um um yeah we do have a team in in Laserina Chile actually that uh is very valuable and and and just absolutely required to uh conduct an exploration program. There's um as you can imagine a lot goes on when you're going to go drilling and and a lot of support that's required for it. >> What about marketing? I've heard that as a as a criticism of of San Laurans like, "Oh, they're not, you know, they're not out there consistently." You've started doing more of that over the last year. I met you at Beaver Creek. I know you've done a couple of interviews here and there. Do you plan on spending any more money on marketing? >> No. >> Well, you know, that's a pretty direct answer. Um, >> I mean, >> we have to make sure there's a lot of people watching the story. You know, we're ready to live and die with the drill bit and and our successes and failures. So, um, do we have to get the story out? Absolutely. Uh, will there be more marketing? Yes. When I say, do we plan on spending more? Not materially more. I do intend to be at a few more of the trade type shows and uh doing presentations and such and so that will increase the budget for sure. But if it comes to big uh promotional uh programs, you know, that cost 100 or $50,000 a month and stuff like that, I we're not part of that. >> Too bad I'm not part of that either. I would like 50 grand a month. I told you that much. Um >> I shouldn't have said that number, you know. I I just hear some of the things, you know. >> It's true, though. >> Well, you know, some of the things I hear about, well, we raised this money, we better dedicate Well, whatever. I I'm just going to drop this for for here. We're just not We don't We don't do that. >> Yeah, that that's fair. And and that's how I like it. That's that's how I I approach the sector myself as well. So, what is what's the most favorite criticism of San Lorenzo you've heard so far? >> Me. >> What do you mean? [Music] Oh, you know, I I look back with uh with fondness actually of a um of a um interview that Tom Wil and um Robert Sin did about oh boy, we're going back three, four, five months and they were just kind of chuckling at us and welld deserved and they say, you know, like there's two guys and they're a little older and and What the hell? This is not what you would expect from a mining company. And they say, but at the other hand, on the other hand, this geologist knows what he's doing. So, and these old farts are are drilling intercepts. So, that you ask me a direct question. What's what's the biggest criticism? That's kind of it. you know that we don't have what would be considered a real robust capital market/mining experience team in place that you know that includes all the different positions that you would typically see. I don't want to um take away from Terry's experience. He has been involved in the mining system for a long time and is very he's he's got a lot of experience and really understands these rocks. So please don't take that answer as there's a problem with our geological side. I just think that we do need to um increase the seauite. Uh so that would be our number one criticism. >> It will be interesting to see how the company develops from here on out. Again, it was a new discovery and and um everything that comes on the back of that kind of changes the company materially and uh it's always a process of figuring it out, I think. So that's fair. Um, I know you and I are going to be talking about Salon Res over the next couple of months at least a couple of more times, including again having Terry on as well. What am I forgetting to ask you though for now for this conversation? What did you come here hoping to talk about that I failed to bring up? >> I I think you brought things up. I I mean, I I'm trying to communicate the fact that we we feel we have something special here and and that there are very large targets and lots of upside. We uh were very much on side with everyone sharing in the upside here as we've demonstrated and uh look forward. It's it's an exciting time for us between now and the end of the year with the drilling program going on. >> I remembered something that I that I have not brought up but I that I did want to bring up as someone coming in into the mining space or junior mining space from from oil and gas, you know, relatively similar but also quite different business. What are some of the things that you really dislike about our space and what are some of the things that you would change if you had a magic wand? >> Um, well, let me say that I'm in no position to uh tell anybody what to change in the mining business, so I'm not about to do that. I would point out, however, that while gas may seem different than mining, in a lot of ways, it's very similar as well. It's it's resource exploration. Yes, if you're in conventional oil for instance, um things are different because you get much more instant gratification and you can get cash flow to to um to fund your your activities for a lot of time. But then there's a lot of projects in the oil and gas sector that are not that unsimilar to mining. Like for instance, large gas projects, whether they be either on land or offshore that require significant infrastructure. That might include offshore drilling and and pipelining and all that type stuff. But it may also include that you can't export the gas, which is a a thing that's kind of going on in Canada right now. and it it requires that um LG facilities for instance be constructed. So there's a long lead time and large capital expenditure required in that as well. Another example would be heavy oil where you know massive infrastructure is typically required and um there can be a long delay between the definition of a resource and its actual production. So, I mean, really, we're looking for mother nature's uh bounty and and and in some cases, the the delay that is obvious in mining isn't that much different than the oil and gas side, although the oil gas side has the opportunity at different types of plays to to reward you quicker with cash flow. But uh really uh I think a lot of people listening or that have been in the mining and the oil and gas business would kind of smile and say, "Yeah, it's a lot the same." And once you have it in your blood, it's it's kind of there. And I I find myself in that position. >> It's been a pleasure. Um thank you so much for this introduction of San Lorenzo and thank you so much for sitting down with me today. 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High-Grade Gold & Copper in Chile | San Lorenzo Gold CEO Interview
Summary
Transcript
Today on the CEO barbecue, we'll be looking for gold and copper in the atom region of Chile together with San Lorenzo Gold. If you want a bullet point summary of this conversation and all the other CEO barbcues in your inbox once a week, go to resource.com and subscribe to our free newsletter. Now, the company you're about to hear from has paid us for the production of this video, which means that this is not research. It's an advertisement and you should treat it as such. Research is conducted by reading the company's official filings which you can find on setterplus.ca. And please only watch this if you absolutely know what you're doing. This interview is intended only for experienced junior mining speculators because mineral exploration development and mining is a very tough business where failure is the norm and should be the expectation. This is going to be a conversation that is general and impersonal in nature containing forwardlooking statements. I am not a licensed financial adviser and my business sells content producing services which also makes me biased in multiple ways. So before continuing on, please talk to an independent investment adviser with a good long-term track record because your capital might be at risk. If you're not 100% sure you understand 