Discover a Gold Giant

we paid $6 and5 million dollar if you had to build what we have today I would say well over half a billion dollars today I'm going to be joined by West Red Lake gold who recently acquired the Madson mine in a deal that legendary mining investor and entrepreneur Frank Juri called the best deal he's ever seen in his career please welcome Shane Williams the president and CEO of West Red Lake gold Shane it's great to see you and thanks so much for coming back on the program today it's great to be here J I love I love talking to you okay well we're going to dive into the uh West Red Lake story obviously uh lots to talk about there prior to jumping into that though I just want to get your thoughts on the gold market because you know we were just chatting with the mutual friend before we hopped on camera here there's thousands of mining Executives in the world very few have actually built a mine and far less have built multiple you've built three so in your tenure in this business you know what have you learned that tell that will tell you give you any insight into the Market Outlook today yeah so when you know my background is in construction and operations and building mines and you know they they take time and they take effort and you really need to be starting when the gold market is very cyclical as we all know and so mining getting your timing right with the gold market getting projects in the same period but if you can get the timing right and you hit the gold market then you get the real upside and so you need to be investing and building when the gold market is down because you know the gold market runs and it runs very quickly and then you need to be in production at that time that gives you the leverage so it's kind of a a cyclical approach but getting the two of them right is very important because otherwise when the gold market is down you're trying to come into production you know so you really have to invest as as the great investors say you really have to invest when there's blood in the streets the market will come but you got to take your time and look we've had huge huge interest rates over the last years and the goal has held up very well go if you're a producer today you're making a lot of money you're two over 2,000 a isc's are around 1300 so you're making a lot of money as a gold producer it's just hasn't trickled down to the Juniors the developers but it will it always does and that's where we see once the FED start to think about pivots and pivots over time then you'll see that movement of money and as Rick rule used to say there's that huge massive amount of money into a funnel and that's where you get the leverage of the Juniors coming in as the money the big money swings into the Commodities and gold let me ask you a question actually on timing because this is something I believe I'd love to know where you stand on it I I think nobody definitely myself has the ability to time markets like I would never trust myself to do that but what I can do is identify things that are cheap and buy those things and then sell those things when they become expensive and so looking for undervalued hated sectors that have a history of cyclicality and then buying them when they're low but then it's just a patient game at that point right because I don't know when the market May turn right would you think I'm on the mark there or in your career you think there's actually been a collection of entrepreneurs that have timed the market very effectively well as you say nobody can time the market just from their experience they know that you know the the Mind Builders of the world the Ros bees of the world you know they they're patient you know to build a compy to build a company takes time takes 7 to 10 years to build out a real opportunity and as the market is cyclical they know it will come so that they're slow methodical they're Patient Builders but at overtime you need to do that because if you try to time the market it just takes so long to build a gold mine a mining operation a company that you can never get the timing right you got to be focused on what you want to do your values how what you want to achieve and and let the market take care of itself it always does you know that's you mentioned you mentioned Rick Rule and we were just chatting earlier again he's been a shareholder of 14 of Ross Speedy's companies all 14 eventually delivered him a 10x return but also all 14 at one point in time were drawn down 50 to 70% from his initial uh purchase price and it reminds me of this quote I I heard recently when you're making a long-term investment you need to be prepared to look like a in the short term right and then weather that storm yeah it's very similar you bet on the jockeys really and so that's what happens with with these guys they look at people who are seriously successful and they go with those and they know over time they know what they're doing they'll take their time they'll be patient the markets will go up and down but they know eventually the markets will come to them and that's you know that's a lot of mining successful Executives that's what they do they don't worry about the market they know that by building value slow methodical working through the the times the ups and the downs but eventually they will get there the market will reward success yeah and success be gets success that's why winners tend to keep on winning they keep keep winning yeah I'll use this as a segue for you Shane like I said you built three mines I'm very curious at this point in your career what turned your head about West Red Lake gold what about this opportunity convinced you to join the team and take this project on really it's it it's again it's about experience and and over over 25 years of building operating working in mines just understanding the process understanding from early stage building how long it takes to build out a company you know you have resource development you have resource you have engineering studies you've permitting youve construction that's a long Runway so really this opportunity came along and