Omai Gold Mines (TSXV:OMG) - Reigniting a Gold Mine Giant

[Music] hi I'm Ela ellingham CEO president and director of omine goldmines limited we TSX Venture limited listed company um we have a 100% interest in the uh oine gold project in Guyana it's a past producing uh gold property which is always a good thing and uh we've been exploring on the property for about two and a half years so it produced 3.8 million ounces and we've actually in two and a half years uh discovered and put into 4311 another 3.6 million ounces so uh we're we're quite pumped about this project and obviously as a brownfields project uh it has a lot of advantages Road access know the old Metallurgy and and we are really looking at extensions of the known uh types of mineralization so we believe that this is something that can be fast track to mine again El love to see you and and meet you we've not spoken before or heard um about this story before so um we love to kick off just um find out a little bit about you what's your background what have you done in the past yeah so I I started as an expiration geologist uh more than 30 years ago um immediately loved the business I think expiration is the the best business in the world um but like lots of people in expiration uh it's a highly cyclical business and so you know in the downturns I work for major mining companies I worked for real alome a big copper company uh and in the downturns I worked for the juniors which is really uh the exciting stuff and and that's where I believe a lot of the discoveries are made um another downturn I went worked for the Toronto Stock Exchange it ended up being eight years and uh that again had been a little bit of a dream of mine I always liked the markets and so uh you know you said you set a goal a Target and then you end up uh getting there and it didn't disappoint it was absolutely fascinating and so I was the national leader of mining there and uh also did the international business development so that was a pretty exciting meeting mining companies from around the world um so when I left the exchange I I was a consultant for about 15 years uh mostly focused on International companies and uh and uh started a couple companies and I've sat on about 15 corporate boards um half of those since they were private so kind of about you know working with companies as they go public um I guess one of my U more interesting uh gigs was I I joined the board of richmont Mines uh in 20 2011 um and it was kind of a a sad small mine up in the Wawa belt and no one ever loved the waah wa belt um and we almost shut that mine down uh the island gold mine in 2011 2012 um drilled beneath it found U you know more mineralization and that's today you know richmont was taken over by Alamos and that's a 5 million ounce deposit today uh grading over 10 gram per ton so very fortunately I'm on the board of Alamos so I've been able to kind of Follow that uh Discovery through to a spectacular mine and we're putting a billion- dooll shaft down on that project today so uh yeah I mean it's uh the discoveries to me and uh watching a project develop is just amazing so well okay well as as a I think a PO poster boy in the industry for sure I'm I tell me about the asset though so obviously has it's a former producer has produced in the past who who owned it um how did you pick it up great yeah so um the omai project is when it was a mine it was in uh in cambor if you remember that was a a large uh well-known Quebec company uh they brought it into production around 1993 produced It produced for about 12 years so um this was a large wine so it it produced over 300,000 ounces a year I think the the peak year was uh 2002 they produced 356,000 ounces that that's a big Point um one of the biggest challenges was the gold price almost through that entire time was under $400 an ounce so I mean it's the worst nightmare for a company you bring your M into production the gold price sags um very fortunately it was fairly robust a large scale mine and they were profitable the whole time but it it so basically uh when they were uh and when they were towards the end of production they had acquired the roosevel property which a lot of people would know which is uh about 200 miles east of uh of omai in Surin now and so the company got into a little bit of uh credit Crunch and uh basically they just decided to move the the 20,000 ton pring Mill from omai over to Roosevelt so that was kind of the death null for omai its Destiny was to be shut down so the good thing for us is that means uh between the low gold price and the fact that they they took some of the the mill and other uh assets over to the other property means that they didn't do expiration so for us that's awesome you know a mine that was shut down and and it's not like they they drilled and looked for extension so so basically after that imold took over cambor and uh imold decided to relinquish the property to the government so again that is good for us because it means I amol did all the Reclamation it went back into the hands of the government and so uh then a group of people uh brought this uh acquired the property from the government it is actually unique in Guyana because a lot of uh a lot of properties are mosaics of small properties owned by locals whereas this property was held as a as a uh in its entirety by the government and so this property was acquired by the government by this company uh it was an RTO in 2020 and uh I joined