Maurice: Joining us for conversation is Morgan Lekstrom, the president of Lakewood Exploration Inc. (LWD:CSE). It's great to have you join us today to share the latest developments on Lakewood Exploration and the exciting flagship Silver Strand, which has the makings of becoming the next pure silver play in the United States. Before we begin, Mr. Lekstrom, please introduce us to Lakewood Exploration and the opportunity the company presents to shareholders.
Morgan Lekstrom: Lakewood is a new silver company. We're a pure silver play. We are looking at our flagship asset in Idaho, the Silver Strand Mine. It was a past-producing mine, and we are looking to go in there, explore it, put the ore body to depth. It was mined at a very shallow depth, only 90 meters. There's so much potential there. It was held in by a bunch of feuding parties back in the day. The whole land package has never been consolidated like what we've done.
And by consolidating this land package, we're able to get a five-and-a-half-kilometer strike put together, which allows us the opportunity to explore the area. From what we're seeing on the surface and in the underground, and we'll talk about those news releases later, it looks very promising to have a large, large resource and payoff for shareholders, but also near-term production potential, which is the pillar of what we are looking to accomplish at Lakewood.
Lakewood Exploration is looking for that large exploration payoff, near-term production potential, but also acquisitions, at the same time, that fit that model. We do have a triple-pronged approach, and our big concentration right now is on that large exploration payoff at Silver Strand.
Maurice: The value proposition is quite compelling. Let's go on site. Mr. Lekstrom, please introduce us to your flagship Silver Strand and acquaint us with the region and some of your neighbors.
Morgan Lekstrom: Silver Strand is our flagship mine. It's in Idaho, in the Silver Valley-Coeur d'Alene, which is one of the most prolific areas on the planet for silver. The region has produced nearly 1.3 billion ounces of silver. Companies such as Hecla Mining Co. (HL:NYSE) and Coeur Mining Inc. (CDE:NYSE) have had their start there. You also have the deep mines within the region, the Lucky Friday Mine, Galena and Sunshine, respectively.
There are not a lot of regions in the world that have extracted as much silver as the Silver Valley-Coeur d'Alene. The Silver Strand is one of the last, I would say, unexplored assets in this area. This is such an exciting opportunity for us. As a pure silver company, we look forward to putting this to depth. Our neighbors in the valley have mines go down to 2,000 meters. We have only scratched the surface, as the Silver Strand is at 90 meters of the original workings. We're going to start drilling the Silver Strand, with an emphasis to start pushing that ore body down to prove it.
The unique thing about Silver Strand, too, is that we have something called a gold credit. What that means is there's a portion of the ore that comes out that has gold in it. And unlike the rest of the mines around the area, this is actually very high-grade gold—what we'd consider higher-grade, which is 5 grams a tonne. What we're looking at is 5 to even 10 grams a tonne.
To put that into terms, most mines are built on 1 gram a tonne or less. Silver mines: Most mines are built on 100, 200 grams a tonne. We're seeing anywhere from 300 to 2,700 grams a tonne out of Silver Strand (press release), and this is just the top. If anything is proven in this area, the deeper you go, the better the grade. We're looking forward to running our exploration program and getting going on this.
Maurice: The Silver Strand has a historical resource. What is the exploration plan and timeline moving forward to have a complaint NI 43-101?
Morgan Lekstrom: We're currently working on our NI 43-101 in the background, and we plan update the market by the end of summer. We are looking to run the first stage of our exploration program, as we've been saying, by the end of late summer. We're working on our plans right now. I work all the time with our geology team making sure we're looking at the right area and the right mix of geology. We don't want to do things in an unmethodical way.
In our latest announcement, we were proud to convey that we brought on Rob Burk (press release), which is just a tremendous value add for us. Ron is an exceptional geologist and exceptional exploration leader. He's worked for some huge companies like Centerra Gold Inc. (CG:TSX; CADGF:OTCPK) and Teck Resources Ltd. (TCK:TSX; TCK:NYSE). Having calls with Ron and having that advisor in the background has helped us already home in on what we're looking at in terms of exploration, and also, how we can make the Silver Strand resource NI-43-101-compliant, build it out and make it a huge discovery. The upside potential of this resource is massive.