100% of the disclaimers I just showed you, please go to the last section of this video and do not consume this content unless you fully understand and agree with everything said therein. That said, San Lorenzo has multiple gold and copper targets on a 9,000 hector land package in the Adakama Desert, which is located, of course, in northern Chile along the Pacific coast, and it borders the Andes mountains to the east. Uh it's uh about 15 km south of Cadelo's El Salvador copper gold pfrey mine there and it's also roughly 30 km from the portra smelter. Um I'm probably butchering that name but I'm not going to pull out my best Spanish accent for this conversation. Maybe another time. The core of the current thesis for Salorenzo is uh really they have a couple of targets. So they got uh four targets that are of of Marin here that we'll talk about. But the core is essentially target number one. It's called Sarah Blanco and the company describes it as a goat rich porefree system although the jury is still out on whether this actually is a pfrey. So we'll talk about that as well. Some intercepts um came in as high as a gram per ton over 153 m in the discovery hole which is actually what brought this to my attention as well. There is a large alteration footprint at surface here and management links the intercepts um and the alteration to a deep IP chargeability which they think is a potassic alteration at depth which could be a vector to a possible free core rig on side right now positioned to test the strongest of those chargeability segments next hoping that they'll be able to find um something that's hopefully similar to El Salvador and thus containing serious scale and and we'll talk about that of course is that mineralization uh and that core too deep though and will the current drill program answer those unanswered questions is of course something I'm going to be asking about in the conversation. Target two is Arco the Oro that's an epiothermal vein corridor with higher grade gold uh being intercepted along a 1.2 km stretch of what is believed to be a 5 km trend with the most recent drilling showing 4 1/2 m of 6 1/2 g of gold and peak values of almost 18 g per ton. Target three is fittingly tres amigos which is a copper rich epiothermal system with some historic production from the oxide part of the mineralized zone and and some past drilling showing 34 m at a percent and a half copper there. And last but maybe not least target four is called cabay muerto. This is another potential pfrey target that San Lorenzo has whereund and um 22 meter interval came up with almost a gram and a half in the discovery hole. So, there's an IP ongoing here and uh some more drilling might be in order, but hopefully more about that later on in the conversation. Now, Renzo is listed as SLG on the TSX Ventures Exchange where the average 3-mon volume is about 190,000 shares. The stock's 52- week high is 79 cents and 52-we low is 5 with a market cap of just over 55 million Canadian dollars and just over 80 million shares outstanding. today. This is a 70 cent stock with a 50 and a 200 day moving average at respectively 52 and 28 cents which means the stock is now trading well above both of them and thus indicating a positive upward momentum. Moving on to the share structure, there are no warrants outstanding. There just about uh 3 million options exercisable at 16 cents per share. So the number of fully diluted shares is close to the number of the shares outstanding. We're talking 83 million here, meaning an increase of just about 3 and a half% in shares outstanding could happen if all the dilutive securities get exercised, which would then result in about a 3% ownership dilution if, and of course, always a big if, but if all dilutive securities get exercised. And of course, none of this accounts for potential dilution down the road, which is not unlikely given that this is a pre-revenue company that operates in a capital intensive industry. Talking about capital, I'll now go through their latest financial statements which shows me the numbers as of June 30, which is now almost four months ago. And at the time, the company had in total about a million Canadian dollars in current assets. It was mostly in the form of cash. In terms of liabilities, although unusual for an exploro does have some debt. Um there's on the current side of the liability side of the balance sheet, at the end of June, there was still about a million half dollars open. though notably basically all of that is due to related parties or or their note payables. Largest part is is due to lithium chilate $1 million payable which was renegotiated some 3 years ago but that is now due by the end of this year and it carries an 8% annual interest to it. There's also an insider facility converted to a term loan where essentially some debt plus advances to um I believe Al here uh were rolled into a credit facility about a year ago. So um max a million dollars 8% annually secured by GSA convertible at 20 cents for 2 years that auto convert uh once max into that again term loan here maturing on November 30 2026 but then subsequently on August 5 the same director so again I believe it's Al provided a second credit facility up to a million dollars 8% again only convertible 35 cents this time which when fully drawn uh it could autocon convert into again a term loan maturing on July 31st, 2027 with a one-year contractual hold on any conversion shares. All in all, bottom line, about $2.1 million of debt here. And uh I believe again it's a CEO who holds a part of the part of those loans. So as you can figure, not a simple situation. Hopefully I'll be able to get some more details on it later on from Al himself. Moving on to the P&L for the six months that ended on June 30. The total amount recorded as expenses for the period shows up as $315,000. So though that includes some non-cash expenses, sharebased compensation and some recreation. So the actual out of pocket cost was call it 295. It means the average cost for the period was about 50 grand a month consisting for 70% of GNA and the rest is uh the interest on the different debts and fortunately no breakdown on the GNA but I'll be asking about the way they plan on spending money in the future later on in the conversation as well. This is an exploration company. So they also spend money on drilling and geology of course, but those expenses get capitalized. So we can find some more details under note 4 in the financials where I can see that the additions for the period were $68,000. But again, unfortunately no breakdown for this either. Um although I assume a large part of this was actual drilling given that there was an ongoing drill program during this reporting period. This is where I normally provide the drilling to marketing ratio which looks at how much money a company spends on marketing versus how much they actually spend on their main business activity. But again, I don't have that breakdown right now. I do have the overall administration to exploration ratio here. That was about two and it means that twice as much money was spent on exploration as it was spent on administration or in percentage terms 66% of the money was spent on exploration. As always though, I'd like to remind you that exploration businesses can change relatively quickly. So these numbers may not be entirely representative of the current or the future situation for San Lorenzo. So go to setplus.ca and look at the numbers yourself. Now I've been referencing a conversation here, but for this to actually become a conversation, I'm going to have to shut up already and Al, I'll give you the word here. But first of all, thank you so much for sitting down with me today. >> Well, thanks for having me. Great to be here. >> Pleasure is mine. And and although this has been um a highly requested interview really for for I