Ethos Gold (TSX-V: ECC)(OTC: ETHOF) and its President and CEO Mr. Craig Roberts should be no strangers to Outsider Club readers.
We've featured him and the company several times, and we're doing so today as well in the wake of some big news.
With gold soaring, Ethos is starting in a strong position and getting even stronger by making some big moves. Read on for details.
To your wealth,
Gerardo Del RealEditor, Junior Mining Monthly and Junior Mining Trader
Gerardo Del Real: This is Gerardo Del Real with The Outsider Club. Joining me today is the President and CEO of Ethos Gold (TSX-V: ECC)(OTC: ETHOF), Mr. Craig Roberts. Craig, how are you today?
Craig Roberts: I'm great, Gerardo. Thanks, I'm really good.
Gerardo Del Real: Thanks for taking the time. It's been a bit since we chatted. There was some important news you recently announced. The headline reads, "Ethos Establishes New Technical Advisory Team, Stakes District Scale Gold Projects in Quebec and Ontario and Announces a Financing." Now, that may be one of the most understated headlines because the names that you're adding to an already excellent team are top notch and don't typically sign on to a company with a market cap, frankly, as small as yours. So can we talk a bit about what I feel is a step change and a game changer for Ethos Gold moving forward, given the current gold environment?
Craig Roberts: Absolutely. Gerardo. You're absolutely right there. Very delighted to have this group join us. As mentioned in the release, they have quite a long affiliation with Discovery Group in Vancouver. Discovery Group, as you know, is a very successful exploration group that fairly recently - actually starting in 2005 - made the Kaminak Coffee discovery up in the Yukon, eventually sold that to Goldcorp for more than $500 million. Rob Carpenter and Al Wainwright were the two technical principles of Kaminak. Rob was the CEO and Al Wainwright was a lead geologist on that project. Subsequent to that, Discovery Group has had Northern Empire, which they sold to Coeur for, I believe, about $130 million. And more recently has Great Bear, which I think most people are quite familiar with, has reached plus-$800 million market cap on a discovery in the Red Lake area. Discovery Group also has Bluestone which is developing the Cerro Blanco Project in Guatemala, largely financed by the Lundin group. Rob has also worked closely with Dr. Rob Brozdowski and Dan MacNeil, who bring a wealth of geological experience and talent. Finally, Marc L'Heureux has joined as an advisor. Marc has spent a good part of his long and successful career in Quebec and will be key to us acquiring and advancing Quebec projects.
Ethos has been in the Discovery Group camp for some time, but bringing on this team really moves us right into the mainstream of Discovery Group. All of the people coming on in this advisory group are people that have had a long affiliation with Discovery Group. We're just delighted to have Rob leading the group and to have the technical horsepower of this team.
As you noted, we've staked two projects initially, one in Ontario (Fuchsite Lake), and one in Quebec (Schefferville). The plan is to use this team to go after district-scale gold projects in Canada primarily, use the team to both identify these projects, often look at them a different way than maybe they've been looked at historically and to design and execute an exploration program to go after them and see if we can make a discovery with district-scale potential.
Gerardo Del Real: Craig, you mentioned two names there. You mentioned the Kaminak acquisition and the discovery of the Coffee Gold Project. I think it's important to note that that was acquired by Goldcorp, I believe, for over $500 million. The second name that you mentioned that you said most people will be familiar with was Great Bear, who of course is a part of the Discovery Group. That's a stock that went from about $0.30 here a couple of years ago to over $19 at its peak, and I think it trades right at the $17 level right now.
So when I look at Ethos and I see a sub-$20 million market cap Canadian, and I see the firepower that's coming in from the technical side of it, that type of success brings a deep, deep network of contacts. I have to believe that you're going to have a multi-pronged approach moving forward, where you'll likely have options to joint venture some of these projects that you have access to, potentially to majors while, frankly, keeping the better ones for yourself and maybe putting a couple of holes in. Is that something that you're considering strategy-wise moving forward?
Craig Roberts: That is certainly always a possibility on any project, Gerardo. On this strategy to acquire and go after district-scale projects, the new strategy that we announced in the recent press release, our primary intention with these new projects is not to joint venture them. It is to do the initial work ourselves and, if we get traction, to advance them as the primary operator. But we do have pre-existing projects in Ethos that we're also are very positive on. I'll just briefly run through those.
We have the Perk-Rocky Copper-Gold Porphyry Project in British Columbia. We've done quite a bit of surface sampling, mapping, and desktop work on that project. Recently two of our new team members, Dan MacNeil and Dr. Al Wainwright, were up on the project. I'm going to be putting out some detail on that.
