Transcript: Banyan Gold (BYN) - $19M to Focus on Drilling and Increasing Grade

The Hyland gold project of the company is a NI 43-101 accredited resource, with an indicated mineral resource estimate of 236,000 ounces of gold equivalent (AuEq) and 288,000 ounces AuEq in inferred mineral resources. The AurMac Gold project of the company is a 173 km2 land package in the Mayo Mining District of the Yukon. The project consists of the Aurex and McQuesten projects optioned from Victoria Gold Corp. and Hecla Mining Company respectively, as well as additional claims by Banyan Gold Corp. The Nitra Gold project of the company is a 296 km2 land package consisting of 1,442 quartz claims.

Banyan Gold Corp. on the 22nd of December 2022 announced that it had concluded a non-brokered private placement for the gross proceeds of CAD$ 12.2 million towards the company. The private placement consisted of the issuing of approximately 12.9 million flow-through shares of the company at CAD$ 0.56 as well as approximately 12 million common shares of the company at CAD$ 0.40. The concluded non-brokered private placement resulted in the company having a cash position of approximately CAD$ 19 million at the end of 2022.

The company on the 10th of January 2023, released the assay results from 37 drill holes that formed part of the company’s 2022 exploration drilling program at the AurMac project. The assay results include highlights of up to 0.59 g/t of gold over a mineralisation interval of 62.2 m as well as 1.02 g/t of gold over 34.8 m.

Banyan Gold. Corp. plans to complete approximately 25,000 m of exploration drilling at the AurMac project in 2023 as well as commence with metallurgical test work and commencing with environmental baseline studies.

We Discuss: 

0:52 - Recap of the milestones in 2022

3:04 - Building the major components of the company

7:01 - Factors considered in figuring out the company’s next moves

11:19 - Plans in using the recently raised capital

15:09 - Reason for hiring extra staff in doing technical analysis

18:53 - Time frame for the upcoming resource update

19:42 - Plans in doing economic studies and the proper time for it

21:40 - Projections on the gold market in 2023 

23:41 - Outro

Tara Christie: Hi, Tara Christie, President CEO of Banyan Gold. I’m here to talk about Banyan’s exciting AurMac project. 2021 was a great year, we put out our 4Moz resource on our AurMac property. We've drilled 50,000m of which we've been announcing results steadily and continue to announce results and moving towards a resource update here in 2022. We're well funded, about to start exploration here again in March. It's going to be an exciting year, we've got a really clear plan on how to continue to add value for shareholders. And we've demonstrated that we follow up on what we say we're going to do. So great to talk to you again, here, Matthew and I look forward to your questions.

Matthew Gordon: Good to see you again Tara. lovely to see you again, happy New Year to you and all your shareholders. A few things I want to get into is obviously having a clear plan and of course, you've raised some money. But first, a little bit of reflection. For you, your share chart is unusual, so general trend is up for Gold exploration company, that is unusual in 2022 and 2021 quite frankly. What do you put it down to, what are the kind of moments last year which defined success for you?

Tara Christie: You know, it starts with getting good shareholders and when I took over the company in 2016, it already had quite a few shares outstanding. But I really had to go and go to the market and find shareholders who understood the story and were willing to invest in me and my management team. And so that was the start of it because the people that I've primarily placed in the financings are people that know this is a longer term game and understand where it's going. Then it's quality asset, that's another key thing. And then you got to have a plan as a management team and deliver on what you say you're going to do and we've done that. And the geology was there, we believed it was there, we put together a geological model. We've told people what we hope to achieve with the money that we had, we went out and did that and we were efficient. You look at our exploration costs $5 per ounce is excellent cost for an exploration company. It shows that we really are using our dollars efficiently. 85% of the dollars we raised to date have gone into the ground and exploration, so we don't have a big overhead. So I think that's really helped us to develop shareholder trust, along with getting the right shareholders in the registry.

