Transcript: Banyan Gold (BYN) - Attractive Growth Story with More to Give

Morgan Leighton
November 8, 2021

Banyan Gold Corp aims to build a reputable exploration company through value driven acquisition, discovery and development. Banyan is focused on advancing two Yukon gold properties, the Hyland Gold Project and the Aurex-McQuesten Gold Project.

The Hyland Gold Project  is open in all directions and at depth, and has the potential to host a multi-million ounce deposit. The Aurex-McQuesten Property lies in close proximity to both Victoria Gold's Eagle Project and Alexco Resource's Keno Hill Silver District and is highly prospective for structurally controlled, intrusion related gold-silver mineralization in relation to the Tombstone intrusive suite.  The property hosts numerous known gold targets and Banyan has developed a mineralization model at the McQuesten “Airstrip” Gold target, located adjacent to the main Yukon highway and just off the main access road to the Victoria Gold open-pit, heap leach Eagle Gold mine. The Property benefits from a 3-phase powerline, existing Yukon Energy Corp. switching power station and cell phone coverage.

Banyan Gold is advancing the AurMac project and is well funded. There are three drills turning and the company is planning to publish the resource update in 2022. Banyan Gold has already drilled 25,000m and will have completed 30,000m by the end of this year and is targeting 30,000m+ for next year.

Since we last spoke in July, the company has completed a financing for $16M and has been planning for 2021/22, completing risk assessments and hiring more personnel to move forward into 2022. Banyan Gold is focussed on spending the money well on maximising ounces but is also focused on ESG and growing the workforce.

Banyan Gold has announced some great drill results with large intervals and there are lots more targets on the property ready for exploration drilling. The company has potentially 3 pits and needs to show the scale of the deposit as a standalone project. The next priority is to get the project to a 3M oz deposit and will continue drilling in 2022 to show the potential and Banyan Gold has the funds to do this. Once the resource has been published in 2022, the company is planning to start working on the PEA.

We Discuss:

0:00 – Company Overview

00:34 – Field Update, Company’s Philosophy & Raised Money

07:27 – Changed Mentality, Managing Expectations & Current Worries

16:42 – Huge Intervals, Technical Expertise & Guidance

22:44 – Realistic Approaches, Infiltrating & Some Fundamentals

25:44 – Outro

Tara Christie: Hi, Tara Christie, President and CEO of Banyan Gold. Great to see you again Matthew, Banyan Gold is advancing our AurMac project, we're now well-funded 3 drills turning, planning really exciting 2022. You can expect a resource update in 2022. We're already at 25,000m today for this year, targeting over 30,000m and we'll drill over 30,000m next year. So very exciting times for Banyan and certainly a transformative year for us.

Matthew Gordon: Tara lovely to see you again, haven’t seen you since July, I think that was great. It was nice to actually see the business but reason for coming up is you put us some press release, you've got these lovely wide intervals, good grades, so you must be pleased with the way that's going and 3 drills turning as well. So why don’t you give us an update in terms of what's happening in the field, and we'll kind of get into it after that.

Tara Christie: So yeah, since we saw you, we did that financing brought in $16M. That's really transformed us because we now know what we're going to do for this year and next year. We've been doing a lot of planning, doing some risk assessments, understanding where our greatest risks are to slowing our project down in our programme. And putting those things in place hiring people, we have the advantage in that we're drilling through the fall and the winter. We have 3 drills turning right now, we took a lot of time to plan to actually get set up for that and to continue to drill through the winter. Where other people are shutting down, we're able to hire more people to add to our team, I think it's really setting us up well for 2022.

Matthew Gordon: Well, it is actually, okay, maybe let's start with this actually, because I think I do want to talk about the drill results and how you've gone about allocating your capital that you've raised, but maybe start with this, you're a different company now from the one I spoke to a year ago, where you were tiny company, not a lot of capital, an idea of what you wanted to do. No one's paying attention, it was a tough gig, right? You needed to behave a certain way there to try and get noticed. You had to be frugal with capital. With $16M in the bank, you're going to need to behave a different way. Because you need to paint a different picture to the marketplace. So that change in philosophy in the company, can you describe what you think you were and what you need to now be?

