Categories: Precious Metals
Topics: Gold Stocks

Southern Cross Gold (TSX-V: SXGC)(OTC: MWSNF) CEO Michael Hudson on Milestone Metallurgical Breakthrough 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, great to have you back on. You have been on the road presenting for Southern Cross Gold, deservedly so. How is life? How are you, sir?

Michael Hudson: Life is pretty good. We've got one of the few high-grade around 10-gram multi-million-ounce discoveries in a tier-one jurisdiction. There's few peers and we've got a ripping gold market. We've got nine rigs drilling and we're permitting lots of different things and building the system, continuing with the exploration and doing more evaluation work at the same time, trying to build the company through both market and fundamental value.

Gerardo Del Real: Speaking of fundamental value, you just had a big, big de-risking piece of news here recently that I think that you put it out yesterday, but I think it kind of went over a lot of people's head. The release reads, Southern Cross Gold achieves significant metallurgical development at Sunday Creek Gold Antimony Project.

I would love for you to give me the educated overview because even to someone that isn't a geo or a metallurgical expert, it screamed big-time de-risking moment for Southern Cross, right? And so I would love for you to kind of explain that to the audience why this release was such an important milestone for the company.

Michael Hudson: It was a very big risk-off news release and perhaps the detail is hard to understand, but simply put, this was the second series of tests that we put out first, a batch of sighter tests last year, which demonstrated that this gold antimony project could produce, well, it was free gold number one, greater than 80%, free gold. So it had a gravity recovery up front.

And then we recovered high values of gold and antimony into a float concentrate, either selective or bulk. So that was a first up, which you always need to do in these deposits early on to determine that you have a potential flow sheet and potentially can create marketable product. Then we had a few more things to do and there's always more things to do in anything in mining, but absolutely more things to do on the metallurgical front.

And that's maximize the gold into the gravity because that's where the payabilities are much higher and make sure we could produce a very clean antimony gold concentrate. And that's what this second stage work did. So the first stage had literally kilos, and now we've got hundreds of kilos of samples across lots of different parts of the mineralized body. I think there was 144 intersections and 140 kilos of rock.

So a much larger test, much more comprehensive with the knowledge of the first round of tests to direct us. And what we found is that we can produce three products from this deposit. The first is the gravity gold, and we're getting 30 to 50% gravity recovery, which is great. And then the second product is an Antimony gold product, which is very low in arsenic.

And that was the breakthrough that we found here, is that we were able to separate the arsenic, which is held in just pyrite, fool's gold. And we were able to suppress the pyrite floating with the antimony. And that led to a very clean, marketable, and will be a highly-valued product globally because these low arsenic concentrates are rare in the antimony gold world.

So that was a big breakthrough. And then the third is an iron or pyrite gold concentrate, which only takes 10 to 15% of the rest of the gold, but it is leechable because of that free gold component. So overall gold recoveries from 92 to 96% basically, which is very, very good into three what looked like very marketable products.

Gerardo Del Real: No, listen, excellent work. I cover Southern Cross in one of the paid newsletters over on the Digest Publishing side of the business. And look, we're obviously happy. We're up some 600% on the position. We've held it for years. It's paid off subscribers, I could tell you have written in thankful for the brilliant execution.

And every month I provide an update. And so my update every month, the last six to nine months has been a lot of the same. I said, "Another month. Another month of high-grade hits from Southern Cross Gold. Expect more of those, expect a higher share price and expect the company to continue to execute beautifully on the technical front."

So with that being said, what comes next? What can shareholders expect here in the coming months? Because I suspect that gold continues to rip higher as debt levels become more and more unsustainable, and not just here in the US but led by the US, right?

Michael Hudson: Absolutely. And no doubt we have a gold market, but we've got a first quartile deposit project developing into that market. We've just raised 161 million Australian dollars to execute a very strategic and thoughtful program, which is a drill-out of a core area that we've already already put an expiration target around of 2.2 to 3.2 million ounces at between 8.6 and 10.6 grams gold equivalent.

So that's infilling that exploration target so we can put it into a resource. That's 200 kilometers of drilling, that's 60 million Australian dollars alone that we're permitting a decline that will cost $30 million and that brings drilling quicker. The faster we can develop this project, the more valuable it is, the time value of money. And that's the big factor we can control at the moment.

So we want to drill it out as quickly as possible and the decline will help that. It will also take risk off the table, further risk as we progressively permit this project. So for example, flora for fauna and water, etc, are all issues we dealing with and quantifying to have this decline permitted. And then you never forget your exploration upside.

That's what creates market value and what the drill bit has delivered all this value to date in Southern Cross, and we've got $20 million to explore the further 90% of the trend that hasn't been touched and also below the system that we haven't yet drilled. So we're deep, we're at a kilometer, and we know these systems get better at depth, and today we're drilling our first hole that's nearly a two kilometer hole that will intersect the mineralized body ideally, or at least the extensions of what we hope is the mineralized body half a kilometer below the current drill out.

So there's a lot of things happening as we speak, both, both fundamentally, but we're also cognizant of making sure we can continue to expand this system and demonstrate just how big it can get.

Gerardo Del Real: No, listen, exciting times as usual with Southern Cross. It's worth noting because obviously you're a prime takeout candidate. It's worth noting that the shareholder registry is amongst the best in the gold space. Can you speak to that before I let you go, Mike?

Michael Hudson: Yeah, we've been fortunate. It's a real master class I have with the expertise around me and what I've learned over the last few years, Gerardo, I've been around for a long time. We've been good friends for a long time. So the gray behind my eyes, but you never stop learning. And I've got the greatest value investors in the gold space globally, without a doubt around me.

We've got Pierre Lassonde, who founded Franco-Nevada, who ran Newmont and has been involved in multiple billion-dollar discovery stories, and his name doesn't need introduction to the North American market, perhaps like it does more so in Australia.

We've got Darren Morecambe who works very closely with Pierre and has for a long time, and he's an amazing mind and Kiril Sokoloff who runs 13D Research, and they've all known each other for a long time and people around them own 30% of this stock.

We've got 25% of institutionally held, which is by some of the better institutions globally. You can look at that holding on our latest press release on our web page. So an amazing base of over 50%, closer to 60%, amongst those groups there alone.

And then of course we're dual listed on the TSX and an ASX, so we have a great liquidity. We're starting to see index inclusions, which changes the story of these explore codes that move up into the larger market cap world. And we see a lot of passive buying coming into the stock, which has changed the investment world, and that's where we're just starting to see in this stock as well, which is a key point to be made.

Gerardo Del Real: Fun times, have a market, you have a world-class discovery and a lot of runway to grow that. Thank you for your time, Mike. Appreciate it as always.

Michael Hudson: Thanks, Gerardo.

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