that you have to spend a lot of money to do that as your investors know a lot of dilution a lot of raising money it's it's a long slog really and so what what really interested me about R West Red Lake and the story was that it was all there you know it's all there infrastructure has being put in place permits are in place uh they've raised the money they were in commercial production now they had some challenges but it's very unusual to have an opportunity like that ready to go so from if I go back to our discussion on Cal cality of the gold market timing of mining projects they're lining up very well a lot of people obviously were in the gold market beli that the time is coming up for gold so you need to be ready to go on that opportunity and the best way to leverage gold price is to build a gold mining company over time now if you to go back and wait 7 years to do that you might miss the market so we target an opportunity that was near term so as that gold market is rising we can be growing a company and building production and that's really the timing issue we've talked about you can't you can't un predict timing but you can set yourself up to be if it does come you're ready to go and that's really what intrigued me about uh the West red leg story that I could get a project that I've been building for 20 years ready to go into production now that's a real opportunity and when you say it was all there I mean we're obviously referring to the Madson mine which is a project that was literally taken to the 99th yard line and and then the ball was fumbled and that you call it rare I mean that may have never happened in this same context before typically if you get a project that far and then something bad happens isn't it normally jurisdiction right the government gets involved if you're in a sketchy location that's not what happened here right it was you know A Series of Unfortunate mistakes made by management they got into some some financial trouble right and had to relinquish the project yeah so normally as you said projects fail for a couple of reasons political risk is obviously ongoing very relevant today in today's market or there's some technical challenges so if You' technical challenges they're difficult to fix and if political issues they're very difficult to think one of the things that I saw when I went in and had a look at this is there was some management failings and that's the easiest solution to solve of those three issues and so my experience of building these is more about bringing the team forward and empowering the team and building the team and they had been through that and they very understood the challenges and so that's an easy solution if you can build teams and you're good at building teams and organizations that's an easy solution to solve and that's what I liked about it those elements they didn't really they got in they had Co hit them as well you know Co affected every mind as well so these are issues that were you know are solvable and do that and with that with the infrastructure that was in place obviously we have the backers France duster and the team and so all those together created a huge opportunity that I was just jumping into I saw the opportunity that's right yeah and actually as Frank ju said the mill on site still has that new car smell that's how new all the infrastructure is right it's it's it's when you you go there on side it we've done a couple of videos your viewers can see it on our website it's just amazing to get a project like that and you know we got it so cheap relative to we talked about value versus price we got it so cheap for that infrastructure I I joke to Frank we were on site and there's a water treatment plant there and I've put in those S of water treatment plants at the end of the mine and the value we paid the water treatment plant is worth that value and I said you got a water treatment plant everything else came for free right you so that's the kind of opportunity that's there and can you can you walk us through the transaction specifically exactly for anybody who's never seen it before I mean a lot of my audience will because I was a shareholder of that company that fumbled the ball at the 99th yard line I was there for the whole ride so many of my viewers were too and that's why I'm so excited to bring this back with new management because as you said changing the people is easy it's a lot easier than changing the geology right so we can fix people problems uh walk my audience through the transaction in specifics what did you buy why was at such great value why does Frank justra call this a deal like none other he's ever seen in his career yeah and and Frank just to step back a bit Frank has been doing this a long time he's one seriously successful he's built a lot of big companies and so for Frank to say this is the deal he he saw best ever that's a big deal he's been through a lot he's seen a lot it's not like me saying it you know it's Frank saying it he's built a lot of companies so look the the it was pure go was the MS in mind before that they were the group they were the company they were Darlings of the stock market you know they that was the Next Great Canadian gold story in story they ran up the value went right up to I think it was $1.2 billion actually that you know and so the market understood the potential of the project the opportunity unfortunately so when you look at that and also this there's been $350 million of capital put into this mind so $350 million that's a lot of capital today there's a mill in place there's an underground shaft there's water treatment there's everything there that you need for a mine I would say if you had to build that today as a green field early stage and some of your viewers will be aware of there's cotay gold there's big mines being built out there hundreds and hundreds of millions of dollars to get these mines up and running if you had to build what we have today I would say today well over half a billion dollars from a green field story so we have all that in place and so that value alone we pay we paid $6.5 million Canadian