Tara Christie: Sure, back when we were 5M market cap pre-resource in May of last year, expectations were all of our money focused on exploration and maximising the number of ounces we would get. And while we're still focusing on spending our money while maximising ounces, there's a lot more that we need to be focusing on. Now we need to be taking the ESG side much more seriously. We need to be getting our workforce, because we are going to be very busy, we need a reliable and trained workforce. A lot more investors now and now that we're you know, 60M market cap company, there's a lot more expectations, and many of our investors want to see how we're doing and how we're ranking. We're doing a lot of that and we have been doing a lot of that. When we were a smaller company, but not necessarily reporting on it, now we need to actually show people what we're doing and demonstrate it as well as ramp up. 3 drills is a significant change in the infrastructure that we had when we were smaller company and we had 1 drill. Now we need more space, we need to put some money into things like internet in camp and the space in camp, the number of rooms, setting up for winter drilling means preparing for that. Yes, it's very possible to drill right through the winter, but you need heaters you need to be able to plug your vehicles in and you need enough generator power. There are all the little details that we're taking a lot of time to try and get some of that right and ultimately that will save us money. So in what we're doing; roads, where are we planning for roads? are we talking with the First Nation about what our plans are to make sure that we stay on side. Are we maximising what we're doing in the winter where it's swampy versus the stuff you can dry it when it's not frozen, and will be dry? Where our water sources? We put in wells so that we have water for when things freeze up, and we have heated water tanks. All of that takes a lot of logistics and planning. And I think that's something that our team does really well and will put us ahead of others. Being able to drill through the winter and that lets us advance this very, very quickly. We showed when we were a smaller company, our technical team is spot on, our geological model is telling us where to follow this mineralization. We focused on power line this year because of how exciting it is, and it's still open in all directions. We're chasing it to the east and to the west and a little bit more to the north, because we're seeing some higher grade, longer intercepts to the south but there's still lots of work to be done there. We're also doing a little bit of infill drilling this fall, so that we understand the variography and what it's going to take to convert this from inferred resource which will also set us up and really tell us more about the mineralization and the deposit. So we're combining adding ounces with the science, as well as metallurgy. We've expanded our metallurgical programme, we're doing columns, we're doing more bottles rolls. We’re evaluating what we did in our baseline environmental work and what more we need to do, what data we can get from our 2 neighbours and our big shareholders, Victoria Gold and Alexco. What would we need to do to fill in for permitting, making sure we're communicating with the First Nation, both on what we've done this year, what we're planning to do next year and what the realistic expectations are for our project as we move through the next few years. So you know, all of that work takes a lot of effort. And then on the ESG side, what we're doing to be visible to the community is really important and it's something we're putting a lot of our effort this fall into.

Matthew Gordon: So it feels a lot more real and we've had a few chats now and we've seen that kind of growth, right? So it feels a lot more real, there's a lot more moving parts, there's a lot more you need to be in control of and manage. With regards to the money bit though, you've gone and raised 16M, you went out for just under 12, raised 16M so that's good news. What sort of money came in, was it more institutional, are they starting to see this story build?

Tara Christie: Well, one of the major shareholders was Franklin Gold and Precious Metals, they're now 7% shareholder and they really are a value, they want long-term value investing in Gold. Also care about the ESG, several institutions, there weren't actually a lot of investors in the financing. It really was, we really wanted long-term holders who were going to add value as shareholders. Very limited amount of flow through, almost 0.5M was to me, so I wanted to maintain my 5.5%. Victoria Gold is at 12%, Alexco with 7%, Osisko Gold at 5% and Franklin at 7. So that's a really strong shareholder base, we think which is setting us up well for next year and beyond.

Matthew Gordon: What were the terms of the deal, just remind me, what did you raise? Because I had a conversation earlier this week with someone who said, they just received a chunk of change from institutions and their big driver was, you've got to get your ESG nailed. And if you've got your ESG nailed, we'll carry on with the rest of the conversation. But I'm not proceeding unless I understand what you've done, and if it meets our criteria and it did, and the money was cheaper, right? So that's when move further down to the development stage. That's the kind of benefit of the ESG component as you were talking about. Can you give some understanding what the 16M cost you and do you think you could have gone and got more? Do you need any more?