think over a year now, this is actually your first time on the barbecue. So we have to go through the smell test first. Starting off with yourself, what is uh who are you? What's your track record? And have you more importantly made more money for shareholders than what you've spent during your career so far? I have uh my background is oil and gas principally. Um been involved in the resource sector especially um oil and gas since about uh 1980. Uh pivoted a little bit towards the mining sector in 2009, but the the bulk of my time was on uh on oil and gas based out of Calgary. um involved in the startup of a number of junior oil and gas companies that ended up getting sold to larger entities. >> Mhm. >> Background is in engineering. Um chemical engineering, I guess, to start with. Um not so sure I practice any of that anymore, but um um I've been more in the administration side and and just resource hunting for the last um many many years. >> Mhm. Do you currently do anything else? Do you have any other executive or board positions with other companies? >> I have no other executive positions, but I do sit on a few other boards that are involved in mineral exploration. >> Does that take up any of your time or how much of your time would you guess goes towards uh San Lorenzo? >> Oh, 80% of my time goes to uh San Lorenzo. >> Okay. How much of your time goes to cycling? I think I can see a cycling a cycled tire there up in the corner. >> Oh, not a lot. A little bit, but not very much. >> Um, jokes aside, do you now that you're you're C is this is this your first time being CEO of a of an of a exploration company? So, everything before this was was oil and gas. Is this your first time in exploration? Is that right? >> Yes, it is. >> That's correct. Do do you like it essentially is what I what I ask or do you plan or or want to remain the CEO as as the company goes through again this discovery growth process here? >> Well, I've been pretty clear I think uh publicly and uh in meetings that my appointment here is a is a temporary situation. This is going to need someone with a greater skill set in the mining side than I have, which includes capital markets exposure. Um, in other words, a name that's known. Um, I'm taking this on as a labor of love and and really enjoy it and together with my partner Terry Terry Walker in Chile. And we're really having fun with this because the the property we're working on really has such great potential. But to properly answer your question, I don't see myself in this role in a year. >> That's very specific and I do do appreciate it. I think it's the oil and gas background. I think with with mining CEOs often times I would get a fiveminute answer and then I'll be like, did they answer my question? No, they didn't. So, I do appreciate the specificity there. Um, how how many shares of San Lorenzo do you own right now? And and what's the average cost that you've paid for those shares? It would take me a minute or two to think about the average cost, but um we have a substantial u position in in San Lorenzo when I say we I include Terry Walker in Chile and I also include his and my friends and family and I would expect that that amount would be very close to 40%. 40 >> and that's um so you said friends and family. So what percentage of that would be reportable? uh reportable by myself. Um it's yeah, you've got me on the spot right now because I don't exactly know that number. Um but some are held by companies that I'm involved with but not are not in control of. So um >> I'd have to look I'd have to look on C or on set a I'm sorry to answer your question properly. Really what I'm looking for here, Al, is is where I'm going with this is of course skin in the game. Um, but as I mentioned earlier, you have another layer of of of skin in in this game in San Lorenzo, and that's through the the loans that you've been providing for the company. You bank brol program essentially and again, not something typically seen in these companies and not something that's always uh looked at positively. So maybe you can talk to me about that. What are you what are your plans for this debt? Will you convert it all? Uh and and what are the timelines for those decisions? >> Well, let me go back to uh the start of it. So, we were trading at a pretty uh low share price uh 6 cents approximately 6 to 7 cents. And it's true that we didn't get the uh the story out very well. And that has changed over the last number of months, but certainly um we've been working on it for quite a few years. In fact, since 2013. And so we're kind of like one of those 12 year overnight successes I guess you would say. Um I've been funding a great amount of the expenditures in the field which of course is why my share position and Terry's in fact are reflected in the numbers that I spoke about a minute ago. But then we um we exited that malass malaise I guess you'd call it from 2012ish to 2017 18 and felt like maybe it's time to really have a look at this a little stronger and that included more and more geocam surface geocam and IP and and all the traditional exploration models including boots on the ground of course and with the benefit of moving forward. We put drills in the hole and every time we do it, it seems like we encounter alteration and mineralization and some really really great uh results. So we had a target called Sarah Blanco that we're going to speak about in a moment. I think that was rather remote. So because of our very small budget, we really didn't have the money to build the road, which we did last summer and that was 7 kilometers to access this target and then set up on a drilling program that included that target Blanco and Arodioro. And you're right, you asked, did I finance that program? Well, I did because I advanced a $1 million credit facility. Now I I just want to make sure that your viewers know that um it's important that everybody can share on in the uh in the upside here. We had a 6 cents stock price but uh made the conversion uh price 20 cents on the on the uh first facility so that everybody could enjoy a multiple uh from that position. And yeah, um, better lucky than good. I don't know what what do you say? The results worked out pretty good as you as you alluded to there earlier. And so, um, we did some IP and and some more surface, geocam, etc. over this past summer. And just recently, we've done another $1 million credit facility. The stock was trading at about 21 cents and we made that convertible at 35. But the whole point is that um shareholders would make some money before I would be in the money. Now, you know, with the benefit of hindsight, it all looks so simple, but it's not always quite so simple when you're looking forward. So, um that's what constitutes our debt. And I hope I answered your question, but yes, we um we've had some funding from myself in order to pro or avoid significant dilution, especially when we were down at the 6 to 7 range and additionally when we were at the 21cent range. I feel that uh it did the shareholders well and I'm looking forward to uh continued positive results. You asked me about that debt. Well, it's convertible and it's quite clear it's going to be converted because it's quite in the money. Clearly, the 20 conversion piece is is very much in the money and um even the 35cent conversion piece is in 100% of the money. So yeah, they're going to be uh converted and um we're looking forward to completing this next program that we're doing right now of about 10 holes with that second facility and the cash that we received from warrant exercises after the program we completed early this year. >> Well, you said you're looking forward to getting uh good results back from that drilling. What if you don't? What if what if what if results are not as good as you hoped it to be in market maybe not as happy would you be there