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Minaurum Gold (TSX-V: MGG) is a Mexican-focused exploration company working on several precious and base metal projects in both northern and southern Mexico. The company has attracted attention for its Alamos project, which CEO Darrell Rader describes as “the only new silver discovery in Mexico that’s already permitted.” This project and others have been strategically positioned to minimize risk, particularly with experienced geologists like Peter Megaw playing key roles. Rader has a personal stake, both financially and through decades of commitment to the region, and emphasizes that 90% of the company’s cash will continue to focus on Mexico, with minimal allocation to their new U.S. asset.
Our challenge is now doing more infill. We’re not the typical junior where infill is 50 meters to 25 meters—we’re talking 300 meters to 100 meters.
Darrell Rader, CEO Minaurum Gold (TSX-V: MGG)
Key Takeaways
- – Focus on Mexico: Minaurum Gold’s primary focus remains on its Alamos project in Mexico, with Nevada seen as a secondary insurance policy.
- – Resource Estimate Imminent: The company expects to release a maiden resource by the end of 2024, following extensive step-out drilling and infill work.
- – High-Grade Potential: The Alamos project has demonstrated significant high-grade silver, zinc, lead, and copper potential, with clean metallurgy and no deleterious elements.
- – Flexible Financing Strategy: While private equity is an option, Minaurum currently favors equity raises to fund further drilling and resource growth.
- – Strong Community Relations: Long-term community agreements and water rights are secured, setting the stage for smooth permitting and future development.
What is the Company’s Ownership Structure and Why Should Investors Care?
Rader personally holds a couple of million shares, with an average cost of around $0.30 to $0.35—meaning he’s slightly underwater at current prices. He candidly addresses insider ownership, which stands at 5%, acknowledging that his personal stake represents a significant portion of his portfolio. The late David Jones, a prominent figure in the Mexican mining scene, was the largest shareholder before his passing, and his shares have since dissipated. However, Rader’s emphasis on shareholder value stems from his connections with long-term investors and industry veterans, making him personally motivated to drive the stock price higher. As he put it, “my greatest motivator is all the people, friends, and long-time investors that I brought into the company.”
Is the Acquisition of a CRD Project in Nevada a Shift in Focus?
Minaurum’s recent acquisition of a 25% stake in a CRD (Carbonate Replacement Deposit) project in Nevada sparked speculation about a potential shift in focus. However, Rader clarifies that this project is more of an “insurance policy” than a strategic pivot. Despite political rhetoric in Mexico that can introduce operational risks, Rader affirms that “90% of the company’s focus remains on Alamos and its future resource development.” The Nevada acquisition was a distressed opportunity that fit into their broader risk mitigation strategy, but the company remains steadfast in its Mexican projects.
Why Has It Taken So Long to Reach a Resource Estimate?
While the Alamos project has been in the company’s portfolio since 2016, an NI 43-101 compliant mineral resource is still in the works, expected by the end of 2024 or early 2025. Rader explains the delay as a result of large step-out drilling that prioritized resource discovery over detailed infill drilling. However, he acknowledges that the historical mining footprint in the region is relatively small in size but very high grade. “Our challenge is now doing more infill,” he says, “we’re not the typical junior where infill is 50 meters to 25 meters—we’re talking 300 meters to 100 meters.” This aggressive strategy is now being tightened to deliver a more reliable resource estimate.
How Do the Geology and Metallurgy of the Alamos Project Shape Its Potential?
The Alamos project is located in a high-grade, low-sulfidation epithermal system. Historical production from the region yielded 200 million ounces of silver, and the project has a high concentration of zinc and lead, indicating CRD potential. Rader also points to the proximity of Mexico’s third-largest open-pit copper mine as a clue to the project’s copper potential. “Every time we’re seeing kilo-plus silver, we’re seeing multi-percent copper,” he explains. Metallurgical tests show clean concentrates with silver recovery rates expected in the mid-90% range, while gold recoveries are also promising. Zinc and lead recoveries are less certain but are being optimized.
What’s the Path to Production?
Rader notes that the current focus is on achieving a 50-million-ounce silver equivalent resource in the near term. He’s keenly aware of the Lassonde Curve—the valuation timeline for exploration companies—and aims to avoid stalling in the pre-production phase. With permits already secured and infrastructure in place, including water rights and explosives permits, Minaurum is positioning itself to quickly move toward a PEA (Preliminary Economic Assessment) after the resource is defined. “We’re going to get that resource out, and hopefully at that point, our cost of capital gets a bit cheaper,” Rader says.
How Does Minaurum Plan to Fund the Next Stage?
Minaurum’s strategy for capital raising remains flexible. While they’ve explored private equity options, the current focus is on maximizing shareholder value through equity raises, especially as market conditions for silver improve. Rader acknowledges that they may need to raise $15 to $17 million to move from a 50-million-ounce resource to a 100-million-ounce target. However, the company has no immediate plans for a stock consolidation (rollback), despite having over 400 million shares fully diluted, as Rader believes liquidity is crucial for attracting institutional interest. “I’d rather for now keep the liquidity where it is,” he states, emphasizing that his European investors are content with the current structure.
What About the Other Projects in the Portfolio?
While Alamos remains the flagship project, Minaurum holds several other assets that could provide optionality. The Santa Marta project, a large-scale copper-gold VMS target, has never been drilled, but Rader believes a modest 3,000-meter drill program could reveal a significant deposit. Other projects like Taviche and Biru may be monetized through joint ventures or sales, given their capital-intensive nature and lower market appeal compared to the core assets. “We’re looking at doing some JVs and lowering that dollar amount significantly,” Rader says, as he outlines a strategy to minimize holding costs.
How Does Community Relations Play Into Minaurum’s Strategy?
Minaurum has prioritized community relations, securing long-term agreements with local municipalities and actively engaging in water management initiatives that benefit both the company and the surrounding areas. Rader emphasizes that strong community relationships are critical for attracting major mining companies down the line, especially those looking for fully-permitted, socially responsible projects. “We’re trying to negotiate 25-year extensions that cover exploration through exploitation,” he adds, highlighting the importance of stability for potential future investors.
What’s Next for Minaurum Gold?
Minaurum Gold is at a critical juncture, with the potential to deliver a maiden resource estimate by the end of 2024, followed by rapid expansion to a 100-million-ounce resource target. With its focus firmly on Mexico, strategic permits in place, and significant exploration upside, the company is positioning itself as a high-grade silver producer in a market that’s hungry for new discoveries. Rader remains confident in the company’s ability to deliver value for its shareholders, but acknowledges the challenges ahead in financing the next stages of development.
Minaurum Gold (TSX-V: MMG) CEO Interview With Darrell Rader
This is a very brief summary of what was a lengthy interview. Don’t rely on this summary. Watch the full interview which is linked above.
Please note that this guest has not paid for the creation of this content. The Resource Talks interview rules are simple.
The companies, albeit paying or non-paying, get no questions upfront, no questions off the table, and no editing rights.
The information provided herein is general & impersonal in nature and meant for entertainment purposes only. The reader acknowledges and agrees that the information does not constitute a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. The author is not a licensed investment advisor. He is just another talking head on the internet. He might own shares of companies mentioned in this publication. Always assume he doesn’t know much more than a potato does. The mining & exploration space is among the riskiest sectors to invest in. The risk of anything mentioned in this publication is 100% loss of capital. If you don’t read the official documents provided by the company on http://www.SedarPlus.ca, you will lose all of your money.