Maurice: Having the intellectual capital of someone like Mr. Burk doesn't show up on the balance sheet, but those are the accretive moves that a company has to make to achieve success. Now that we know the plan, let's test the proof of concept to date. Since our inaugural interview two months ago, Lakewood Exploration has had some exceptional sample grades. What can you share with us?
Morgan Lekstrom: Absolutely. As stated earlier, we just announced 2,744 grams a tonne. Keep in mind, most mines are built on 100 to 200 grams a tonne silver. We're getting that from our existing underground, which everyone said, "Oh, it's been mined out." Our geologists go in there with new techniques, new technology. They take chip samples in areas, and it's just a key indicator for us that there's that high-grade mineralization. We're seeing it on the surface as well.
There are outcrops all over the place. Having the ability to walk along this 5.5-kilometer strike length has helped us and help build the Silver Strand story out, along with the upside potential of this resource. Being able to walk on ground that hasn't been walked up to our Burnt Cabin asset gives us confidence that we may be on to something very intriguing. And if anything that is shown by our results of that, between 1,700 and 2,700 grams a tonne just from chip samples, there's a huge potential here.
Maurice: Certainly sounds like it is. Well, let me ask you this, were the sample grades a surprise, or is this what the team had expected?
Morgan Lekstrom: You expect good results, or you hope for good results. But honestly, I wasn't expecting to see 2,700 grams a tonne right away off a chip sample. It was unexpected, but it was also encouraging. These high grades reaffirmed to the team in the background that we're doing the right thing. We're looking in the right areas. And that when we begin the first phase of our exploration program, we're going to be looking in the right area.
We have something a lot of companies don't have, which is that existing underground, the ability to go in the historical mining there that was just hand-to-mouth, small scale. We have the ability to blow this resource out big and score some value for the shareholders.
Maurice: Multilayer question here, and you referenced drilling: What activity is currently being conducted on site, and is the goal to twin the historical holes?
Morgan Lekstrom: I can't provide the full details on that currently, as we are finalizing the plans, and then we'll have a news release around that. But I can tell you that we're looking at extending the current non-43-101-compliant resource to depth, to use the words you used, to "proof of concept," which is more than a concept for us. We want to show that identity between the mineralization we're seeing on the surface—the gold credit—see how far that goes, and we also want to get this thing to depth.
Like I said before, a lot of these mines in the area go down to like 2,000 meters, and we're only at 90. For us, it's all about drilling and getting down there and chasing that resource down.
Maurice: Before we leave the site, what is the next unanswered question for Lakewood Exploration? When can we expect a response, and what will determine success?
Morgan Lekstrom: I'd say the next unanswered question for Lakewood is: What's in the pipeline as far as acquisitions? And all I can say on that is stay tuned. What's going on at Silver Strand for drilling? We're looking forward to drilling in the late summer. Plus, we're adding very, very competent, meaningful people to our team.
My background as a mine builder: I've worked all over the world building mines for large companies, small companies. It changes the dynamic of the team when you have geologists, amazing capital markets people and mine-building folks in the mix. We do have what it takes to take something through exploration, make the resource huge and build it. That's a very unique position for us and for the mining industry.
Maurice: Yes, sir. The synergies complement one another with Lakewood Exploration. You have experts with a proven pedigree of success. You were brought on board recently, as well as Mr. Burk, and who else was added to the team, sir?
Morgan Lekstrom: We have Lawrence Roulston. We have Ron Burk, like you mentioned. Myself. We have Kristina Pillon. She's our head of investor relations (IR). She's unbelievable in what she does as well. And just lots of energy in our team so far. We're going to add a lot more people in the right time and the right positions.
We added our chief geologist—I can't forget him—Phil Mulholland. Phil is an exceptional geologist with a proven track record in the Western U.S., in Idaho as well. He's worked all around the Coeur d'Alene area. He's worked all over Montana. He's worked for big companies like Barrick Gold Corp. (ABX:TSX; GOLD:NYSE). I just can't say enough good things about Phil and his dedication to the profession, but also to the Silver Strand project. The ideas that flow, we're just approaching it with a very unique and new technology.