still you know g giving loans or loan facilities to the company or are you at a point where you're like nope I'm done now >> oh that's the farthest from the case um I'm not looking for uh or anything here to other than to say this is a labor of love I'm not being paid Terry Walker's uh being paid a kind of a pittance you might say, "We're doing this cuz we love it." And and I I love the smile on Terry's face when he looks at some of the rock there and and it's great. So, am I going to be there 100%. I mean, now now let's keep in mind when I say that that there's some significance to this property and some real inherent value already. So, it goes without saying that we're going to back it. And um as it moves forward, I >> I'll table the money talk for a while here, but we'll definitely be back to it once we're talking about your plans or goals for this year. But, um back to skin in the game here. Uh you mentioned Terry and everything else uh or everybody else. Is is that is that it? I mean, it's essentially you and and and Terry who have the rest of the insider ownership or what about the other directors and who owns what? >> It's principally Terry and myself. Well, and family, friends, family and friends. >> Yeah. Yeah. Um, talking about other insiders and Terry, uh, do you or any of the other um, insiders or family or friends personally own a royalty on any of the projects you have? >> No. >> Good. That's the right answer. I like hearing that. Um >> maybe coming from oil and gas that even surprises you that I have to ask it and it surprises me as well. But I do have to ask it because sometimes it is the case. Um this is this is all about incentive essentially which I believe is one of the most important subjects in finance. But so wi with those talking about insiders how do you get incentivized? I mean, you say you don't get a pay and and it's a labor of love, but it are you going to implement a structure for insiders and executives? Is there is there going to be a bonus structure? Are there going to be KPIs implemented or something like that anytime soon? Or are you just going to keep writing it out until until, you know, a potential resolution? >> Well, let me answer that in two parts. When it comes to Terry and myself, what more incentive do we need than a large equity stake? That's what we're doing it for. we get, you know, we're going to be rewarded through our equity. Now, the second part of the answer is I already alluded to that I'm not going to be here probably in a year in the position of CEO. So, will we have to um implement a structure that includes bonuses or or other incentive uh plans to attract the right additional people into the team? Yes, of course, we will. We don't have that in place right now other than a simple stock option plan which has about 40% of what's allowable already issued. And we're we're going to wait on awarding any other options until perhaps other team members come in at the same time. That timing is subsequent to the drilling program probably that we're doing right now which we think will be between the date of this interview and so in other words mid-occtober but we'll be drilling right through to Christmas and and possibly thereafter with a short break during Christmas time. So I'm trying to really give you a good feel for um for the timing we're looking at going forward. That's fair. And we will be talking about the timing. I think this about covers my my smell test if you will. I do want to talk about what you mentioned earlier when I asked you if if you'd like to remain a CEO, but how do you see the future of the company given the context of there being again four targets here and um not just the one? I mean, are you looking to make a discovery at SE or grow the discovery at Sarah Blanco and sell the company eventually or would you want to only sell that target, make other discoveries? Yeah. What's what's the real goal here? >> Well, to look that far forward is going to be very difficult. Um, our goal is to make discoveries um really create value. Um, we believe we have something special in Salvador. We really do. There's uh four targets as you as you mentioned, but they're not, you know, tiny little things. Um we're we're searching for uh some very significant um accumulations. These are big targets. We're early in the game admittedly as far as our exploration goes, but I would point out that all of the drilling on the property has been done by us. We're not recycling old holes or anything like that. We're the ones that have done the IP and and the boots on the ground geocam and and the drilling. So, it's an exciting time. And when you've got lots of excitement, it it's not like you're planning that far down the road. I'm trying to be candid with the not going to be here in a year in a CEO position. Um I think every shareholder would be relieved to for to hear me say well let's get a name that's quite well known in the capital markets and in the mining space itself and um bring this to the next step. That's about as far forward as we've gone. Other than to know that this property can support an awful lot more than what of exploration I mean than what's going on right now. An awful awful lot more. >> This is actually a good point to do indeed talk about the star of the show here essentially your flagship target Sarah Blanco which is a relatively new discovery. But how come actually how come nobody discovered it before you did? What's the history here and and why was it on the market when you picked it up in the first place? >> Well, it's been a long process of uh picking it up. By the way, we started in 2012. So, um it was a smaller property package at the time and we've been adding to that property package over this last 12 13 years uh to where it is right now. Um you know, we get asked that question or I've been asked that question the oil and gas side a lot. Well, if it's this good, why didn't somebody else do it? Well, you really, you know, you could say that probably about every project in the world, you know. So, um, it's in a great jurisdiction. Um, I would point out that there was quite a malaise in the mining business, you know, between 2012 for the next 5 to 7 years and we took advantage of that period of time. So, uh, we feel very good with the position that we have now. And um then again, you can always do the serendipity comment and say, you know, better lucky than good when you get your land position. And uh that seems to be working out as well. >> Mhm. How big could this potential deposit get? What's your target size? Because you mentioned always that it's going to be you're not chasing after small things here. That's what you like saying. So yeah, how big does it have to be um to make that strategy or goal happen? Well, before I answer that, I'd like to just take one quick step back. You mentioned that the star of the show is Sarah Blanco at Salvadora. I'm not so sure about that. I personally love Arcodoro. um we believe that we have a very significant resource there already but I want to make sure that I I very clear here that that's not a 43101 compliant comment but parallel we'll talk about in a bit in a minute I'm sure but parallel and intersecting hydro um uh vein systems hydrothermal vein systems that epiothermal in nature that um appear to continue for well over 5 km. And you might say, well, how do you know that? Well, we have an an additional exploration tool, and that is surface workings along the trend that have been going on. They haven't been going on over the last few decades, but but pick and arrows over the over the years, and and we've done quite a bit of IP across there and and very significant targets of IP across there as well. So, um, I'll stop it there because I'm sure we'll go into it a bit, but that really attracts me as well, Aroro. And very candidly, so does Kabay Muerto and so does