for that and a 1% NSR and some uh some contingent payments so consideration 30 35 million allog together when you take the value of shares Sprout were the res Sprout resource lending where the were the senior secure lender and we converted all them into shares in West red l so when you take the value of the shares the NSR and the value 30 $35 million kind of overall so when you look at that it's 10 cents on a dollar effectively you know it gives you that sort of value is inherited in that project you know in good context when you mentioned $1.2 billion valuation in the last gold bull market that was the market value the the value the market put on this project in the last bull market and what's the value today so today the value of the company is $ 150 million Canadian dollars okay so you could speculate a bull market right we saw $1.2 billion valuation on the same asset although you're further down the path a little bit walk me through your your process now what are you going to do with the Madson mind what's the what's the near-term and long-term plan here Shane yeah as you said that they they they fumbled at the 99 yard and so we saw that very clearly and we saw some really issues that they just didn't get right and so like I said they got all the surface facilities right they got all the infrastructure they got the permitting done but these mines in Red Lake I don't know how much your viewers know but they're very very high grade but they're geologically a little bit complex and it needs time and effort to get in underground drill these out spend the time and effort now the opportunity of that is if you do that like you can uncover some gems out there your viewers will probably know the original Red Lake mine that uh uh Rob mchan built and then you had gold Corp and it was a huge they found a highr zone so it needs time it needs underground drilling it needs development and that was one area that we identified that hadn't been done to the level that was required just from our experience my experience and understanding so that's going to be our Focus over the next while we need to drisk the other thing is as you said the perception that's out there around this asset we need to prove to the market that that perception is not there anymore so it's going to take time it's going to take time effort it's kind of this as we talked about the gold mine it's this slow build and build up that show the market that we know what we're doing we've taken this over we're going to take our time and and as we do these stages through we'll end up with a successful project and that's our plan now to go on the ground we have teams I was up there this week we have 100 people on site at the moment already we only got the asset in June of last year and there was nobody there at that stage we've ramped back up we've got underground we're developing we're drilling on the ground so we're up to 100 people now working and they're working on the success to turnaround mind drilling underground doing that definition drilling putting together the underground development and really der risking the project as as as what's needed to move forward how has that headwind been to deal with because you're right the market experienced this asset with the previous company ran into the headwinds like myself I was one of those shareholders right so you know I've made up my mind about how I feel about it right the Rocks haven't changed that's how I feel but you're fighting that battle what's that been like has there been much friction or headwinds hasn't been a struggle to explain look we've rewrapped this thing brand new operators brand new management it's you know it's a new take on a great asset that's what you should focus on but what's that what's that process been like well I love that challenge I love that challenge because everybody I speak to it's like some people say I never want to hear that asset again you know what I mean because remember when it got very fry and up as you well know some of the retail come in very late to the story you know so at the peak a lot of them were were jumping in and they were the ones that got burned the institutions came in early and they were out they just the smart money but unfortunately a lot of retail came in on on on that wave and at the peak when the fratin was there so a lot of them they were wiped out effectively so a lot of people I talk to say look I don't want to see that assd again but when I sit back and as you say like we're doing now walk through the steps of what we're trying to do what we're planning to do how we're going to deris this the team we have in place the backers the board you know they get it they begin to understand and go wow this is this is we believe in this now and I'm converting slowly some of the existing shareholders back into West Red Lake There's an opportunity to average down effectively one of them so we're building that momentum and look we're getting good momentum I I believe we're beginning to convert them over they're seeing what we're doing we're getting some very good exploration results New areas within the mine and you know it'll take some time it takes some time but again if you get that gold market that we believe is coming we will be probably at that stage one of the only projects that close to production so I want to pull on that thread a little bit you know pure gold had the mind in commercial production prior to running into problems what's your timeline to get back to commercial production and then you know you you said it already to a degree but what are you going to do differently why is it different this time I just want to give you the opportunity to answer that question specifically well one of the keys we saw when we went in and looked at it is you know they had all the challenges early on but just near the end Unfortunately they brought in some very good people they knew they had some challenges they brought in some very good people and those people were key they began to turn around the situation so we could see in the last six seven months before we would people were beginning