Tara Christie: I think we could have got more, but it wouldn't have been as good of a deal for our shareholders. So you know, we did the back end was $0.28, the front end of the Charity Flow Through was $0.38 and $0.35 in the regular flow through, and only 2M of the regular flow through. So not a whole lot out in flow through. And that's typically the stuff that you see selling for months. I think we've held up really well, that financing was done at a pretty good price to our market price, no warrants, which is also unusual. And partly it was because of our ESG, many of those shareholders that came in and that financing did want us to walk through their ESG, know what we were doing and get some evidence that we're actually doing that. And so I think we could have raised more money at lower prices but we don't need more money. This is a really comfortable place for us to be. We have a great work programme plan for this year and for next year. We're doing lots of work to de-risk the actual work, you hear all this plus this talk about inflation, lack of people, supply chain issues. Well, now we can plan ahead, we're ordering in inventory, we're making sure we have enough fuel storage so that we don't unnecessarily get shut down. We're hiring the people that we need for next year. We're signing our drill contract for next year so that we have our drills guaranteed. So that's a real advantage for us to have that security and to be able to do all of this planning upfront for next year. It is a change because before what do you mean by 4 extra filters, now it's like yes, we know how many we're going to need. Let's just order it save time. We don't have to go in order those are really small expense. You know, just as one example, but when you're able to take a lot of that busy work off because you've pre-planned, it's going to make us more efficient. And it's going to protect us from those suppliers issues and inflation issues, if they continue to raise their head.

Matthew Gordon: It's a really interesting time at the moment for people and companies, with management teams, they've been through it before or got the individuals who've done them. It's a little bit easier to navigate what are quite choppy waters, because we're seeing a lot of this, just in time philosophy of the past, really coming up against the wall, because they're being battered because they can't get the materials they want from outside. And if they can or long lead times to that and things are getting more expensive to talk about inflation. We've seen that with transportation, but also some of the items that are being ordered too. So I think it's a different mentality needed now. As you talked about fuel or filters or whatever you need to have, you need to have an inventory running now which doesn't seem efficient, but if you don't, it could be quite perilous.

Tara Christie: It could be, you can imagine if you have 3 drills turning and you can't get the fuel in that you need, and then you've got people sitting around with it. So having a little bit more storage is actually really important. And that planning, 2-years ago, we couldn't do that, because we didn't have the additional money to invest in that sort of stuff so it saved us money. But now we do so we’re growing our team, I've hired somebody to help with communications, both on the community and the investor side. It takes some time for them to get their feet running but I think going into 2022, we're going to be well positioned for that. Operationally, we're getting the right people in place to be able to drill efficiently, deal with a larger number of people in our camp, manage that, look after our assets and the things that we've rented from contractors to be able to, to operate, that's all are really important. And ultimately, it's going to put us in good standing. It can't be underestimated how much the actual management of the programme is important. The science and again, we take the time, we're taking the time to take a step back. Let's think about what we actually want to do. Let's wait for those columns before we start the next work, whatever that is, if we're going to do more columns, are we going to do more models, we have a bit of time now. So we can actually use the information we're getting and plan ahead. We always were very efficient in our drill programmes, picking our spots based on where our geological model, looking at our core. Even when you get a bigger programme, you need to make sure that you have your deals, go look at every hole before you plan the next holes. Sometimes some programmes they're just so overwhelmed busy drilling, they don't make sure that they're actually checking with what they have and wait till they get the assays back. Well, we can tell when we have sheeted veins in the ore visible Gold in colour and Powerline had a lot more visible Gold than we've seen before. And so you know that that helps guide us without having to wait for the assays. And talking to the labs with the times have really slowed down now and so we haven't put out as many drill results as we'd like. We're still waiting for those results from Aurex Hill. It doesn't concern me, we've got lots of targets and Powerline continues to be open, but I want to get a better deal for next year and get some guaranteed timelines from the lab. So we're working with them as well. And I appreciate they have people problems, there seems like the labour positions are the biggest problem for drillers, for labs, for us. So let's help them get that problem solved and get them to actually commit to some timelines for next year, because that will help us.

Matthew Gordon: So just talking about managing expectations for mostly for retail, okay, because there's a change in the arena in which you guys play and operate in the sense that league times are taking a little bit longer, the just in time stuff doesn't work. You've got to spend money, building inventory, so still sits there on the balance sheets whichever line item you put those things, but the money is getting spent upfront. Not so, you've raised some money and more of that spent up front because the just in time stuff doesn't work anymore, right? But the assets are still there on the balance sheet. Do you think that retail investors need to think differently about or the way that they value companies because of this change in the way that you need them as miners, you need to manage your business in this type of environment where you are having to secure maybe slightly more expensive staff, maybe more staff than you normally would? And then for companies like you specifically, where you're moving from early -stage exploration into slightly more sophisticated exploration business. So is that kind of expectation management which you need to help retail investors understand?