And Phil's the right person to be working with that side of it, his ideas and the crew, between him and Ron and how we all communicate together.
We have Joness Lang in the background too, who's also a proven capital markets expert, and he's senior VP for Maple Gold Mines (MGM:TSX.V; MGMLF:OTCQB).
Maurice: Switching gears, let's look at some numbers. Mr. Lekstrom, please provide the capital structure for Lakewood Exploration.
Morgan Lekstrom: We have about 33.8 million shares out. We have about 7.5 million shares free trading right now. We've got 7.5 million warrants out, and we've had a very good run so far. Very successful. I think we're hitting all the right tunes and all the right notes with our capital structure. It's very tightly held. We're in a very good place from a capitalization standpoint and a treasury standpoint. We just raised $3.5 million with 14 million shares. We are well positioned to execute, and to execute on exactly what we're saying and won't need more capital anytime soon.
Maurice: You're also rewarding shareholders. Speaking of the market cap, Lakewood Exploration has been on a roll. Since our inaugural interview on May 31, the stock was trading at $0.29, and since has moved up to $0.76. Congratulations, sir.
Morgan Lekstrom: Thanks, Maurice. It's exciting and positive to see the markets responding to the Silver Strand and the Lakewood story, but also to the capital structure. How this whole company has been structured is important to a shareholder—to know that there is a lot of room to grow, but it's also tightly held. It's not just a large vehicle of shares out everywhere. We're making sure that we have the ability to bring the value of the shareholders in a meaningful way.
Maurice: And speaking of shareholders, I am a proud shareholder, by the way.
Morgan Lekstrom: Oh, thank you.
Maurice: Honored. Before we close, Mr. Lekstrom, what would you like to say to shareholders?
Morgan Lekstrom: I know I said this earlier, but be on the lookout for the execution of our three-pronged approach on the acquisition side. Stay tuned.
Maurice: Looking forward to it. What keeps you up at night that we don't know about?
Morgan Lekstrom: I've been on many projects around the world, and there's been a lot of times I've been kept up late at night for reasons I don't want to go into it. But here with Lakewood Exploration and the Silver Strand, I'm not kept up at night because we have such a competent team. We have such good leadership in the right places. If there is something, we work it out right away. We have enough credible experience around us to solve challenges and not to delay. It's a unique position as a company, but even for me to be the president of the company to have that ability to lean on technical experts like Ron Burk, to lean on our VP of exploration Lawrence Roulston when we need to, and collaborate and have those great conversations. It's unique.
Maurice: Last question: What did I forget to ask?
Morgan Lekstrom: As much as I say we're in the makings of a great mining company, I just remind people that silver is one of these commodities that isn't just a hedge. It's used in manufacturing. It's used in making of video cards for cryptocurrency mining. It's used in making a semiconductor. It's used in making the microchips.
This is not a commodity to be taken lightly. If the historic proves anything, we're underperforming compared to our other commodities. I think there's a big opportunity here. I'm a silver bull, but I think proven from the technology side and the market side, I think we're onto something amazing here. Lakewood is getting positioned and we are positioned to take advantage of that for our shareholders.
Maurice: Mr. Lekstrom, for someone that wants to learn more about Lakewood Exploration, please provide those contact details one more time.
Morgan Lekstrom: Take a look at our website, lakewoodexploration.com. If you go to the bottom, Kristina Pillon's phone number and email are there. She's fantastic to speak with; if any questions need to be relayed up to me, she can do that.
Maurice: Hands down, I have to give it to you, your corporate deck is amazing. It's the best I've seen ever. I'd encourage anyone to go to the website. Take a look at their corporate presentation. They've put a tremendous amount of effort and it shows. All right. Mr. Lekstrom, it's been a pleasure speaking with you, sir. Wishing you and Lakewood Exploration the absolute best.
Morgan Lekstrom: Thanks, Maurice. You too.
Maurice: And as a reminder, I am a licensed representative to buy and sell precious metals through Miles Franklin Precious Metals Investments, where we 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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