the board in March of 2021 and took over as CEO a couple months later so um yeah so I mean it is a good thing because the project came from the government had been reclaimed so we're like fully indemnified from any historical small or large scale mining so uh so yeah so we hold 100% interest in that right okay so you you you picked up former producer M we talking about guilt Creek and and and when not um what's the plan because I I'm always intrigued by how companies um lay out their their plan you know you were sitting as s 30 million Market company I'm not quite sure what your cash position is but you've got to be efficient so um H how how do you see this you know planning out so I I guess one thing is uh the guye government is extremely uh interested in seeing Minds come into production so you're you almost feel like you're working a little bit in a partnership with them um I think some of the issues like when omai was in production and employed a thousand people and this is in a country that only has 800,000 people so uh it was literally the Heyday of economic prosperity for Guyana so so there is a a strong desire to FastTrack this and uh very fortunately you know when we started drilling um we drilled a long strike you know below and along the flanks of a past producing uh pit and and the mineralization just continues so we have like 2 and a half kilometers of mineral Iz ation now and and We Know It extends beyond that so um we we basically were um keeping our eye on the prize which is our belief that this will be a mine again and it will be a large scale mine again um so we We are continuing our expiration very aggressively as I said we've in the two and a half years we've got up to the 3.6 million ounces uh we believe that that can be expanded significantly at the same time we've started some engineering studies because we have you know we have existing tailings uh facilities so we have to look at those like can those be reused can we expand them how much capacity do they have uh we know the metal Argy so so we can FastTrack some things like that so unlike other companies we are really expiration because we believe we can expand our resource but we're also doing some things that that sort of are the path towards uh a future wine does that sort of explain it it's uh you know yeah does um and you just touching upon a few things which we're seeing in the market th this year where it's been tough three years for for gold companies right and people are saying well it used to be a case it we'll keep drawing and we'll work out how big this thing gets it now it's a case of access to Capital is tougher uh it's more expensive when you do get it um part because share price is down or you know people com with alternative financing it it's expensive so the ability to get to near-term cash flow seems to model which Australian have you know you know run with for for for decades but it's not necessarily a Canadian um company thing so are you are you seeing that is that partly why you're looking at the conversations around you know tailings or maybe trying to work out how you can of drive to earlier Revenue flight um no not really because I I believe this will be again a large scale line and so when you're building large scale mines as I said when it was in production we for it average 300,000 ounces per year I don't know will be at that level but we'll certainly be over 100,000 ances per year so uh you you have to optimize that I think what you're talking about that model of um sort of bringing smaller scale or incremental production online and bootstrapping yourself up I think that model was tried a few times in the past and I think it it it has failed and that's why the Canadian Market doesn't really embrace it and what tends to happen is by in the timeline by the time you start doing your incremental uh the markets pick up because it's a cyclical business and then suddenly what you did was inappropriate for the the market by the time you get there right okay it be interesting to see how the the companies that are trying it see how they get get along um next year then I hope you're right about the cyclical nature of of the gold market obviously go price doing its thing for sure um but the cost of the capex component is still high off the back of inflation just to address that a bit though Matthew um I mean I was down at Beaver Creek and a lot of the conversation was yes it was tough to raise money but but part of the issue was um that the that the the price the valuations that our companies are getting is it's not reflective of our assets and some of my large shareholders they've told me Elaine don't look at the market it's not reflective of your asset so we've been hesitating to raise Capital at at very dilutive prices so that's that's been a lot of the incentive of why I've been very conservative of you know I have a Scottish Heritage what can I say but you know still make the dollars go a long way um so I mean it I didn't we didn't want to finance at those prices because we did not believe we know what the asset is and we did not believe that that was reflective so basically you take your money and you uh you know what I say is uh high impact low cost and really f focus on that and that's what we've done and if you look at the drilling we've done um the last uh every hole we've announced the last six years six months has has hit it out of the part they've all been very significant for our deposit and