And that's something you continually have to do is make sure you've got the right people behind you and communicate what the plan is so that people aren't disappointed when x happens, or surprised when y happens. It should be a pretty straightforward story. And sometimes we're criticised because our story is too straightforward. Okay, we're going to go here, we get there. Okay, next plan, we're going to go here, but that's part of what I think exploration needs to be is to tell a story and then deliver on what you say you're going to do.

Matthew Gordon: Right, okay, having the right shareholders and communicating with them clearly about what you're going to do and then delivering it, it does sound easier than it probably actually is. But the asset component, so you are 0.6g/t asset, 4Moz which is great. You're building real size there but again, there's an audience of people who think okay, well, low-grade Gold is hard to mine. So you've obviously got a nice base, but you want to get to build the grey component to this, so how are you going to go and do that?

Tara Christie: Well, I guess before we say low-grade, the thing that you need to have when you have low-grade is scale and that's something that we have in spades. But I guess, just look at the Powerline deposit itself. And remember, Powerline was a brand-new discovery in 2019. So we haven't had tonnes of time, lots of projects to get to 4Moz and get 20-years of exploration. Powerline 2019 was the discovery hole, 100,000oz in the original resource in 2020 and now just under 3Moz by our resource that we put out in 2021. And what's also really important when you have low-grade is strip ratio, 0.34:1 on Powerline, that is an exceptionally low strip ratio on surface that makes a huge, huge difference. So when you look at grade, you got to also look at how much material do you need to move to mine it which is your strip ratio. So yes, this is a hard deposit to find because we do not have what some other companies have, big exposure of rocks on creeks and hillsides. We have low rolling topography, which is great for mine building and kind of swampy, lots of cover, not a lot of exposure.

That makes a little more difficult so we've got to use our database, so finding that higher grade is hard. But if you saw our press release this morning, we're seeing two distinct trends at Aurex Hill and we can see these east west trends. We see it through Powerline and we're seeing that 1g material and we're really excited looking forward to what we've got from the results. We've got another group of holes that are 1.3km out to the east, which some of those are right in that trend area, so we're looking forward to getting those. Do we think we're learning how to target higher grade and do we think there's some there? Absolutely. And the other thing, if you went back to our resource and you looked at the sensitivity table at Powerline, we chose 0.2 because it’s big bulky, people really want to see scale. But if you'd have chosen 0.5, we would have still had 2Moz at just under a gramme. So when you look at it like that, and how we model this, we aren't at our PEA yet, but we will have optionality when we get there when you have scale. And when we're going to find these areas, which we know are right near surface that had higher grade, there's ways to design your mine plan when you get there so that you may mine the higher grade particularly. If it's at surface sooner in the mine plan so you get earlier payback. And then the lower grade stuff later on in the mine plan becomes, gravy. You look at Kinross’s is Fort Knox and they're effectively putting run of mine on their heap leach pads. They're making lots of money at it. And it's like 0.1, so that's been a tremendous success story.

The key is getting your capital paid back by having a good mining plan that actually gives you that higher grade first. So is it there? Well, we're still working on it. And I think what we're doing this winter is really digging into our database. We've hired a few technical experts which bring some new perspectives and have seen this other places. And that's really going to help us in our targeting this year. So that's why we haven't put out our drill plans yet as we really want to spend some time digging into the data, getting those results so that we can continue to deliver good results and show that this property really has a lot more to give.

Matthew Gordon: I want to talk about Jason Neal in a second and some of these new hires, etc. But I think it's important for there's a big new audience coming into mining. Mining is a tiny, tiny sector compared to most other verticals. And the number of investors is huge if we can point their eyes towards this. But this low-grade component, you pointed out a couple of things there in terms of strip ratio, the cost of capital, repayment of that capital, etc. But what are the other factors for you, when you're looking around at similar, true peer analysis. When you're looking around the marketplace and seeing who's succeeding, what are the factors that you need to be cognizant of, when you're kind of building out the story for, let's say, someone else to come in and take you guys out and actually get this thing into production? Or should you choose to go down that route yourself, what's important to you?

