Categories: Precious Metals
Topics: Gold Stocks

Southern Cross Gold (TSX-V: SXGC)(OTC: MWSNF) CEO Michael Hudson on Drilling 559 Metres @ 2.1 g/t Gold at Sunday Creek

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Southern Cross Gold (TSX-V: SXGC)(OTC: MWSNF), Mr. Michael Hudson. Mike, gold is near $5,000 once again. There is a global rush to secure antimony. You, sir, are putting out 559 meters of 2.1 grams per tonne gold uncut and with significant, significant antimony credits. Congratulations on the latest bit of news here from a few days ago. I know that you've been extremely busy. You have a very well deserved market cap of nearly $3 billion and the perfect market for you and the team to continue to do what you've done which is continue to add value. I would love some context on this release. I told you off-air, I nearly spit my coffee out when I opened up the computer screen and read the release. It's just absolutely spectacular all the way across the board.

Michael Hudson: Well, it's very nice to be back, Gerardo, and Sunday Creek is a gift that keeps on giving. I can give all these platitudes to the project because it makes us absolutely look very smart. It's amazing to be custodians of one of the greater gold discoveries in the space in the last number of years in a gold market that we do have now and with the shareholders we do have. We've got 140 million bucks in the bank to drill 200 kilometers of drilling to drill out a substantial maiden resource. Every drill hole that we're putting into this, including what you just stated, is defining new structures as well as infilling existing ones.

So I don't have the press release, I'm away from my desk as we're talking here, but there was a number of high-grade structures that hadn't been defined before in that hole. So it's not just simple infill, it's infill plus discovery, and when you're drilling more than half a kilometer drilling, perhaps that's to be expected. That's what we're seeing at every point in this 200-kilometer drill program that we're finding more the grade stacking up where we've seen it before and it's showing continuity and at those very high grades which is what makes or breaks any high-grade deposit, you want to see it holding together and that it is. We've got 10 rigs on site today, so there's no shortage of news flow. There's something like 39 or 40 holes in the lab. We've got two rigs, one rig today, and two rigs shortly that will be drilling eight kilometers away. We put a whole half a kilometer below the main drill area that we've just been talking to, so another probably seven or 800 meters below that half kilometer intersection.

We're talking kilometers now around drilling in this deposit because it's big and it's only getting bigger. So a hell of a lot happening just on the drill out, let alone the regional exploration which is a quarter of our budget to test the 90% of this system that hasn't seen much drilling at all beneath the old mine. So a lot happening, and I'll let you direct me to the next point rather than continuing to get excited about this one drill release which is a part of a much bigger context.

Gerardo Del Real: Yeah. No, look, I think you captured the bigger context well. I am going to go back to the tree for a second, that tree being just the high-grade nature of some of the hits. I mentioned the 559 meters of 2.5 grams per tonne gold equivalent. You had a gold intercept that would be a great silver intercept, but it was gold. It was 1.3 meters of 670 grams per tonne gold equivalent. That's nearly 20 ounces per tonne of gold. I mean, just absolutely, absolutely ridiculous.

We've touched in the past about the importance of the antimony. Australia has now set up what I believe is a $1.2 billion critical metals fund that I believe is going to be the first of many globally, right? We're seeing the US continue to add to what I'm calling national resource banks. Australia clearly, clearly has a sense of urgency. Can you speak to the importance of the antimony and just how important it's been to be working alongside a government partner? Because both you and I know what it looks like when we're working to try to get alongside a government partner, and I'm trying to be polite and courteous there.

Michael Hudson: It's the antimony or antimony, depending on which part of the hemisphere you come from, is 20% of the recoverable mix of this project. So just reminding everybody that it is a gold project but has a substantial antimony byproduct, and actually the inventory, now if we look at our exploration target, drill constrained, it places Sunday Creek in a top three position already, and it's only getting bigger as we've discussed in the ex-China world for antimony deposits. So it's big, it's significant. We don't have to front-face China on their pricing deck because we've got 80% backed by gold, so that derisks it in an incredible way, and as a consequence of the significance of the deposit and how it will help rebuild a Western supply chain for this critical metal, and you don't have a munitions industry without antimony, and today, China and Russia, Tajikistan control 90% of the world's supply chain.

Sunday Creek is a key part of that, and we're having discussions right through Asia, being Japan, right through North America, being your great country, right through our own country, the strategic reserve you mentioned only mentioned three metals essentially, antimony, gallium, and then the bag of rare earths as the key focus for that strategic reserve. So we're having in-depth discussions, and we've just got to find the right strategy on how we process the concentrate and where we process it, how we all work together, and how we use that strategic advantage to lower our cost of capital essentially to build this project and to help permit it too. I mean, gold will pay for it, antimony will help permit it, is the line we've used for a long time.

So we're in no rush because we have some time, but not a lot of time. Everybody wants antimony on the table yesterday, and it's taken me to some incredible places around the world already, and I suspect it will do so even more so and continue on this strategy. But we think strategically around the antimony piece and spend a lot of time on it disproportionately to the recoverable value mix.

Gerardo Del Real: I couldn't agree more. Look, it's been the perfect storm on the macro setup. It's been the perfect storm with what Mother Nature left behind. And then when you look geopolitically, just the rush that there is to secure these metals and the hedge that central banks apparently are in a rush to build in their own balance sheets, right? It's just perfect, perfect timing. You have, I believe, 10 rigs turning, assays pending. I believe you said you had $140 million. Is that the war chest?

Michael Hudson: That's right. Going underground with a decline that was permitted in four months by a government that is very much open for business, going to 22 rigs which will be the biggest drill out on a pre-development project I believe in the globe at the moment by the end of the year and that decline's complete. So much more to come. We really are at the very early stages of not only the discovery, but of course the development of this project, and we are staffing it to build it. We have Ryan Austerberry, who was the COO of Mandalay Resources, and he built and ran Costerfield, an adjacent deposit for 10 years. We just bought in the ex-CEO of Newcrest, one of our board members, one of the legends of the industry, Ian Smith, and it's attracting great people because it's a great project.

Gerardo Del Real: Well said. Mike, I suspect we'll be chatting a lot this year. Congrats again. Chat soon.

Michael Hudson: Thanks, Gerardo.