for our advancement um and that's again lowc cost high impact the way we've been operating well tell me tell me a little bit more about them because you get if you if you try to get that do that dance as it were to get that balance right between you know not ra raising dilutive capital and you know certainly not at at these levels because I think yourself many cosos will claim they're they're undervalued and and I think it's largely true in the Market at the moment is how do you decide how you allocate that capital I I see what you mean about this of high impact tring you're sort of you're talking about you know you know five to nine grams over you know reasonable intervals there which is obviously very different from the the um the measured and indicated which is you know you know War .4 you know 1.7 1.8 level so how are you going about targeting your Drilling and your modeling for for the trolling that's a good question I mean I guess the other advantage of on a being on a brownfields project is uh someone uh was kind enough to make sure that all of the data was aggregated and and uh uh compiled uh and so in fact we inherited a massive database of of things that goes back to even the 1950s a very famous company Anaconda was down working on this property and put a few little shafts down in there I have the drill logs the original written drill logs from the 1950s so we I mean the first step we did when we hit this project was basically uh put it all into a standardized modern GIS database system so um I would say that we've been able to be as effective as we can because um we and and with it with respect to the historical mining we actually have all the Blas hole data from the pit it's like 1.2 million data points so so we have modeled all that so I would say between that and our work what you do in a lower price a lower uh you know a less uh uh environment where you can raise a lot of funds is you you you model and you think a little harder and you use people that are veterans in the business and so I mean that's uh you know we if you have lots of money you just put your four five 10 drills out there and you start drilling if if you have less money you make sure you put those drill Halles in the right place that have high impact on your resource and that's what we've been doing and and that's what a lot of the good companies have been doing uh the junior companies you'll see they're still getting good results but they're spending a lot less money and it's because they're they're really tapping into Data Systems and is it a case of you know not biting your time per se but it's a case of you know putting enough news out there to make people feel that you're you're advancing but at the same time not blowing through the capital structure so you're sitting around you know wondering well who's going to give me some money next so how so how many drills are turning for you at the moment so we had three drills on the property um but we're doing a an updated resource right now so we usually stop drilling assemble your your assays and all your data hand it over to your independent QP and that's where we are right now so we don't have any uh the drills are on the property but we we stopped drilling to do that resource right okay and and that that resource obviously will will be bringing some of these um well I assume I assume they'll be bringing some of this latest uh these latest assays that you've been putting out up until December will it yeah yeah yeah that basically incorporates those um but the purpose so we've done two 4311 resources uh two years in a row um but this one is more focused uh at like we we're also starting a paa and so the paa will you know like all peas you really rely on the performance and and what it looks like in the first two or three years because the first two or three years of a mine uh you know that's that's when you want it as robust as possible that's when you know you don't want anything to go off the rail so a lot of the drilling we did this year was actually focused at where we we believe mining would start which is at the West end of our wi not deposit and why we would start there is that is uh outside of the past producing pit and so our drilling really focused there there and uh right from the first hole we put in it was it was good surprises our our first hole in the West End there um this year um there was a visible gold in 38 places across 300 meters you know we H 4.07 over 31 meters and and there were two intervals of 10 meters of over two grams so these are fantastic results so um the purpose was not of this program was not so much to prove the expansion of that 2 and a half k deposit it was really to focus down on where we're going to start mining first to support our paa our pre preliminary economic assessment right okay and the language you're using is one of confidence in the sense there's a lot of historic data there's a lot there's a lot known about the yet minology the massery to degree and I know you again do do some Advanced engineering studies um to kind of back up on the you know tailings and methology I think you mentioned so water as everything that you need will it be a case of the Pea will be good enough to get you into position to mine or will there be further economic studies required well there'll be more and and we'll have to do additional drilling for sure um okay but I think you know one of the reasons to do it is there's a couple reasons to do