Tara Christie: I think so, because we're funded, we're not waiting for the next press release. We're not rushing to finance, that lets us be able to really spend the time thinking about what we're doing and putting the time and effort into our programmes and our planning. Personally I would be concerned about companies that are waiting till next year, I don't know if they'll be able to get drills or people. Certainly, this year there was huge pressure on companies even that had signed their drill contracts early to be able to execute on their programmes, either to get people or the drills. So I think that it is a huge advantage, it's something that I look for and things that I invest in right now, beyond Banyan, I’m the first big investor in Banyan, but I do look at other companies and follow their story. So I think it is a significant risk for some countries. I also think people are starting to look to first group countries, some of the issues in places where you might see nationalisation of assets or increased pressures because of that, that's a worry as well. So I think we're in a tier 1 jurisdiction, we've got 2 mines that have been permitted right beside us in the last few years. We've got a knowledgeable First Nation that understands mining, understands the risks and wants to see responsible development which, that's on us to show that we're responsible, we're following the rules, we're exceeding the best practices. So that's what sets your project up long-term to be able to go through the development process in a first world country. So you need to do that. It's really important and you can't leave it to just before you're going to get the permit. You need to do that well in advance and get your social licence to operate.

Matthew Gordon: I definitely understand that, we've had some great conversations in the past about that. But with the money, you're doing new drill programme, some of the numbers are great, 145m at 0.74, you got over 110m at 0.60. These are huge and both for you, but you're doing that in the context of assay labs not being able to tell you exactly what you've got. And I appreciate what you're saying, with regards to being able to see some of the visible got, and you've got some ideas about how you go about it. But do you feel like you should slow it down a bit until the assays catch up? Or do you think that you've got the right technical expertise to be able to say, hey, let's crack on in these areas? Because I want to put out or I’m under some pressure to put out a resource update? Do you feel under pressure?

Tara Christie: No, I have been really quite confident in what our team has been able to achieve. I have always disappointed in the labs, you want the results. But you know, quite frankly, our geological model is pretty robust. And we redesigned our drill programme after the lab started to slow down to focus on areas, particularly powerline that used in the last and then that infill where we knew that we would be able to continue to add a lot of that. So yes, we're waiting for Aurex Hill, we're not going back to Aurex Hill until we get those results, so we understand how the mineralization is occurring there and where to go next. And also, you know, in the wintertime, that's a little bit more challenging to drill there. So it is possible and we can get ourselves set up for that. But we want to get those results back before we go there. And thankfully, we have enough targets, we've got such a large area. We're focused on roughly a 4x5km area, which contain airstrip, power line and Aurex Hill and within that there's lots of targets. We will try and get to some of the regional stuff next summer, which we've got other targets on our property in the Nitra property which is just to the West. We did some soils on that and getting those soil results back and we've got time now to think about it. I'm pretty pleased with what we're being able to do this fall and the weather's been terrific so it hasn't been very cold yet which has been a big advantage for us.

Matthew Gordon: So tell me about the planning going forward. I mean, what can we expect to see? Because you've got potentially 3 pits here potentially, right? You can go and drill anywhere you want in any order that you see fit in the context of not really having as much information back as quickly as possible from assay labs. What kind of guidance are you giving to the market and saying, here's how I think we're going to come out this? We're going to paint a picture for you which is of a company which is going to be what? I’m just sort of intrigued because you have to be agile, you have to be nimble, you have to adjust to market conditions, but the same time you need to keep delivering stories in what is a kind of a pretty pressured precious metal market at the moment. This year's been quiet for precious metals. So what do you do?