Tara Christie:  Well, looking at our other peers, how do we compare. One, we have the scale, we haven't started to move to indicated yet because again, we want to find those right areas before we start to convert it. But the thing we have that really differentiates us is our infrastructure. We've got power line already across the property, we need 50m that's metres to get the power line across the highway to our camp. And yeah, you probably put in some additional on-site lines but that is in its right to a hydroelectric dam, that's only 50km away. So it's green power, that's a huge advantage. We've got communications already on the property, there’s cell phone service, there's fibre optic cable already going down the property to Victoria Gold, that's a huge advantage. And all-season road that's maintained by somebody else, it's the main highway goes right through there, along with the all-season road to Victoria Gold. Those are huge, huge advantages which I look at what Victoria Gold had to do, they had to build a substantial amount of road.

They had to put in the power line, they had to put in all their communications, those are really significant costs so that can't be underestimated. And the other really key thing is jurisdiction, security of tenure and security of permitting process. Yes, the Yukon has tier I permitting process which means it takes time and you have to make sure you get the community involved. You have to do the science right and the technical work right but it does have a clearly defined process that you can go through. And there has been a heap leach mine that's been permitted in the last 5-years and that's a huge advantage as well. So whether or not we take it down the road and do all the technical work and get it through permitting which our team is very capable of doing or whether somebody comes along and wants to acquire us, I think it's too soon. That's one of the reasons why I think we're in a little bit of a race is, is we are getting to the scale where people are going to start to take notice and we need to get this down the road enough so that we can really get the value that shareholders deserve out of it. Because it's been a long journey and this market, we're undervalued for where we should be in this market and in a better Gold market.

So that's the job that I have to do this year is to get out and tell the story and make sure that everybody knows about the project from the corporates who might be interested down the road. And corporates don't just come and say hey, I want to buy that today, they need to actually get familiar with projects and jurisdictions. And I think Yukon they are starting to get involved with, we see Newmont, Agnico, Kinross, who have all made investments in various companies in the Yukon. So they have vetted the jurisdiction but we do need to, as a company, make sure that we show why our property is better than maybe some of the others and what advantages it has.

Matthew Gordon: Okay, you mentioned one of the name, Victoria Gold, obviously, looking at them, end of September, they are 0.84, you are 0.6, obviously so that’s a 30% input, slightly over a third increase on where you're at now. So the importance of the grade is real, especially when, I'll say this in the capacity of…

Tara Christie: But Matthew, they're actually 0.64 was their life of mine grade. Their first 2-years they mined 0.8, but we could increase our cut-off grade and pick 0.5 and mine 1g material for the first 2-years and that's mine planning, not necessarily the grade of the deposit.

Matthew Gordon: Okay, so this would be really important nuance here, then obviously high grade, Victoria obviously going for the high-grade because they want to kind of pay down any debt they have, get that free cash flow position, because it's tough, the things pop up, things happen. You've got to pay for that. And there's an ongoing operational component to this to be profitable. Now, we could talk about the price of Gold going forward, but I don't want to do that yet. I want to focus on, for you, you've raised some money. You say, right, we think we may be able to look at some higher grade, there's a lot more work to be done, a lot more scale to be to be built out here. So what are you going to do with this capital? You did two raises last year, and most recently in December. You are good for cash so you get options?

Tara Christie: Yeah, we started this year with 19M which was nice and raising that money really was because of good quality shareholder. There were three subscription agreements in that 12.2M financing and very solid shareholder. So if you look at our chart of how it breaks out, we now have basically 38% high net worth individuals and institutions, not including Franklin, which is 9.8%. And then we have Victoria Gold at 11%, insiders at 7 and Osisko development just under 4, which only leaves us 30% retail. So we really do know where our shares are now. That gives me a block of almost 70% which I'm pretty confident is going to be there in financings when we go forward, so it's good solid money. And yes, we use that new life financing with a no 4-month hold, which was a great thing too.

