Categories: Precious Metals
Topics: Gold Stocks

Daura Gold (TSX-V: DGC) Director Mark Sumner on Expanding Strategic Land Package Next to Highlander Silver’s Bonanza-Grade Gold Target in Peru’s Ancash Region

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is a director from Daura Gold Corp. (TSX-V: DGC) — Mr. Mark Sumner. Mark, it's a pleasure to have you on. How are you today?

Mark Sumner: Yes, I'm doing great, thanks, Gerardo. It's good to talk to you again.

Gerardo Del Real: We chatted a bit off-air. Our group just got back from the Rick Rule Symposium — and look, there's capital that hasn't been interested in the resource space that all of a sudden is really interested in the resource space.

We have, on the critical metals side, the US Department of Defense stepping in. We have companies like Apple now taking direct stakes in miners. And I think — whether it’s gold or critical metals — anything that’s not dollar-denominated, or that’s dollar-denominated but looking to take advantage of a weaker dollar, is clearly in demand by more money than we’ve seen on the sidelines in quite some time.

Daura Gold has a tiny market cap. You just had some news this morning that I think marks a milestone moment for the company where you’re increasing the land position. It's very strategic, and I want to talk about that.

But before we get to that, can we talk a bit about your experience because your capital markets background — specifically in South America — is going to be pretty instrumental in advancing the company as you check off the milestone moments we're hoping to see the rest of this year.

Mark Sumner: Yes, I've been working in South America — Chile, Colombia, Peru — for many, many years, going on 15 years now. Peru specifically was really the first country in South America where I got started. 

I've been working on a number of different types of projects in Peru for quite a long time. We've drilled a lot of projects. We have a very seasoned community relations team. We've done a lot of community agreements. We've done a lot of drilling contracts. So yes, we’ve been working in the country for a long time.

Gerardo Del Real: Let's talk about the news this morning. You just expanded the land position with an agreement to acquire a very strategic and pretty robust 2,900 hectares adjacent to your Antonella project — and the Bonita target where Highlander Silver is executing extremely well on the social license side. They've had excellent results, and we’re expecting assays soon.

You’re right on trend. Their market cap is in the hundreds of millions. Your market cap is where today?

Mark Sumner: C$6.2 million.

Gerardo Del Real: Okay. And again, I just want to highlight that contrast and provide the context because that’s the opportunity. If you're able to execute on your community agreements, and you’re able to prove that the trend and structures continue onto your property — which, from everything I’ve seen, read, and spoken with the company about, you absolutely believe is the case — can you give some context there?

Mark Sumner: Yes, this is a really exciting acquisition for us because we’ve been in and around Highlander’s San Luis project area for a while building up a land package. We have Antonella, which is really exciting. It has those really high-grade, narrow epithermal gold and silver veins. But the target around Bonita — which is this particular land package — we just picked up about 2,900 hectares adjacent to Antonella and surrounding the Bonita target, which Highlander started drilling about a month ago.

The Bonita target has always been a priority area of interest for us because when SSR drilled the San Luis project a number of years ago, they put together a bonanza-grade resource of over 350,000 ounces at 22 grams per tonne Au.

Gerardo Del Real: Yes.

Mark Sumner: They only put two drill holes into Bonita. The highlight drill hole was 35 meters at 5.5 grams per tonne Au from about 19 meters, which really sets this target apart within the San Luis complex. Sorry, that drill hole was about 700 meters from our property.

Gerardo Del Real: Yes.

Mark Sumner: And so now we have Highlander drilling out the rest of this target, and we’ve just acquired all of this ground effectively surrounding the Bonita target. That gives us access to a pretty spectacular opportunity for exploration.

Like you said, community relations are going well. We’re expecting a community agreement very shortly, which will allow us to deploy the team. So we’ll be out there within 700 to 1,000 meters of Highlander’s drill rigs running a detailed mapping and sampling program where we’ll be mapping these veins at surface.

We’ll also be doing some geophysics to map the veins under cover, and it’ll really help us refine our drill targets for our applications.

Gerardo Del Real: For those not familiar with the region — and I’m pretty familiar with the project; I’ve known about it since 2009-10 — but for those that aren’t, can you give a quick overview of your ability to work there? Specifically, how many months out of the year can you actually drill there because that’s important, right?

