Categories: Precious Metals
Topics: General Precious Metals / Gold Stocks

Southern Cross Gold Consolidated (TSX-V: SXGC)(OTC: MWSNF) CEO Michael Hudson on Advancing the Multi-Million Ounce Sunday Creek Gold Project in a Tier 1 Jurisdiction

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Southern Cross Gold Consolidated (TSX-V: SXGC)(OTC: MWSNF), Mr. Michael Hudson. Mike, it's great to have you on. We are overdue for a chat regarding Southern Cross Gold. We have a new all-time high in gold, over $3,000. We have a new all-time high in antimony. You happen to have a whole heck of a lot of both, and you also happen to command a billion dollar market cap now. So congratulations on that accomplishment. It's been a heck of a couple of years. Great work by you and the team.

Michael Hudson: Thanks, Gerardo. But I should state that we're really at the start of this process, far from the end, and we're at an exciting junction no doubt in the business and the market because we made this discovery for its most part when we didn't have a market. And I always said, "Gee, I'd love to have a market to tell this story in," but certainly clearly there today.

Gerardo Del Real: Well, a lot has happened since the last time you and I chatted. You have been busy on the road at conferences working, doing what great management teams do, right? So since we've chatted, Southern Cross Gold has doubled its exploration target, right, with increasing grades at Sunday Creek. You've also announced the inclusion into the S&P and ASX Index, which is positive, obviously. And you started the permitting process for an exploration tunnel at Sunday Creek. So how are things coming along over there, busy, busy, busy?

Michael Hudson: Yeah, I know. A lot's happening and you really go for it when you are on a great discovery, and this is by many measures, one of the best discoveries, if not the best discovery on it. On a drill measure basis, you know, we're hitting, we've got 60 individual intersections greater than 100 gram meters gold equivalent with 70 odd kilometers drilled. So that hit rate, you know, 60 divided by 70 basically is giving us a hit rate that's better than anything else that I can see globally.

But that alone is not where we're at. When you talked about the exploration target doubling, so that now sits at 2.2 to 3.2 million ounces at 8.5 to 10.6 grams equivalent. So we've got a multimillion ounce high-grade discovery. And ultimately what does that mean? It's a very, very, very rare asset that, you know, ideally, and our aim is to produce the highest margin gold business globally. And there's very few opportunities, in fact, not many that I can see in Tier 1 jurisdictions that are multimillion ounce high grade, around that 10 grams, that are owned in a pre-development situation by a single junior company.

So that makes this asset extremely rare, especially here in Australia over the last week, you know, Spartan Gold was taken out for an incredible valuation, you know, upwards of $900 an ounce in the ground resources. So that just gives you an idea on where this can go just on a resource base as we start to drill this out, let alone where it's going, as we continue to de-risk it and put those exploration declines or tunnels in, etc.

Gerardo Del Real: You continue drilling, you're being aggressive as you should be right now. How is that coming along? How many rigs are on site?

Michael Hudson: Yeah, we have six rigs today on site and another two coming within the next few weeks. So we'll have eight rigs turning furiously and making lots of discoveries. Basically four rigs are looking to expand the exploration target area, if you like. We're only about 5% of the way into our trend of old mines that we're drilling under. So there's a lot more to come without a doubt, from creating a bigger system. So four rigs are doing that.

Three rigs in-filling areas that we've drilled. So we can start to continue to build ounces and convert from the exploration target to the resource that we're running internally. Without a doubt, we've got the same resource team that's working at Fosterville, which is the key analog down the road, and also Costerfield, the same team that runs the resources there are running the resources here at Sunday Creek.

And then one rig is looking along the larger 12 kilometer footprint that we have, and we are doing a lot of work there. I'm looking for another one of the repeat of these systems over the next year, because that will be a major torque on the project as well.

Gerardo Del Real: I have to touch on the antimony because if memory serves me right, the antimony contributes about 20% of the economic value thus far. Is that accurate? And you know, antimony is at all-time highs. It's definitely gotten the attention around the world and you know, it's great to have all that gold. It doesn't hurt having all that antimony as well.

Michael Hudson: No, without a doubt that simple line is, "Gold will pay for it, antimony will help permit it." And we're seeing that this is one of the key antimony discoveries ex China and Russia. It's the 2nd or 3rd-largest antimony projects in the West as we can... well, where it is today with that exploration target, it already benchmarks there and it's only getting bigger. So it's a key part of re-establishing a supply chain in the Western world for antimony.

And along with some of our peers, we're only 60 kilometers from the largest antimony producer in the West, which is Costerfield, which, you know, it's a relatively small part of the supply of antimony, about 1.5% Of the world's annual supply.

But that just goes to show that they're quite small deposits around the world. So that goes to the constraint of the metal and this is where we're at various levels of government through the U.S. and Japan and here in Australia trying to find the solution. And ultimately we hope from a commercial point of view, it'll go to lower our cost of capital in terms of building this project by doing something sensible with that antimony 20% in situ value that you referred to.

Gerardo Del Real: Well, listen, I would ask what comes next, but with eight rigs and assays pending and the kind of grades and hits that Southern Cross keeps delivering to the market, I think that pretty much answers itself. Anything else to add, Mike?

Michael Hudson: We've just got a wonderful shareholder base, and I'm not saying that to be a sycophant. This is a perfect discovery that is one of the best, if not the best gold discovery in a gold market that, you know, is unprecedented in terms of the prices that we're seeing for gold now. But it's also a perfect storm with the perfect shareholder base that's uber focused on per share value outcome.

So everything we do from a strategic point of view is very much focused on adding to the share price appreciation, not just the market cap in isolation. And those shareholders at Darren Morcombe, Pierre Lassonde, is one of the most famous value investors in the space. Kiril Sokoloff and a group of people who hunt with them, if you like, who own 30%. And then about 25% of the stock is held by some of the world's largest institutions that are there for the long haul, also. So an amazing shareholder base, which is also critical to any company to make sure that it's a success.

Gerardo Del Real: Very well said, sir. Couldn't agree more. Mike, pleasure as always. Thank you.

Michael Hudson: Thanks, Gerardo.