Maurice Jackson: Joining us for conversation is Judson Culter, the CEO of Rover Metals Corp. (ROVR:TSX.V; ROVMF:OTCQB).
It's a pleasure to speak with you today, sir, as Rover Metals has several updates to provide shareholders. Before we begin, please introduce us to Rover Metals and the opportunity the company presents to the market.
Judson Culter: We are a precious metals company, gold specifically, in geo-politically safe Canada. At least we hope we stay politically safe; so far so good. And we're at the exploration stage of a mining resource and one of the best stages really to get involved in a mining company as an investor.
Maurice Jackson: When we last spoke Rover metals was working on finalizing finance, road access and working on commencing a drill program targeting 12 areas. Let's begin with the finance that was conducted in early January. Mr. Culter, please provide the details of the finance and how the funds will be allocated.
Judson Culter: Rover Metals is coming off wonderful drill results and we'll get into that, but we were the 11th best drill hole in the country in 2020. So coming off of those screaming drill results we had two strategic investors, which I've known for a couple of years, come in. Early January I fired up my emails and there was a late Christmas present where there was an order for a million dollars at 10 cents. So we're happy to take that order off the board.
We closed that the third week in January for a total of $1.3 million at 10 cents. At the time we were trading at 12 cents. The use of proceeds are going to be earmarked for G&A, marketing and building out our internal team. Now that we know we've got a company maker in terms of the resource, I went ahead and hired our first full-time investor relations marketing communications professional with 15 years of experience. And also some of that use of proceeds is going towards infrastructure, upgrades and logistics for our core project. Some of the access trails are 30 years old so re-cutting the access roads on the property and opening up the drill targets that we finally get to here in the spring and summer.
Maurice Jackson: I see that you've reduced some of your costs on infrastructure and you've also received a new permit on the Cabin Lake; what can you share with us?
Judson Culter: That is correct. Obtaining that permit was a big win for Rover, as it is a First Nations permit. The permit was the result of two years of negotiating and working with the Tlicho First Nation up in northern Canada. They've given us a three-kilometer road across their land and what that does is it gives us road access to our project off of a major highway system. And that's a 35% decrease in expiration costs, it's a huge win.
Maurice Jackson: Absolutely. Now onto the fun stuff and that is drilling. Remind audience members of some of the highlights from the 2020 campaign.
Judson Culter: Well, I will just discuss our most exciting drill hole, I know we are limited on time, but our eighth hole was 32 meters 14 grams per ton gold. If you recall, Maurice, when you were preparing a video for Rover Metals before that drill program, the very first opening bullet on the video was "14 grams per ton historical," well, we sure hit the nail on that head, right?
Maurice Jackson: Absolutely.
Judson Culter: Our Q4 drill programwas one of many demonstrations of our proof of concept, and the hole that I am referring to was way longer than any of the historical intersects. All the historical high grade at the project was about 15 meters. We went in and doubled the length at 32 meters. After that we've been focused on regrouping, comparing ourselves to our competitors, and having more marketing research tools now in-house. We went and we ranked ourselves against all other Canadian mid-tiers or small-cap juniors. And that was the 11th best drill hole of all juniors in Canada for 2020, so not too shabby.
Maurice Jackson: Now you're on the second phase of the drill program per se and that's going to be I think Rovers defined 12 new areas, is that correct?
Judson Culter: That's correct. 12 targets may sound like a lot, perhaps, but another operational update is that aside from that access road, we've got enough street cred now to get a drilling company to build us a custom drill and essentially give us an annual lease standby rate. The drill will remain on the property. That is going to another approximate 35% reduction in exploration costs and allowing us to follow those 12 additional targets, two of which are what I would call brownfields targets that have got the sulfides in them, which is really what is the associated mineral with our gold.
Rover also completed a big geochemistry study in February and correlated the results with the historical drilling on the project, where there were high sulfides. And so we've got new drill targets 400 meters to the north of where we just drilled. That's where we've seen in the historicals that there's potential to show another ore shoot. And then another 500 meters northeast of where we just drilled, that's another highly sulphurized historical target. And so of the 12 targets, those are the two that we're going to go to first in terms of new targets.
Maurice Jackson: To confirm drilling begins next week, is that correct?
Judson Culter: No, nt at the present. Rover is getting the drill rig to site. We're going to have it to sit at the Beaver zone, which is the first target zone, and then we're going to raise another quick financing. The goal with this program is now that we've got the cost reduction is to get in there and bring more meters to market. The market wants to see results so when we start drilling again it's 2,000 to3,000-meter time. We're going for a bigger program and that may sound still like a small number to some, but we're only a CA$7 million market cap company; we're just getting started here. So on the high end, some companies that are backed by Sprott they're doing a hundred thousand meters. We'd like to be that company but you're not going to be able to get into those other deals at 12, 15 cents either.