Some people like to use that not because they plan to sell the shares, but because of how things look on their balance sheets for liquidity and other things. But I think that's a good change for some Canadian companies. I think it'll be really terrible for companies that are desperate to raise money because they will have people selling right away. What's important for us is now that solid shareholder base is really going to help us move forward but we take that money very seriously. Our planning this year is, we're spending the next three months before we start drilling in March. And we've been messaging that we're going to drill 25,000m this year, which obviously would leave us with a lot of money in the bank, which is one option. The markets are a bit uncertain and my job as a CEO is to always make sure we have a very healthy Treasury, not leave us in a position where we're vulnerable to the market or we run out of money.

So we're being cautious in how we plan. We can ramp up our exploration, anytime if we wanted to spend more of that money. Right now, we're targeting having about, somewhere of 9 to 10M by the end of 2023 so that we could go into 2024 and we're going to wait and see what the market does here. We can ramp up and drill 40,000m if we want to because with our property we could access basically all year round. We shut down in December this year, about December 7, I think we shut our camp down. And the weather was cold for a little bit but we could be drilling right now if we wanted to. It's actually pretty nice weather right now for drilling. So some of my guys are like, how come we're not going now. But taking a little bit of break to do the technical work and really think things through, we have a huge database. And some people do have that exposure I was talking about, the biggest value we have is our database of what we've drilled and what that's telling us. So doing some work on that and really setting ourselves up well for this season will help us spend our money really efficiently.

Matthew Gordon: I think 2022 to finish halfway through 2022, but here we are, it's a new year, new opportunity. So your general trend is up in terms of the share price, that's what it's all about for investors, big for you. You can't rest on your laurels, right? You've always got to keep this thing moving forward. You mentioned some new hires and some of the technical analysis so why have you done that? Why bringing that additional cost?

Tara Christie: Well, it's to look at things a little bit differently. We got this far with our geological model and we've been very successful. But again, targeting that higher-grade, understanding where they may be, the intrusion or intrusions might be that are feeding the system. Obviously, it’s a very large system. We have 5.5km now where we've got mineralization. And remember Powerline, the resource of Powerline is only 1.2km. We've now got 5.5km. Well, have we found all of it yet? Do we think it continues further? We do, but where’s our best targets, that's a lot of area. And to drill it all off, it's going to take a very long time and a lot of drill holes. So if we can be more strategic in how we spend our money and if we can find some of those higher grade areas, it really can change the story. We have got a few holes out there which will show that, yep, there's lots more of this low-grade, or a few 0.6 is low grade across the property. But where's that higher grade and how can we find it, how can we target it? The other key thing that we've brought in helping is on our metallurgy.

We're planning a very robust programme and we spent quite a lot of time. The first part of it was getting the samples organised. 5.5km of strike length, that is a big area. You can't assume it's all the same, making sure that you actually get the right samples and enough samples to the lab, which we did this fall. We got them all shipped off so that now we can do a robust testing programme throughout 2023 and really make sure we understand the metallurgy of the deposit and across the deposits. Powerline and Aurex Hill really are the ones which are more exciting. But remember, it's early days and people say why haven't you done all the metallurgy yet. Remember, we only made the discovery in 2019, our first resource was 2020. For metallurgy, that's really not a long time because the leach cycles, if you look at Victoria Gold's 150 days. So that's why you want to make sure you're doing it right, because it's not only an investment of the money into metallurgy, but it's time. Once you've started something, if you haven't got the right things going on, you're going down the wrong path and it's taking you a long time to find that out. So I'm not a metallurgist, so we made sure to hire both a consultant that knew what they were doing and worked at heap leach mines, but also an advisor to help, kind of like you always have in the army of the people that ask the questions from the other side to take the negative point of view, just to make sure that you're asking the right questions. And I think that's part of what you need to do.