Tesos. So, um, yes, a lot of people are all over Sarah Blanco saying that's the one you got to go after. You asked me a specific question. How big does it have to be? Well, we're not targeting a million ounces. Now, what's this all going to look like at the end of the day? Let's just keep in mind that just to the north in a very similar geological setting, a caldera collapse zone, um the El Salvador mine has produced 24 billion pounds of copper and well over 5 million ounces of gold. I think more than like six. And I mean, how big does it have to be? Well, we're not looking for a million ounces. We're looking for an awful awful lot more than that. Having said that, we're early in the game. >> That's almost an answer, I suppose. I was really looking for you to say, I want 5 million ounces. I'm going to have it there by 3 years. Um, but I I I I understand that's not something you can go ahead and and and say or claim like that. Um just before we continue on with >> I think I probably could at our kudoro but it's subject to um it's subject to drilling success of course but um I'm not trying to obey the question. It's just it's too early to be able to say that it it's a big target. >> What just before we continue on with what's zero? What's your favorite target? Which of the four would you if you had to drop all of them and only keep one which would you keep? Maya, I sure wouldn't want to do that. In other words, that's not a question I I I'm in a position to answer. Um, we're fortunate that we hold those land pos that land position on all those targets. And the truth is that we have one or two other targets that um have not been drilled yet that look very um interesting from surface geocam from IP. But um yeah, you know what's interesting is that when you talk to people about Salvador, some of them really like um Sento Blanco and then some of them really like Ardodoro and then there's a few people say, you know, that's a sleeper there that could buy a muerto that's probably a deposit already. I can't say that, right? I mean, we all know that, but u it's so intriguing. There's multiple events have happened here and it it's just um it's a special special opportunity to Salvador. [Music] >> Well, maybe I'll ask Terry that question once I speak to him next time, what his favorite target is. Um back to Sarah Blanco because that's where the drilling um has or is taking place. How much more drilling do you think and how much more money do you think you'll have to spend on drilling before you can prove up that critical scale whatever it might be? You know, he said it's not a million ounces. So multi-million ounces. Yeah. How much more drilling? How much more money? >> A lot. You know, I don't have a forecast on uh an estimate, I'm sorry, on the number of um number of dollars or the number of meters. Um we all have to acknowledge that drilling success kind of begets uh more drilling and and you know we are pretty early in there but this is a target that that commands a lot of attention demands not commands and will require significant uh exploration efforts on it and it it deserves it. you you're doing some of that right now or you're about to be doing that I believe um rigs on side I believe or correct me if I'm wrong but give give me the summary of what's planned there how many meters when does it start when will it be completed >> well we've only uh identified I'm sorry announced three holes at Blanco the rig is indeed on and drilling um on the first hole we will be doing two set um holes holes as well and there is an opportunity perhaps to expand that program by two or three additional holes. Uh we have budget constraints in the back of our mind and certainly want to test some of the features that we got at Arosiora as well. But having said that we want to test the other targets too. So um I'm trying to answer your question as as candidly as I can and directly. It's going to take a lot of a lot more drilling at Sro Blanco. >> What would it take for you? I mean, if it is it only budget constraints that keep you from going, you know, three to five holes or what would it take for you to actually go to five holes? >> Well, going to five holes is not a problem in our existing budget. We can do that. Um, it might take away from the drilling that we're going to do at Okodoro. Um, I' I've kind of painted myself into a little bit of a box. Um, not intentionally, and that was that I promised everybody we wouldn't do any kind of financing until we finish this drilling program. Now, I will tell you that there's a lot of pressure from people saying, "Well, I think you should do a little bit of financing just so that you can keep a rig going uh 12 months a year and not, you know, after this program shut down." So, um there's no decision made on that, but uh any finance that we would do on that would be uh would be quite modest and and we're not planning it right now. As of today, I can tell you that we intend to finish this drilling program of 10 holes uh before we entertain any type of financing. Help me better understand the strategic decision behind that move though because exploration is inherently risky. Most holes don't don't come up as discoveries in general as a general term. So why given where your price is now? I mean it's ran massively. Why not raise now? What's the strategic thinking behind not raising at this value? Like sure you could raise it maybe a little bit higher valuation on on you know a confirmation of stepout or something like that but but in terms of riskreward why raise why not raise now? >> It's a perfect question and um you know I' I've made this comment before on video but um in life you got to make sometimes you have to make decisions and well you have to make decisions and sometimes they're the right ones and sometimes they're not. the decision was made to um do this drilling program and whether it was the right decision or the wrong decision, I'm going to suggest to you that the drilling bit is going to be the arbitrer of that. So I mentioned earlier that I gave my word we wouldn't do that until the program was completed and I feel obliged to do that. >> It's nothing more than that. >> That's fair. Um, I I I respect that that you want to stand on your word essentially. How do you plan on raising capital going forward though? Are are you thinking straight equity? Will there be a warrant? Is there a possibility for JV or just a strategic raise or something like that? Yeah, talk to me about all the options there. Well, I don't think it should be a surprise to you that we've already been approached by some larger companies with, you know, JV type discussions. Um, we've also been approached by I don't know if I can count them, people saying we'd like to do a financing and and and so far uh well, we've resisted that in furtherance of what we said we're going to finish the drilling program. My number one desire is to create value per share. And so yes, I agree with you that our stock is uh has performed nicely and um that there would be a strong case for for doing a raise and right now I just feel like how do I do that after I told everybody that we would go ahead with this drilling program keeping in mind please that we do have enough money to do this drilling program >> and the the Oh so so the facility that you're providing in August that's being drawn on and and that's essentially what's pushing the company forward or is that still open right now? >> That together with the warrant money that we got in March is is fully enough to uh complete this drilling program, >> right? And then once you see what that is, then you do start thinking about or entertaining the idea of getting a a strategic in or or not. Would that be of interest to you? Well, I I I don't like to shut any doors, of course, right? That would be silly. We're not thinking about it right now because we