Maurice Jackson: Absolutely, and in an ideal picture here when would you expect to have results?
Judson Culter: We are trying to get ahead of companies that drill in the summertime. Fortunately, we still have plenty of time to get there as long as we start drilling, start pulling our core around the May timeframe. We're still ahead of that summer rush. So the Golden Triangles of the world, the northern Ontarios, the northern Quebecs, Rover is still well ahead of that curve in terms of a bottleneck for drill results so we're still in really good shape.
Maurice Jackson: Leaving the Cabin Lake project, let's look at some numbers. Rover is looking to release an Inferred resource in 2021 where the current gold price is $1,700. How does that impact the share price market valuation?
Judson Culter: I believe that a $1,700 gold price is a pretty conservative benchmark but you can use that as a benchmark. I just encourage readers to look at the 12-month historical average of the gold price, as well as the five-year forecast, which is over $2,000 an ounce. Let's just say for an in-ground Inferred resource what we currently have, which is approximately 100,000 oz of gold, we'll just say the value of an in-ground ounce is $115 US convert that into Canadian dollars.
That would suggest that we are should be a $15 million market cap. Rover Metals is currently a $7 million Canadian market cap so that's roughly a 200% return if we were to take what we have put into a resource and publish that today at $1,700 bucks an ounce, we feel that we are an undervalued stock based on that analysis. Our goal is to get to the 200,000 ounces plus by the end of the summer and do better, hopefully, beat that goal by the end of the year. But just on a forecast of comparables, if we were to bring 165,000 ounces to an Inferred category here at the end of this next drill program that would suggest that we are a 30+ cent stock at that point. We have a lot of positive momentum, and a lot of tailwinds for us right now as we head fully intend to meet those objectives.
Maurice Jackson: Sticking with numbers, Mr. Culter, please provide us with an update on the capital structure for Rover Metals.
Judson Culter: Rover Metals has 90 million shares outstanding. Our new internal investor relations hire compensation is roughly structured around pushing our warrants that are at 12 cents into the money. And that'd be about $3 million in warrants exercises. That would self-finance the exploration here as well. So we're also attacking that financing strategy currently. So 90 million out pre warrants; with warrants, we have about 20 million warrants at 12 cents.
Maurice Jackson: I see that Rover has expanded into new capital markets as the company has a new listing on the Frankfurt stock exchange. What is the symbol and what would you like to say to current and prospective shareholders?
Judson Culter: The symbol on the Frankfurt is 4XO. The aforementioned finance conducted in January was comprised of strategic investors for $1 million were from Europe. I should say that was a million dollars hard, and their incentive is to help drive the awareness of Rover, in Europe, in the German market, through the Frankfurt listing.
Maurice Jackson: Any final words for shareholders, sir?
Judson Culter: I believe that February was the bottom for the gold stocks on their recent selloffs. Gold is inching its way back up and for this year. The U.S. approved $1.9 trillion in stimulus, that's got to be good for gold.
Maurice Jackson: I'm not a recipient of the checks, but I own gold and gold juniors as a hedge to government theft and financial ignorance. Sir, what keeps you up at night that we don't know about?
Judson Culter: Not right now. We're having fun, we're not stressed out. We're just really working hard every day. I got from our new IR guy here in the office with me, we've got great marketing strategy starting the next 30 days, some big programs kicking off and, yeah, I think also just the lifecycle of us as who we are as the management team and this company is, it's getting that just moving out of that startup stage and this is a real growth year for us and we're enjoying it so, nothing's keeping me up at night right now, Maurice, I'm sorry.
Maurice Jackson: Last question, sir, what did I forget to ask?
Judson Culter: I believe that we have covered it for today. Our near-term focus will be on determining the best time to conduct our next financing. It's always about timing. Right now we have some flexibility in terms of the exact date.
Maurice Jackson: Mr. Culter, if investors want to get more information about Rover Metals, please share the contact information.
Judson Culter: www.RoverMetals.com
Maurice Jackson: Looking forward to seeing that, sir. Mr. Culter, thank you for joining us today wishing you and Rover metals, the absolute best sir.
And as a reminder, I am licensed representative to buy and sell precious metals through Miles Franklin Precious Metals Investments, where have several options to expand your precious metals portfolio, from physical delivery of gold, silver, platinum palladium, and rhodium, to offshore depositories and precious metals IRAs. Give me a call at 855.505.1900 or you may email [email protected]. Finally, please subscribe to www.provenandprobable.com, where we provide Mining Insights and Bullion Sales, subscription is free.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
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