Because, as you said, lots of different things can happen in mining. There's been lots of projects which come up with challenges, which were unexpected. And so we're trying to check off all those things well in advance of a PEA. We're starting to do some more work on the geotechnical, making sure that our logging this year will help us get that information. And we bought some extra instrumentation to help with that. We're expanding our baseline environmental programme, because you need to have 2-years officially but really 3-years of data. And we did start our programme 3-years ago, but it is time to ramp it up to get more data. So this project could be in a position to be permitted as soon as we figure out what the project is. So that's all in the works for this year, which is a lot of behind the scenes works and some of it's not very exciting but it's really important to de-risk this project and really set it out for success.

Matthew Gordon: Right, okay, so are you committing to a timeframe for the resource update?

Tara Christie: We've been saying by mid-year. We want to get all of our assays back if we can, or at least most of them. We do have the advantage now of having that on site prep lab for next year, which I'm super excited about should get us month, month and a half timeline from when we get the samples in and it will also reduce our costs. We are going to have to ship all the samples to Whitehorse to the prep lab and bring them back later when they want us to move the material. That's going to be a huge logistical people time saving, money saving and also give us our results in a much quicker time. So that's another thing that will be a game changer for us this year and a huge advantage.

Matthew Gordon: Absolutely. And it leads on nicely to something which most companies have been avoiding last year which is putting out some numbers and economic study behind it. Primarily because the inflationary environment everyone was operating in last year, it was terrifying. People got penalised if they did, they got penalised if they didn't. Different companies have different strategies about how they manage that narrative in the marketplace? What's your view on that? You haven't made any commitments yet, have you?

Tara Christie: The only commitment we have is to earn 100% on our property. We have to do PEA by December 2025 so that's lots of time. And market timing is everything as you know. And the first key thing is to have your project that you know is going to be economic. You never go into your PEA without actually knowing where you think you're going to end up. Yes, there can be some variables in it. But on the geology side and the mining side, before you actually announced when you're going to do it, most people I would think have most of the answers already worked out. Otherwise, you're playing a pretty risky game. And that's not something I do, I try to be very methodical in how we do it. We add value, when we do our PEA, doing it in a market where it's not going to be appreciated, like last year, would not have been a benefit for anybody. So you're better to just sit on your cash and wait for them to do that. Not that my shareholders have given me the cash to do that. My preferred approach is to move this forward as fast as we can, adding value for shareholders. But being a little cautious, I'm not going to put us in a position where if the markets not going to appreciate it, that we're rushing to do some study for the sake of doing some study. People know what these projects are. The key thing is find that grade, get the scale and make sure people understand how valuable that is in this jurisdiction with the infrastructure that we have.

Matthew Gordon: Well, Tara, great update. I think I get some reassurance from the fact that you've got money in the bank to choose your timing on things that you've wanted to feed into the marketplace, where others haven't. So I think that's good news. I've been intrigued to see what the new team come up with in terms of a plan, drill plan, and maybe come back on and tell us about what you think that looks like for 2023. I appreciate your time, good to see you today. Well done on last year. Do you think the Gold market is going to do you any favours this year or do you very much believe well, we'll control what we can control but you've got to have a view on Gold.

Tara Christie: Well, I'm a Gold bug, I've been a gold bug since I was 10-years old. So that's not going to change. And that's partly why I have to always have that careful side of me planning. Do I think we're going to have the opportunity? Yes. And so are our planning involves that really ramp up as well, that ability is always there so that we could advance us very quickly. And that's part of getting the people in place, making sure we understand where our best targets are so that we have that optionality. I think the next couple of months will be pretty telling, we always go into March when there's the PDAC and sometimes that's good and sometimes that's not good for the sector. I'm planning for good and I'm excited about, even where we've started this year. I think there'll be some good news for miners and certainly our plan, we're going to add a lot of value for shareholders. I'm excited about our team that we've built and what we've got in place for this year. And again, having money in the bank, we actually can just focus on the technical work that we need to do and how we're going to deliver, we don't have to be stressed out about what the market is doing day-to-day.

To find out more, go to the Banyan Gold website

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