to turn around they were beginning to get into the good ore they were beginning to get the production up they were beginning the last three months before they went under there were actually good production numbers there was good G so we could see as you said they were just at the 99 yard they were ready to go yeah I believe with another you know another 6 months and some more money and capital injection at that time they would we wouldn't have that very close very close yeah and the key for me was they brought in some good people who I know are very good mind Builders underground development it took them a long time to Pivot to that but once they got that they began to turn the ship around and unfortunately they ran out of time just at that stage Co hit them so it was like the last smack that killed him really and that that was unfortunate R the visibility management had on the projects EXA and they couldn't get look there was it's a ramp up So Co you need spare parts you need new people you need everything that affected every m in the world never mind in a ramp up it's pretty challenging to do and so we saw that but but they were nearly there so we that's what we saw they were there that gives us the opportunity to take it on and bring it the next level so now look I've I've watched some interviews from uh many of your team on site just talking about the culture shifts that's occurred on site since guys taken over and how enthusiastic the team is to bring this thing back to production so what's that been like cuz you've taken over some old team members brought on your own and you've got to merge that a little bit so this is a real I I love this area because my I like building teams and REM motivating teams and building out teams and big companies and so what what we went as we went in there was there was some key people left over a lot of the original people were let go and and went through care of Maintenance and there was some key people up there that we ident ified and the the Sprout who were the main um the main holders of the asset as a senior secure lender they actually In fairness they identified some of the key people and they kept them in place and so when we went in we saw the value of those people and really it was about they've been through a process they went through care and maintenance they say all their their colleagues but were let go there was issues with payments in the town pure gold left a lot of suppliers as well with no with in the Lurch so there was a lot of history there was a lot of bad blood in the town and that's what I like it's about converting that around into new energy and new focus and and we spent a lot of time doing that and we worked with the communities we we we paid off our the debts that were there we got the people around the new the new plan the new motivation and they've come around and they've learned which for me is a most important is Bing these Minds about learning from the lessons and the failings you know where not bringing anything new the more important thing is we're bringing a new energy a new Focus but we're more important we're learning from the team they know what the failures were they know what went wrong and we can harness that energy and bring It Forward that's that's the key to success in my opinion and they they kind of knew what they needed to do you know they knew what they needed to do they just weren't getting the support the opportunity to bring that out and so we if we can bring that out and focus that then I think we'll get very successful like I said to you earlier I've built L MAAC mine very successfully for Eldorado and we built that from early stage to full production in 18 months I was down there with the team and again the team were energetic they were focused part of my job was to build them up and I see that same sort of energy down at the site now they're rejuvenated they're refocused and that gives me a lot of confidence that we will be successful this time around I love that yeah set the vision gather the best people in the world and then get out of their way and let them do their job Empower them to do their job and and that a lot of people don't get that I mean that's a lot of what at the executive level we as an executive corporate should work for the site not the other way around they shouldn't work for us a lot of Executives in corporate feel that well the sites are working for them and they need to perform and everything I see a different approach I see our job as executive corporate team to support them to help them be successful that's part of our role and that's what I like to do and I've had very good success with that and that's what I think is the success of of the companies I've built and so that's part of our job we're down there this week promoting them giving them ideas helping them give their Vision a lot of them know what to do you know it's not about it's not like they don't know what to do they know what to do but you need to give them that space to rise and that's part of it so so I know you've also been busy at your Rowan projects and I'd love you to share what else is going on within West Red Lake goal that's increasing the net asset value of the company yeah so you know we have another project Ru which was the first opportunity in Red Lake we took over yeah that is a a very good project it has 800,000 ounces at at 9 G which is high grade or body in Red Lake it's there's a lot of around Red Lake there's a lot of or bodies that are highr they're probably not big enough to justify you know their own Mill their own infrastructure their own facilities however we're the only group now and this is part of our strategy we're the only group that independent group there we have Revolution who have the big red leg mine and you you have great bear who used to be great bear now being bought by kinra so we're the only independent have our own Mill there so that gives us the opportunity to create this Hub and spoke model where we can consolidate a number of these deposits including Rowan use that and be feeders for our Mill so we can expand our Mill expand