I did mention this in this last press release, but suffice to say, at this point, we're very positive on that project and its potential. It's early stage, but it's a very large-scale porphyry target. There's a very large alteration footprint, copper-gold mineralization over quite an extensive area. It's a project that absolutely could be a candidate for a joint venture as well as for us to move it ahead ourselves. We haven't made a decision on that at this point, but that's absolutely a project that could be of interest to a major as a joint venture candidate. We are putting together an updated technical analysis on that project. I will be putting an update out to the market on that project not too far down the road here.
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Gerardo Del Real: You mentioned Perk-Rocky, and I know you want to mention Iron Point. I think it's important to note that you had what I think geologists would describe as geologic success, but not that blockbuster discovery hole. A part of that was because you were careful with the treasury because, frankly, we were in a different market. We were in a bear market and cash was king. I just wanted to give you the opportunity to talk about the treasury here. But before that, for people not familiar with Iron Point, if you can give us a brief overview there.
Craig Roberts: Yeah. Iron Point's a very interesting project. It's about 22 miles east of Winnemucca on the I-80 Interstate. It's at the north end of the Battle Mountain Trend, actually at the intersection of the Battle Mountain trends. It's been long recognized as one of the largest mercury, arsenic, antimony anomalies in Nevada, coincident with a large gold in soil anomaly. There's a range-front fault there, which is a deep fault and likely the plumbing for mineralizing fluids. At surface there, the mercury, arsenic, antimony, and gold anomaly in upper plate rocks is at least 5 km in length along the surface expression of this fault.
It was drilled historically back decades for near-surface, bulk tonnage mineable-type targets, which is what was the primary concept that people went after, particularly in the 1980s, 1990s, was these near-surface bulk tonnage-type targets. So there was quite a lot of drilling in the upper plate there, but very few holes, in fact less than a handful, ever penetrated deeper below the upper plate at Iron Point.
Dr. Quinton Hennigh, who's an advisor to Ethos, brought this exploration concept at Iron Point to Ethos several years back. I think it was in May 2019, we did a joint venture agreement to earn in to 50% of the project from Victory Metals, which is focused on the vanadium at Iron Point. Quinton's concept was to drill deeper, to go through the Roberts Mountain Thrust and into the lower plate stratigraphy there and to look for Carlin-type mineralization at depth. We drilled four deep holes there in 2019. One of them we've now confirmed absolutely got into lower plate stratigraphy. It got into a unit that's known to have gold deposits in Nevada and has particular kind of textures and indications of good potential for Carlin-type gold mineralization and actually had some very seasoned Nevada geologists quite excited for its potential, including Lew Teal, who was very involved in the original Carlin discoveries when he worked with Newmont.
We recently redid our deal on Iron Point. We originally had a three-year earn-in that required $5 million Canadian of expenditure over three years, which ramped up year by year. We have now amended that to a five-year deal where in any year we only have $250,000 US of required expenditures. So it's given us a lot more breathing room on that project. We are going to develop a program that will be combination of geophysics of re-assaying some holes and some three-dimensional modeling based on a lot of data that is available on the Iron Point project, both from our work and from historic work. We're very optimistic that we can develop a compelling target based on that work.
Then going forward from there, again, similar to Perk-Rocky, I think we're going to have the option of either deciding to do some additional drilling ourselves or to seek a joint venture at least with a larger company. I do know that there are a number of larger gold companies that are not in Nevada that are interested in taking on exploration programs on Carlin-type targets. I think we've got quite a good potential to go the joint venture route on that project if we wanted to do that. We are doing some work in planning on that project as well, and I will have a press release out not too far down the road on that project. In fact, in the release we put out yesterday I indicated that there would be an update coming on that project.
Gerardo Del Real: Craig, I have to say it again. For a company with a market cap sub-$20 million Canadian, there's very few, if any, companies out there with the caliber of projects at this stage, the team that you've managed to put together, and frankly the amount of catalysts that you have moving forward here in what I believe is going to be a historic gold bull market.
What's the treasury look like post-financing, Craig, before I let you go?
Craig Roberts: Yeah. Pre-financing, we have cash and liquid or near-liquid securities of around $3.4 million Canadian as of mid-July. We're raising just a little north of $2.2 million in this round. Subsequent to announcing the first financing we had an institution indicate interest in investing $1.5 million into Ethos, and so we added another $2.1 million tranche. Post-closing these two rounds we'll be north of $7.5 million. So we're in pretty good shape in terms of the balance sheet here.
Gerardo Del Real: Craig, thank you for your time. I look forward to seeing you allocate those dollars and putting them to work.
Craig Roberts: Great. Thanks, Gerardo, really appreciate the time today and look forward to updating you in the future, too.
Gerardo Del Real: Thanks again.
Craig Roberts: Thank you.
For the past decade, Gerardo Del Real has worked behind the scenes providing research, due diligence, and advice to large institutional players, fund managers, newsletter writers, and some of the most active high-net-worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.