Mark Sumner: Yes, the rainy season will last about four months, which will keep us out of the area. Our aim is to get our DIA consultant out and get our DIA filed in the next two months or so, which would allow us to start drilling next year. So we should hit around July or August with drill permits in hand to get out into the field and start drilling. That’ll give us a nice bit of runway to get those rigs turning.

Gerardo Del Real: And in the meantime, you get a better look out the window with the Highlander assays, right, because you’re going to have a much clearer picture of what the mineralization looks like, what the grade looks like, and the structures and systems they’re hitting on.

Mark Sumner: Yes, correct.

Gerardo Del Real: And I have to believe that’s going to inform a lot of the geophysics work you’re doing to really delineate those targets. 

Mark Sumner: Exactly. The timing couldn’t be better. They started drilling a little over a month ago, so presumably those assays are coming shortly. And the timing is ideal because we’ll be preparing to send our team out into the field probably in August.

They have the end-of-July holidays within the communities with a number of festivities but once that wraps up, we’ll be in the field in August and hopefully with some of those drill results in hand.

Gerardo Del Real: If the results are anything like the prior results — which is why they have a market cap in the hundreds of millions of dollars… and this is still very early, and I always get accused, rightfully so, of being the optimist in the group — but I have to believe that with your land package and with the properties right next to each other, they have to be looking at you — at the C$6 million market cap — and thinking, what would be better than just keeping on drilling our property? Why not go and buy these guys at a substantial premium, right?

Mark Sumner: I would think so. We’ve completely engulfed the Bonita target with our new acquisition. So we have premium ground. We have some of that historical drilling at Antonella, which confirms those high-grade veins.

There’s a lot of follow-up work to do — data optimization, those types of things — that we can do to add value to the projects in the meantime. But absolutely, we’ve now consolidated a pretty substantial land package. We’re sitting on just under 16,000 hectares in the Ancash region. A lot of that ground is in and around the San Luis complex.

We picked up the Yanamina Project just north — about 40 km north of San Luis — which is another really exciting prospect. It brings a little over 200,000 ounces into our resource profile. It also gives us an opportunity to go out there and test some of the drilling upside at Yanamina.

There are a number of targets that need follow-up. It’s only about 3,700 meters of historical drilling at Yanamina but there are pretty spectacular results to build on: over 30 meters at 6.5 grams from surface, and 37 meters at 5.5 grams from surface. So there’s a good amount of drilling to do up there as well.

Right now, that’s a community relations effort. We’ve already started engaging with the community to begin working on the social license. Our guys in the district are as good as they come, and they’ve been fantastic. We’ve been successfully securing community agreements all along so we’re really enthusiastic about that too.

But when you put all of that together, we have a spectacular land package. We have Barrick all around us in the northeast at our Tayacoto prospect, which we haven’t really talked much about… but we will. So there’ll be some news coming about that shortly.

Barrick is very active. Highlander is now drilling. It’s getting really interesting.

Gerardo Del Real: No doubt. Look, the money in this sector is made by buying early and buying right. And as easy as it is for most people to flip 20 cents or take a quick 100% gain, I’ve done the best when I buy early, buy right, and sit tight while the catalysts play out.

And if you deliver on your community engagements and you deliver on submitting that DIA, I think the rest likely takes care of itself one way or the other. Either you get to drill it yourself and prove it up — and hopefully you have what you think you have — or you might never get there because your neighbor might say, ‘This is a whole heck of a lot more valuable than C$6 million’ and make an offer that’s hard to refuse, right?

Mark Sumner: Yes, I couldn’t agree more. I mean, we’re in very good company. We have Barrick all over the district. Highlander is backed by Richard Warke, Eric Sprott, and the Lundin family. Like I said, we’re in excellent company. And like you said, at a C$6.2 million market cap, we’re a minnow but our land package sort of says otherwise.

We have an opportunity to really capitalize on that, and I think it presents pretty tremendous value for investors, especially now, getting in before the rigs start turning. Because once we get rigs turning on these properties, our view is that we’re going to see some spectacular results.

Gerardo Del Real: All good stuff. I'm looking forward to it. Mark, a pleasure, and thank you for coming on. Let’s do it again soon.

Mark Sumner: Sounds great. Thank you very much, Gerardo.

Gerardo Del Real: Alright, cheers now.

Mark Sumner: Cheers. 

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