Categories: Precious Metals
Topics: Gold Stocks

Southern Cross Gold (TSX-V: SXGC)(OTC: MWSNF) CEO Michael Hudson on Hitting 12.2 m @ 32.4 g/t Gold at Golden Dyke

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, Happy New Year's. I have to believe that it is indeed a happy new year. You and I spoke roughly a month ago at which point Southern Cross Gold was being assigned a market valuation of roughly $1.6 billion Canadian. Today, just one month later, the market now assigns a value of $2.6 billion Canadian. So congratulations heck of a month. How is the new year treating you thus far, sir?

Michael Hudson: Happy New Year, Gerardo. It is quite the market. And as we've probably spoken about before, having a tier one discovery with tier one shareholders in a tier one market is the way to amazing wealth creation, and getting those things right is certainly what's happened at Southern Cross thus far.

Gerardo Del Real: Well, listen, let's talk some numbers and put some context behind why the market clearly, clearly is embracing the Southern Cross Gold story. You just drilled 12.2 meters at 32.4 grams per tonne gold at Golden Dyke. That included a 0.2 meter 1,050 gram per tonne gold hit as well. Now look, this is the best gold discovery at Golden Dyke. Talk to me about the growing system and then the connectivity of the system, which I know is important. And I know it's something that ... I've known you for some time now, but scale and grade and continuity is very important to you. This is showing it in pretty striking ways. Can you provide some context geologically there?

Michael Hudson: For sure. And those things matter, scale and grade, because they create ... If you can find something big and high grade, of course, that's the magic mix geologically. And continuity is everything around the mineability. And that's what you absolutely want to see. And when the wall of worry that every instance in any discovery, people start to take that next step. And very much, we're on that next step now, of that predevelopment project. So the mineability of this project is very important, hence why the continuity and the absolute weight of evidence that comes from 10 rigs poking lots of holes into this project is delivering in spades.

So this was one hole. And the headline was the best intersection in Golden Dyke. Now we've got a 1.4 kilometer system, which is part of a 10 kilometer system of old mines. We're focusing on the 1.4 with those actually eight rigs focused in that 1.4 and 2 outside it. And then we've got these old mines, and we fall into the trap of drilling these prospect names based on these old mines. And we're drilling below an old mine, which is the most prolific mine on the historic Sunday Creek trend, which was mined during the mid-to-late 1800s, predominantly. And Golden Dyke was down to 180 meters of mining in the day, so it was quite significant. So we left it later to test it because there was lots of near surface mineralization that we were drilling.

Now, we're drilling beneath Golden Dyke and the old timers didn't get it too wrong. The system is looking very good and looking good as its neighbor, about 300 meters east of it, called Rising Sun. Now we've tested rising sun down to a kilometer or more, and it's looking ... Well, it clearly is the best part of the system that this huge amount of very high grade gold has come out of Rising Sun. And Golden Dyke is only down to 600 meters at the moment that we've tested it. And the tenor of grade, and you see that you quoted the 12.2 meters at 32.4 grams gold and had 0.4% Antimony in that intersection as well, which included the 1,000 grams is looking at that tenor.

Now, these systems, two key points I want to make, and I know I'm taking a long time to describe this, but number one, these systems, these epithermal systems in Victoria, like we saw at Fosterville and the Swan Zone get better at depth. So we're just starting to get into that better part of the system at Golden Dyke. And Rising Sun got better below 500 meters, and we're just starting to see that at Golden Dyke. So we're just touching arguably the better parts of the system at Golden Dyke despite these very high grades that we're just getting in slightly above that transition zone. And then also what happened here is that we've drilled other holes in this press release that actually demonstrate that Golden Dyke and Rising Sun are one system. They join, and we've now joined that 160 meter gap between them.

So lots of very good things. We drilled eight different veins, and two were new, and we'd never seen before. So the grades are looking fantastic. The volume is increasing, and the continuity is there, and there's so much more to discover in the detail if you look and if you delve down into this press release.

Gerardo Del Real: Can you touch a bit on the Antimony? Because I know that's been a pretty important contributor, not just economically obviously, but geopolitically the situation gets more dire and complicated by the day. And I have to believe that having that significant, significant contributor to the economics, it being a critical metal is something that's valuable, again, not just in terms of metal value, but in terms of strategic value.

Michael Hudson: This is an amazing system. It's going to be a plus 10 gram multimillion ounce system is where we've given the guidance around our exploration target with about 80 kilometers into it earlier last year. And, of course, we've done a lot of drilling since then. So this is an incredibly high grade system, but it is also an incredibly strategic system. So it's got 20% recovery, 80% in the gold, which is great because then we're front facing the gold price, not the Antimony price which can and will be manipulated as small markets are. And China and Russia control plus 80% of mined and processed Antimony. And Sunday Creek will be one of the top three Antimony projects globally out in the Western world. So it will play a very critical part in rebuilding a supply chain. Not removing China and Russia from the mix, because they do control the market, but the Western world has lost its ability to process and mines very little.

So Sunday Creek will be a key contributor to that. And we've got lots of discussions ongoing. We don't need to make quick decisions around the Antimony piece because it is so important. But we're into the US system, the Defense Industrial Base Consortium, we're members, and we're talking right through, and got lots of white papers in with the Department of War. And we're also talking with our own governments, of course, state and federal here in Australia, and right through into Japan, that does have the technology to process these things as well. So lots going on at that strategic level. It's only 20% of the mix, but it makes Sunday Creek an incredibly strategic and important resource that essentially is a critical metals project backed by gold.

Gerardo Del Real: You've been in this business for quite some time, Mike. I've been in the business for roughly 16 years now. It is very, very rare, and you know better than me, that everything tends to line up, right? The macro tailwinds with gold at 4,500, China dominating the Antimony supply, restricting it, geopolitical tension, a deposit that keeps growing, that's got scale, that's got grade, that's tier one and a tier one jurisdiction. I mean, I could go on and on. This is one of those few times where everything has absolutely lined up. It hasn't come by accident. A lot of hard work has gone into it. Congratulations thus far. Is this the single best win of your career as it relates to things just lining up one at a time? And again, I know a lot of hard work has gone into it, but a lot of hard work goes into a lot of projects that don't benefit from the kind of geological endowment, and then all the other tailwinds that this project's got going for it.

Michael Hudson: No, clearly it is by the numbers, Gerardo, in terms of there's not many multimillion ounce 10 grand deposits found on Earth. And this is a unique experience for me, being the custodian, essentially, of this amazing deposit, as well as just the alignment of all those other factors that you spoke to. I mentioned shareholders as well. The key ingredient in these companies is to build projects that have alignment of shareholders who see that this is going to be worth a lot more in their view, and they're holding and accumulating. And that's what we've been able to do from day one in this company.

And now scale really matters in our business with the passive ETF money and the index inclusions, which are just starting for us. We're into the ASX 300, and starting to see some of the TSX composite indices because we're dual-listed, and a real benefit there, come to the table. The GDXJ inclusion is a possibility in the next rebalance this year. So lots of other reasons around Sunday Creek because of that alignment that means that we believe that there's still so much more to come from this project and this company.

Gerardo Del Real: Looking forward to it, lots of assays pending, lots of drill rigs turning, lots going on. Mr. Hudson, thank you as always. Appreciate the time.

Michael Hudson: Thanks, Gerardo.