it one is is to just uh prove to the market that there is a you know it gives kind of a base economics we believe that deposit can be expanded by at least 50% or more so in that sense it's not going to be the ultimate economic it's not going to be what's going to be the pref fees we believe that deposit will be a lot larger but it will also and remember this is a past producing mind so it'll be able to answer the questions people have like can you reuse the tailings existing tailings you know what's it going to cost to expand them how much do you have to expand them um just you know again uh putting a pin in the metallurgy we know that we're actually our our deposits are extensions of the past line deposits so therefore it will be the same uh Metallurgy you know we're going a little deeper on some of them so you you will we will have to do some metallurgical test work but but that'll answer some of the questions for for investors that we can't really definitively answer to them now so for example like when this was in production um you know it was 93 to 2005 um it was a conventional carbon P Mill um basically the recoveries were 92 93% um from that uh included in that it was about uh 32% was gravity circuit so the question is you know since then in the last 20 years you know is it are there new technologies you know Mills are pretty conventional still but probably the gravity circuits can improve and so it it'll just allow us to answer some questions to investors uh that I think we need to have a technical study behind us does that make some sense yeah yeah it it it does I'm just sort of I guess one of the kind of questions uh are you right we okay the market is cyclical but and at at at the moment so we kind of sort of risk off and you got some nervy um investors looking as to where they should redeploy their you know after taxation where they should redeploy their their Capital into more more certain projects so for you I think you're talking about doing I think previously about doing 20,000 MERS of drilling different types of drilling to give you certainty around different um parts of of the pit and and obviously answer the questions the PA is going to need but um where's to do that it's going to require money and I guess the question people be asking mostly like how long is the process that you're laying out going to take and you know when do we get to when would there be a revenue opportunity or is your exit different is your exit we will then hand it over to someone who then goes and builds this thing out um I there was a lot of questions in there m what's the future look what's the future look like for you that's where I'm going yeah so um I I mean I guess the good thing about uh about these types of companies is the goals are the same so whether or not this company transforms into a a company that you know builds a mind we we hire management that have uh you know the the skills to build a mine and and operate a mine which are not my sweet spot uh I've obviously been involved with mining operations but that's not my uh we would have to expand the management team I think the more likely destination Destiny for this project um would be you know we're already at 3.6 million ounces uh we have Road access we have you know you you know that historically there was an economic deposit there um at a $400 gold price um so I I mean I every mid-tier and large company is looking to expand and as we all know uh organic expansion only takes you so far and and the larger the company the more difficult it is so most mid-tier companies are constantly trolling looking for you know three five million ounce projects I think in because most companies would be making a first entry into Guyana that you have to have probably four or five million ounces and and a clear path to production to attract that type of uh an acquirer um it only makes sense because they're they're entering a new uh jurisdiction that they don't have familiarity with the prize has to be appropriate so I I think that um we'll continue to kind of do to expand the resources at the same time as we nudge the engineering forward so the paa is the first stage I guess the other thing is um you know we would like to apply for a mining license in Guyana and that that that pea and some of the studies we do were doing we believe will will take us in that direction and in in expiration and Mining it's all about der risking a project and so advancing towards a mining license will drisk our project um right okay there's a there's a okay there's there's a the I guess the standard process will will will be followed um the bit of the question in there which was around money to do this drill program Dr various drilling programs um you're going to be going back to the market um for that anytime soon um probably we've been I we did our last financing last December um I have sufficient funds to finish the P the uh resource that's underway and then the paa in quick succession so we actually are kind of running parallel we're doing the paa as well but um obviously the base of that paa will be this this updated resource that we're doing so uh we expect that paa probably mid-February somewhere around there okay so we have sufficient funds to get get that there and we believe that that should uh again give our our valuation a bit of a boost um we we have a a fairly strong um set of uh shareholders many of them who um like they believe in the fact that this was a past