Interview with Andrew Bowering, CEO of Gold and Silver company Prime Mining (TSX-V:PRYM) c.$700 AISC Prime Mining Corporation is a collection of successful capital markets mining executives and experienced local operators with specific locational knowledge. Prime Mining has built a new, near term gold producer, the Los Reyes project in Sinaloa, Mexico, which has been historically productive. Decades of detailed technical studies and fieldwork have been poured into the development of Los Reyes to position it as an advanced, cost-effective opportunity poised for rapid advancement. Los Reyes is a gold mine that Bowering hopes to have fully operational within 2 years. Prime Mining only went public on September 3rd.
Los Reyes has already had c. USD$20m spent on it over the course of the last 20 years by various companies. It has been through PFS and all the way up to a PEA before. With the sheer quantity of drilling and studying performed on the area, one might be worried why companies have shied away from advancing it to the production stage in the past. However, Bowering explains this was not down to a deficiency in the promise of Los Reyes and was instead down to general company incompetencies of the ownership at the time. Prime Mining initially put c. $1.8m into the project, so one would hope this information is solid. Bowering claims experts say it could have as much as 1.5-2Moz of gold resource.
The business plan at Prime Mining is to get things going as soon as possible. There are around 530Koz of well-established, economically mineable gold and 10Moz of silver sitting at surface. They could be producing 65-70Koz annually in just over 24-months, cost-effectively. Bowering admits Prime Mining's knowledge of the ore body still needs some work. As far as Bowering is concerned, the sooner they have cash flow from the mine, the sooner they can upgrade the project and make it bigger. Bowering also promises a new resource, on top of the 530Koz, to be revealed in the next 45 days. It will be "bigger than what the market knows," and will sit at surface.
Bowering claims the company is financed via their upcoming new resource, and by the future PEA that will add value to the company. Finance is secured until mid-2020. Prime Mining came public with an $8.7M financing; Bowering himself contributed a large sum towards the financing, in addition to previous investments of USD$2M in March/April, but is admirably yet to remunerate himself. The $8.7M is accounted for via general infrastructure transactions, including equipment, road cleaning, paying back debts, geology, drilling and engineering. Prime Mining currently has c. USD$4M in cash.
The community of Sinaloa has a good relationship with Prime Mining, courtesy of the road cleanup and Prime Mining's commitment to bring water to the location during the two dry summer months. Payments to the community are minimal and in Bowering's own words, they keep everyone happy.
The entire management team swapped out their first-year salary for equity in the company at CAD$0.30 per share. Bowering takes no salary, and money is only ever spent on marketing. This is unusual and very encouraging for prospective gold investors; they are putting their money where their mouths are and are putting all the money they can into the ground.
Bowering also touches on Prime Mining's management team, who have exceptional track records, and upcoming PEA/permitting announcements.
One issue on the horizon for Prime Mining is liquidity. With such large amounts of the company being owned by few insiders, will this detract from the companies growth moving forward? Bowering feels at such an early stage on the market, control is more important than liquidity.
Prime Mining currently sits at CAD$0.30 with a market cap of CAD$18M. What did you make of Andrew Bowering? Comment below.
We Discuss:
1:08 - Company Overview
1:41 - Asset History and Business Plan Going into it: What Did They Know Before Putting in $1.8M?
10:55 - The Money They Will Need to Take the Project Forward and Where They'll Use it. How do They Remunerate Themselves?
12:12 - Jurisdiction and Community Relations
16:55 - How Long Will the Money Last and How do They Remunerate Themselves?
19:49 - Announcements to Come: Permitting & PEA
21:35, 26:44 - The Asset: Price of Production, Life of Mine and Scale
25:33 - Team Experience
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