have a little bit more work to do. >> But when the final bell tolls sometime in the future, it makes an awful lot of sense to have larger entities involved given their cost of capital compared to what our cost of capital will be. So these are, you know, they're not untypical discussions that you have about your mining projects and and yes, of course, ultimately there will be decisions made that include some of those considerations. Right now, we are not considering that. >> I would assume you'd have the same answer if I asked you about an asset level deal where you bring in someone as a as a JV partner, or is that not of interest at all? I I would have to adopt the exact same answer and and I just want to summarize it. We're just not thinking about that right now. We're thinking right now about this drilling program and and you know continuing with a a strategic way of doing things that includes all the steps that you really should take. Um we would be the first to admit that we need to do more IP. We need to continue our surface grid patterns of uh geocchem. Um the IP is an interesting one because it appears to be working. Now, everybody hears about IP and it it's a dangerous thing to follow and and history would teach you that except that our drilling so far has been has been keying on IP features, chargeability features coupled with related uh resistivity features and it seems to be working. So on the IP we shot acquired I guess is a better way to say that um there's some very interesting features not only on Sarah Blanco but also on our Goro but what's interesting is that in this first drilling program we completed earlier in the year we didn't get to our strongest IP anomaly. There were reasons for that and that was surface access which we can do but the budget didn't allow for it because it's not going to be a cheap road going through a valley. So, um, thankfully the, uh, the same, well, an IP anomaly showed up on this line we just, uh, shot here in May, acquired in May. And, um, when we test that, it will give us a good feel for whether we need to move to the northeast to test the old anomaly that was the strongest one. >> How much are you going to be stepping out in Israeling? Well, the hole that we're drilling right now is about 300 m from the hole one and hole two. There it kind of a triangulation and they're about 300 m apart. Uh the next hole that I'm just speaking of would be about 250 m north of that if we go to it. The other holes that we're going to drill are on the west side of the feature. We're interpreting it right now as a as a feature that kind of surrounds a lithocal cap that's quite obvious from surface, but it's early in the game. It's very early in our interpretation and we need some more drilling and and we really need more IP and more boots on the ground. There's first person to admit that we have to we really have to get down and dirty on IP and and Geo Cam >> and that you think is going to come on the back of having seen these results and then on the back of having financed after these results then I see >> well 100% for sure after seeing results finance you know the IP is such a small cost item you know I doubt that we'll spend more than a4 million dollar on IP in this next pass. So, you know, they're small ticket items. It's the drilling obviously that that costs an awful lot more. >> When do you think you're going to have those assays in in hand? How much time is it going to take you? And also, how do you think you're going to be announcing it? Whole by whole or all at once? >> I think we're going to announce hole by hole. Um, we don't enjoy preferential service in Chile. And as you could probably imagine with copper at five bucks and >> gold doing what it's doing, um, there's a lot of activity in the country and, uh, there's a lot of majors that are conducting multi-rig programs. They tend to get better service. So, we're finding that we can be 45 to 60 days for assays after submission. So, you know, if I was to be a uh if I was to guess, I'd say probably mid mid November to late November for athletes to start coming out. >> Now, the good news is that there would be a continuous stream of those >> as we finish holes. >> Mhm. You are dealing with a lithocal cap there. U what else or how are the drilling conditions there now? How much efficiency are you getting per day? >> Um, drilling is not too bad there. Um, we're experiencing on some days 25 to 30 m a shift, 12 12 hours. So, we could expect 50 to 60 m. It doesn't always go like that, of course, but um, yeah, it's going quite well. >> Mhm. So, I'm just trying to figure out essentially uh if you're going to be able to get all the holes or all the asses out before the end of the year. >> No, >> no, >> no. Because we'll be drilling to the end of the year, >> right? If it if if you go to the five holes, that makes sense. Uh but you're still going to have at least a couple of holes before the end of the year, though, I assume. >> Oh, for sure. I believe between the middle and the end of November, they'll start coming out as we finish holes. >> Yeah. Okay. And then dependent on that, because I essentially wanted to ask you, when do you go to Tres Amigos? Uh when do you go to some of these other targets? Is that still for this year? Um but I suppose as with most things, the answer would be it depends. >> I don't see us going to Tres Amigos or to Kabay Muerto this year. I see us drilling at Sto Blanco like we're doing right now with either between three and five holes and then I see us moving to um to Arodioro where we're going to test some IP and surface features meaning uh shallow workings about 3 and 12 to 4 kilometers north of where we've drilled already. Now, I know you're going to say that sounds ridiculous as a as a stepout. We're really testing uh what's going on in the northwest extension of the property. I I would point out that it's not like on a women of prayer. We have some very strong IP uh results and there's old workings there as well. So, um, if we're fortunate enough to get some results there, we will have well over 5 kilometers of potential strike. I mean, for me to say that it continues all the way is impossible, but but the um the potential at our is very very significant. We're getting great grades there and we'll see what happens here in this drilling program. I expect that we will be there in the beginning of December. >> Oh, that's pretty soon. Okay. Um, what talk to me maybe a little bit more and and that's we're going to go in depth on it with um Terry, but talk to me a little bit more about Tres Mikos. Why there hasn't been much drilling there to date? What's uh when's that going to change or why hasn't it been drilled either by yourself or others? What's the history there? Well, it's been mined uh by P andro type miners and we did um sample a mine face which is really like 3 m from surface. It's it it it it's truly not very much. But we did drill a hole underneath that. So I want to be clear that everybody knows that that hole was underneath where they did the workings. And we got some really great results. you know, you mentioned them earlier on, but you know, 1 and a2% copper, but then we also intersected about 5 m of I'm sorry, 6 m of 5 1/2% copper. So, um, sampling the mine face, there was about 3 m that exceeded um 14% copper. So, there's something there. Now, having said that, we just haven't had a time to we haven't gotten there yet. What's exciting about it is that there are workings there as well that extend to the river valley to the north which is about 2 km to the north. So trace amigos has the potential for being a very serious system. >> Yeah, it'll be again I'm I'm really looking forward I'm kind of scratching the surface here with you on it, but I'm really looking forward to chatting to uh Terry about it hopefully sometime soon. Um what do you think is