producing mine there's resources there's there's a a road to it there's there's so many things that are in its favor that there's a lot of those people believe that this will be a mine again and so um they are quite willing to put money in it's just uh as I said like I'm not in the unique position there's other good companies out there with great assets that hesitated to finance because the it was too dilutive and so we will you know I'm actually extremely optimistic you haven't asked me about the go you you probably follow the gold price but I mean the the gold price has been over $2,000 for a while now and uh really appear is to have a tangible like base to it um you know all the signs for the economy for the new year um suggest that it's it's more of a risk on um and further to that you know a lot of the news is focusing on the fact that the resource sector is is underloved and um you know and undervalued so I I do believe that 2024 I mean uh is going to be a very very strong year for the for for mining for junior equities as well um you know I always say uh hope is not a strategy uh but you know we do seem to be extremely well positioned you know and you know I think it went from the feds were talking about you know the the forecast are for two interest rate uh declines and I think that just went to four you know if the interest rates come down and you know it's a slowing economy uh everything's sort of voting well for for gold having a good 2024 yeah and not we'd agree with that one we we violently agree with that one um just just if you don't mind just finish off lend us your thoughts on the political posturing by the neighbors next door in V Venezuela I think most people discount it as political posturing what's what's been your view you you're closer to it than I am yeah it's uh I mean I I guess it I even when I uh first went to Guyana I mean I'd heard about it and uh I I think it is definitely an in it's an intern U kind of blustering uh by Maduro to his electorate uh that is the fundamental basis of this whole thing and uh you know just for context uh yeah Venezuela has uh claimed that they have the rights to two3 of Guyana and this is not new 125 years ago uh the international court of justice in France um did a did a trial and said yes it's it belongs to Guyana and so this issue has kind of gone to sleep uh over decades and decades and decades and and occasionally it rears its head but but right now there is an election in Venezuela in October of next year and Maduro is he's lost a lot of popularity um there's seven seven million people have immigrated from Venezuela we've always heard we've all heard about that uh the economy is dismal um you know so it's like a typical uh National pulling the national uh sentiment together and let's start a war and all this sort of thing so it got diffused fairly quickly and um there we could do a whole separate session on this because it is a fascinating thing but um you can see that there's subtitles in here you know for example you know Biden has been reducing has has been removing some of the sanctions and that is to provide uh that's against some incentive for madoro to run a fair election in in Venezuela next year um uh the Venezuelans just Rel released some prisoners uh that Biden had negotiated for so there's all sorts of subtitles but bottom line for Guyana is uh you know what what stimulated this was the spectacular oil discoveries and um like just going you ask you talk about Venezuela and you have to talk about Guyana so I I mean it was had been coined the poorest country in South America till like 10 years ago or and in 2015 when they discovered offshore oil Exxon and a Consortium started working and now they're ranked the 10th largest uh accessible oil uh resour reserves in the world uh their economy is the fastest growing the GDP growth in 2022 was 62% uh 2023 forecasting for probably 100% so um now it's starting from a low level but but it is the fastest growing economy in the world and this is of course why Venezuela is now looking at the oil fields of Guyana say hold on you know 100 years ago you kind of put up her hand and said those are ours so it it's not as simple as that but um I'm not concerned um you know it has the both the Americans and the Brazilians have kind of uh stepped up and said you know hey you know we'll we we want to be in there so I think it's like being the tiny baby brother remember this is a this is a country with an 800 100,000 person population tiny tiny country uh English speak speaking which is interesting and easy for me um but at the end of the day um it's a baby brother when you've got two big brothers uh the US and Brazil saying hey we're there to help you yep I that that's actually quite quite a a detailed answer I've got a little bit more insight than i' I've had because we've spoken we've spoken to a few other gold produc gold developers in in country and um I think they would they would Echo your your um sentiment and your knowledge there El I appreciate you joining us today uh giv us that overview it would be lovely to kind of maybe get into the weeds with you on a bit more of a technical um basis so so see how you're viewing this and how how this um project continues to evolve um so I appreciate your time to do stand touch please we'll do thanks for your time Matthew

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Id: VRdO0F3rNAY

Length: 29min 30sec (1770 seconds)

Published: Sun Dec 24 2023