Tara Christie: I think we need to show that we have the scale of deposit for this to be a standalone project. Victoria gold permitted they had 2Moz in reserve grade 0.63. I think, because of the precious metals market and I think the new number that you need to have for a project to be a standalone project in our jurisdiction in the Yukon is probably 3Moz. So you know that I think getting up to that scale is our next priority. Continue to drill, show that in in terms of inferred resource, there's the potential for that and more in any blue sky potential, I mean, we have large land package. So we have that so first step is to get to there and demonstrate that we are doing the other work about understanding what it would take, where you might put infrastructure. Because eventually, we're going to want to start drilling in places that don't have mineralization so we can find places for infrastructure which not yet, but we're planning ahead for that. We're already doing some conceptual planning, maybe it's 3 pits, maybe Powerline and Aurex Hill are connected, maybe it's 1 pit, maybe you start one side. And so looking at those various scenarios and reasonably thinking through, and when you've got time to do that, it gives you more opportunity to think through various scenarios, look at different options and then field check things. So I think that's where we are planning to start our PEA next year after we put up that resource. We want to have done that advance work. And because we want to start doing some of the baseline environmental in Yukon, you need 3-years of baseline environmental work before you go into the environmental assessment permitting process. We started last year; we did a programme this year. But we need to look at that and make sure that we're covering enough areas that we're getting the right things, are we missing something that's going to be a showstopper. And that's all part of our bigger picture risk analysis of what we need to do. Ultimately, we're adding value by adding ounces, getting to that 3M threshold. Secondly, we're adding quality of ounces. So there's a value whatever it is, in this current time in the market for ounces in the ground, but then there's the quality of those ounces. Are you in a jurisdiction where you can permit that project? Do you have infrastructure? Have you shown that it's recoverable? Have you done the metallurgy? Have you done the baseline environmental, have you done the ESG. So that's the value add so if you're going to rerate, and I think in 2022 you're going to see the good companies in the precious metal space rerate based on those two factors, that total ounces in the ground, and then the quality of those ounces, which encompasses all those other aspects of the project. So have we captured all them? We've started our risk register and we look at what those key items are moving the project forward. And that's having time through this winter to do that is really valuable.

Matthew Gordon: I agree with you, I think next year is about fundamentals, ounces in the ground is good. I mean, there's a kind of old adage, and I'm not sure it holds true necessarily all the time, which is a greatest king. But I think it's amount of contained metal in the ground should determine the economics of something. So what are you going to be able to do with 16M? I think you've written somewhere that you're funded until 2023 but what's your target for what that's going to be able to do for you in 2022 in terms of ounces? you talking about maybe 3M is the target, but do you think you could realistically get to 3Moz with $16M?

Tara Christie: Well, yes I think it's absolutely realistic to get there. When you look at the geology on the property, and how much we've already expanded Powerline, the prospectivity at Aurex Hill. So we'll drill 30,000m plus this year, we don't have a hard limit, if we can get extra metres this year, we will and then we'll drill 3000m plus next year. We'll pick a date from our drilling this year when this is the assays we're going to put in that resource update. But then we'll keep drilling because we know that things continue to be open. We don't want to slow down but we do want to show the market where we are in Q2 next year. And then get started on all that other work outside of that and then start our PEA and we're funded for all of that. So at least 30,000m we're planning for it for next year which we've already have meeting later this week to get our drill contract organised on that we've already been in discussions. So I think it is realistic that we'll be able to do that programme next year.

Matthew Gordon: Just remind me again, with the infill you're planning how much infill drilling and all of this and to what end?

Tara Christie: Really to understand the variography so just one small area. On our website, we do have our drill maps. We've got basically a star pattern in the north east end of Powerline, where we are infill drilling at 25m spacings to understand it's a small programme, just to really understand the geology and how the mineralization is occurring and what it's going to take later convert this to Measured & Indicated. And then we're most of it, we're still focused on those 100m space and step out to the east and the west and then continuing to go to the north. So the Powerline area to the east there, towards Aurex Hill, lots of those photos on our on our website. We're continuing to follow up on that and so far, we haven't found an edge to Powerline so there's just lots of targets around.

Matthew Gordon: Tara keep focusing on those fundamentals, it's impressive what you've done in the last year. And stay in touch and let us know how you get on. I have got one last question, which is, how is every student every day? How's it going?

Tara Christie: Great, we're gonna have some exciting news. I'm going to Whitehorse this week to actually do some presentations for students who participated in our water bottle contest, as well as some of the projects we funded. And we're going to be announcing we're giving out more money than ever in response to COVID, in response to what we're seeing in Canada, for the push really for reconciliation and the education level. And really excited about that, you know, been working on it for almost 10 years now. And finally starting to get some real momentum at a time when it's most needed. We gave out $150,000 last year, we have $40,000 in demand. We're expecting unprecedented demand and I think we're gonna have over $300,000 to give out this year, so very excited about that.

To find out more, go to the Banyan Gold website