the biggest risk or or challenge for San Lorenzo? right now in in you know in the middle of this of this process that you are I mean you don't seem worried or repressed about money geologically. You've you've come up with good results before. So what's uh what keeps you up at night? >> Well, there's only one way to answer that and that's continuing drilling results. Um we've been we've enjoyed good fortune so far. We hope that we can continue to enjoy that good fortune. But mother nature is an interesting uh an interesting uh mate or yeah um partner. So a lot of things happen and and it's just that's just the way it is, right? So and and we all know that these deposits are not continuous over kilometers and kilometers. They come, they go, they bifurcate, they swarm, they pinch, they swell. Not necessarily in the in the case of the porefree targets quite as much, but of course we'll be see we'll be looking for potassic core zones that are hopefully more copper rich. And right now we seem to be intersecting more in the higher in the higher area of that into maybe gold gold uh charge zones. So um the drilling results is really what uh and it doesn't keep me up at night by the way but it uh it's my number one thing about thinking uh that I think about. How's topography where you're drilling right now and where where you going to be moving the rig next? >> Sarah Blanco is the most challenging topography and um it there's very serious hills and valleys in that area. So that was by the way our challenge in trying to get there and prior to our building the road. Um what's good about it is that with this hill and valley and and lots of topographical relief, the potential for these um deposits to be very very near f very near surface is very real. Now we are not drilling in the valleys. We're drilling up at the hills where we can access easiest. But we would only have to step out a couple hundred meters and we would be able to drill at positions where hopefully the system would be very close to surface. >> Yeah. >> Now at at Pis Amigos for instance, it's quite it's quite easy to get down into that uh system. Um it's reasonably easy as well at Arroioro. Cabayomorto again is challenged. It's it's um a big hill feature that we really need to get to the backside of to start doing some drilling um to follow up that discovery hole. That will take a a budget because there's some significant uh terrain involved there as well. >> Mhm. Yeah. Does that does that worry you in any way? I mean, moving around the rig or or getting access to any of the ground in terms of conditions and weather and everything else around that. >> Well, let me let me address each one of those individually. Weather is never a problem. It hasn't rained there probably in 50 years. I don't know. We're at a good elevation between,400 and 2200 m. Uh so, in other words, no issues. It never snows, never rains. Uh year round access. Um, I'd jump into one more thing and that's um the infrastructure that we have at the property. We have paved roads right to it. We have high high voltage power runs right along the north end of the property as does um as does um a river and we have a couple towns that are nearby especially El Salvador which is a mining town and so all the traditional whatever you call it yellow iron that you you need is available there and there's a workforce there and another thing is that the Puerto a smelter is very nearby and it's an operation and to have something like that right there and a facility that's just north of us that is actually short of feed all of those things bode very very well for us. So to answer your question um we're not concerned about access we're not concerned about moving the rig around. Um mostly it's quite simple. some places that will not be the case, but to solve that is just a dollars issue so that we can get the right heavy equipment in there to build pads. Hopefully, I answered all of that. There might have been one other question in there that I've forgotten. >> Uh, no, you're painting the picture well here. I think you said it it's hasn't rained there in 50 years. Uh, that's actually true. Um, what about water though in that case? Where where does your water come from? Such a good question. Right. So, we all know that that's a big issue in mining. Now, there is a 48 in pipeline that runs right beside the property, but that services uh Canadelo's operation at El Salvador. Now, can we do it can we access that? Well, that remains to be seen. Um, as far as accessing river water, one shouldn't be so bold as to say that you would ever be able to do that. So, let's um uh let's table that. Now, there is an aquifer to the south of the property that um is less than 100 mters in depth and and so we've been um investigating that. Let's just say that. Uh nothing nothing to report, but um there may be access to water down south of the the property. Very very nearby, by the way. Touchy subject though, water, and it is everywhere in the world, but especially in those regions. Uh, what kind of permits or or community relations would you have to have in place in order to use something like that? >> Clearly permits from the Chilean government. >> As far as um neighboring communities, there really aren't any. Well, there's there's the two towns that I mentioned, but they're about 15 kilometers in one instance and 25 kilometers in the other, but they're mining towns. They're um most of the people that that live in those towns are engaged in the mining sector. We don't believe that there's going to be a problem when it comes to uh community relations, but then again, uh we're not a long ways along. We haven't gone a long ways down that path. uh we're still more in the exploration mode, but we feel pretty good about it because really a lot of the the Chilean economy, as you well know, is is tied to mining >> and um yeah, I I can't provide any more than that. Do do how often how much or or do you have to go and talk to them before you're exploring like if this grows to a I don't know and forwardlooking and and dreamy scenarios here but five rig program where you're drilling you know with many rigs at the same time and disturbing a lot of the environment there essentially would you have to go and and consult with the community for a larger agreement or what does that look like? The regulatory body is Cernacan which is the Chilean mining regulator. So the way it works there is you submit your plans. Um if there's a community nearby that's impacted then you would have to talk to them but there isn't one in our case. The way it works is um you submit your locations. Um they have 20 working days to provide input and if they don't u you are free to do your plan. Now up to 40 locations at one time are permitted under that scenario. >> Once you start trying to permit more than 40 locations, environmental impact assessments, etc. will be required. We have not had to do one yet and I can tell you that to date we have never had to wait the full 20 working days to get permits from Sakuman which is located in Copiao about 100 km away. So, um, it's been it's been a good relationship. We're not we're not displeased with what's happening there from a regulatory standpoint. >> Well, luckily, you're still ways away from having to disturb 40 locations, I think. Um, or maybe not. I mean, it depends on what you come up with this year. Um, yeah. What is um G& I noted is about and I understand why that is now that you and I have spoken for a bit but it's actually on the lower end for a company of your size about 50 grand a month. It's probably about as low as you're going to get for a public company. Is that going to go up for 2025 or 2026? >> No, it'll be going significantly down. Um, some of those numbers are just interest cost and uh we did have um uh we did have a a couple of legacy issues that we uh we had to deal