and grow the business that Hub and spoke model it's popular in other countries not so much in Canada but it gives us unique opportunity to build number of that around our Mill we can expand our Mill our facilities and use these facilities to draw in which gives you a much higher grade because you can sweeten with the grade you don't need a lot of production the matd will be the base mine with the main production everything but if you can bring in higher grade material then you can sweeten the the the grade bring it up and that that'll be overall also from a risk mitigation pure gold team had only Madson and they had one area of Madson so they they had to live and buy where is successful mining is a risky game you need to be risk management so from a strategy like that you'll have a number of production centers which lower your risk of your ability to be successful so these are some of the strategies we're using to mitigate the risk and within the or body there's a number of different areas so you could you can see a sort of a a number of production centers feeding this Central area which reduces your risk which gives you the opportunity to focus and maximize the grade and coordinate within that and that's really the strategy we've used going in there to build out the company yeah lots of optionality optionality is the key underground mining as you know it has its risks has its challenges the key thing to manage that is optionality the ability to Pivot the ability to change and if you don't and you're stuck in one area if it fails or if there's some issues then you're in trouble you're really and that's really the team went into an area called The mcve Zone which was the original area they went in yeah and I understand why it was close to the m it didn't it's not deep down in the system it was easy development if you want to show production quickly it's a right area to go but it was more geologically complex than they thought there was some challenges there and so you know that failed if that failed you're in trouble they know where to Pivot whereas having as a strategy a number of production areas another opportunities it gives you to spin and be able to adapt and adaptability as you talk about a lot is is the key to success in the changing environment and no different in mining in any business exactly no different in mining what's plan C that's what I want to know before I read a cheat and the big successful entrepreneurs in mining they have they build their companies up over that diversification number of different C operations number of different companies it's kind of like and and and once once you have that we're looking obviously with the backing of Frank and the group to build another gold carp now gold carp was a big company and it's a big ambition but Frank has big Ambitions and the idea is to get Madson going and use that as a base to build a large company so walk me through that Vision a little bit and even just inside of 2024 core priorities maybe start with cash position are you going to be going back to the market what does that look like yeah we we we have about $12 million at the moment last year um actually the company just won the TSX 50 the top Mining Company in in in the tsxv which is a big deal given the markets as you will know so last year we we you know the markets are pretty down to go market especially for juniors and developers but we raised over $50 million last year it's probably 50 more than most of our PS really in today so we have with the backers we have the team we have we're getting that market support so we we have to raise more money as we go forward and build that but I'm quite confident that will be not a problem for the company with the backers we have and the team we have as we develop that in so that's kind of there well the office that you're located right there's a handful of companies that have been able to raise far more money than their peers over the last 24 months yeah and really like I said I number Frank and the team were out of money for a long time gold CP and Frank was building entertain Lionsgate entertainment you know movie companies but in the last number of years he sees the setup for Commodities and gold he's back in a big way he's back in a big way and look Frank is good at timing the last bull he did he built a lot of companies over that time and so he's back in and building that structure and building that understanding and that teams building the teams and opportunities and that's gives the support from a wider group you just spoke to a colleague of mine he is a company there's about four or five different companies in there and there's a good group of there's probably 45 people in our office now Engineers um geologists Finance people and that gives you a a platform to build a pro and and there's no there's a lot of synergies between group there's no one company versus the other we're all working together and pooling resources pooling resources together some people are good at Sean is good at raising the money and opportunities Frank is good at Opportunity I'm good in the production and operations so when you get that together it gives you a lot of synergies and it's all helping each company and that's that's very unique for me that I've seen in in the Min industry but it's very powerful when it's successful yeah look Shane I I want to thank you for coming on and and chatting with me today it's been great getting your perspective on this asset because as I said it was one that I was quite close to from 2018 2019 2020 and um you know I've had you on before to get your thoughts on the new plan right new packaging great asset New Management right the sky is the limit here so um I appreciate your time today excellent thank thanks J it's great to be on

Channel: The Jay Martin Show

Views: 12,157

Keywords: Gold, Silver, stocks, Investing, money, jay martin show, jay martin, cambridge house, west red lake gold, junior mining, precious metals, shane williams, frank giustra, stock market, investing in gold

Id: tZ7ZEwnNyc0

Length: 28min 19sec (1699 seconds)

Published: Wed Mar 27 2024