with on um on the staffing side. Um we have very modest IR costs and um our staffing I'm sorry our salaries are very modest. We do have a um a team in Chile that is that is involves a landman and a and another geologist who um who sits rigs and does field work with us and that's what constitutes the bulk of the GNA that we you see there is our Chilean operations our our Canadian operations are if we spend over 75 grand in a year I'd be surprised Um other than interest costs of course which are crude um but um um yeah we do have a team in in Laserina Chile actually that uh is very valuable and and and just absolutely required to uh conduct an exploration program. There's um as you can imagine a lot goes on when you're going to go drilling and and a lot of support that's required for it. >> What about marketing? I've heard that as a as a criticism of of San Laurans like, "Oh, they're not, you know, they're not out there consistently." You've started doing more of that over the last year. I met you at Beaver Creek. I know you've done a couple of interviews here and there. Do you plan on spending any more money on marketing? >> No. >> Well, you know, that's a pretty direct answer. Um, >> I mean, >> we have to make sure there's a lot of people watching the story. You know, we're ready to live and die with the drill bit and and our successes and failures. So, um, do we have to get the story out? Absolutely. Uh, will there be more marketing? Yes. When I say, do we plan on spending more? Not materially more. I do intend to be at a few more of the trade type shows and uh doing presentations and such and so that will increase the budget for sure. But if it comes to big uh promotional uh programs, you know, that cost 100 or $50,000 a month and stuff like that, I we're not part of that. >> Too bad I'm not part of that either. I would like 50 grand a month. I told you that much. Um >> I shouldn't have said that number, you know. I I just hear some of the things, you know. >> It's true, though. >> Well, you know, some of the things I hear about, well, we raised this money, we better dedicate Well, whatever. I I'm just going to drop this for for here. We're just not We don't We don't do that. >> Yeah, that that's fair. And and that's how I like it. That's that's how I I approach the sector myself as well. So, what is what's the most favorite criticism of San Lorenzo you've heard so far? >> Me. >> What do you mean? [Music] Oh, you know, I I look back with uh with fondness actually of a um of a um interview that Tom Wil and um Robert Sin did about oh boy, we're going back three, four, five months and they were just kind of chuckling at us and welld deserved and they say, you know, like there's two guys and they're a little older and and What the hell? This is not what you would expect from a mining company. And they say, but at the other hand, on the other hand, this geologist knows what he's doing. So, and these old farts are are drilling intercepts. So, that you ask me a direct question. What's what's the biggest criticism? That's kind of it. you know that we don't have what would be considered a real robust capital market/mining experience team in place that you know that includes all the different positions that you would typically see. I don't want to um take away from Terry's experience. He has been involved in the mining system for a long time and is very he's he's got a lot of experience and really understands these rocks. So please don't take that answer as there's a problem with our geological side. I just think that we do need to um increase the seauite. Uh so that would be our number one criticism. >> It will be interesting to see how the company develops from here on out. Again, it was a new discovery and and um everything that comes on the back of that kind of changes the company materially and uh it's always a process of figuring it out, I think. So that's fair. Um, I know you and I are going to be talking about Salon Res over the next couple of months at least a couple of more times, including again having Terry on as well. What am I forgetting to ask you though for now for this conversation? What did you come here hoping to talk about that I failed to bring up? >> I I think you brought things up. I I mean, I I'm trying to communicate the fact that we we feel we have something special here and and that there are very large targets and lots of upside. We uh were very much on side with everyone sharing in the upside here as we've demonstrated and uh look forward. It's it's an exciting time for us between now and the end of the year with the drilling program going on. >> I remembered something that I that I have not brought up but I that I did want to bring up as someone coming in into the mining space or junior mining space from from oil and gas, you know, relatively similar but also quite different business. What are some of the things that you really dislike about our space and what are some of the things that you would change if you had a magic wand? >> Um, well, let me say that I'm in no position to uh tell anybody what to change in the mining business, so I'm not about to do that. I would point out, however, that while gas may seem different than mining, in a lot of ways, it's very similar as well. It's it's resource exploration. Yes, if you're in conventional oil for instance, um things are different because you get much more instant gratification and you can get cash flow to to um to fund your your activities for a lot of time. But then there's a lot of projects in the oil and gas sector that are not that unsimilar to mining. Like for instance, large gas projects, whether they be either on land or offshore that require significant infrastructure. That might include offshore drilling and and pipelining and all that type stuff. But it may also include that you can't export the gas, which is a a thing that's kind of going on in Canada right now. and it it requires that um LG facilities for instance be constructed. So there's a long lead time and large capital expenditure required in that as well. Another example would be heavy oil where you know massive infrastructure is typically required and um there can be a long delay between the definition of a resource and its actual production. So, I mean, really, we're looking for mother nature's uh bounty and and and in some cases, the the delay that is obvious in mining isn't that much different than the oil and gas side, although the oil gas side has the opportunity at different types of plays to to reward you quicker with cash flow. But uh really uh I think a lot of people listening or that have been in the mining and the oil and gas business would kind of smile and say, "Yeah, it's a lot the same." And once you have it in your blood, it's it's kind of there. And I I find myself in that position. >> It's been a pleasure. Um thank you so much for this introduction of San Lorenzo and thank you so much for sitting down with me today. I'm looking forward to our next conversation. >> I thought it was great and I really appreciate you having me. Thanks very much. And as always, thanks to everyone for watching Resource Talks. I have a couple of more things to say, though. The fact that this company was interviewed here today does not mean that they're necessarily a good or a bad company. I'm not here to endorse nor attack anyone. I am simply here to ask some questions. If you find that I have failed in asking a question that you would have liked to hear an answer to, which will happen as I'm not an experienced interviewer, please let me know and I will try to correct that mistake in a future interview. As mentioned at the beginning, please understand that mineral exploration and development is an extremely risky business. Losing money is the norm and should be the expectation. 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