Metallic Minerals (MMG) - Not Just Another Gold-Silver Explorer!

Metallic Minerals Corp., founded in 2007, is a relatively early-stage mineral exploration company that is focussed on the acquisition and development of 'underexplored' high-grade silver and gold projects. The company is part of the Metallic Group along with Group Ten Metals. Metallic Minerals is not a producer or mine developer; it is an unequivocal explorer. The core project is the Keno Silver Project, which is located in the historic Keno Hill Silver District of Canada's Yukon Territory. The region has previously produced over 200Moz of silver and hosts one the world's highest-grade silver deposits. Keno is located next to Alexco Resource, providing Metallic Minerals with optionality should it hit the jackpot.

Matthew Gordon talks to Greg Johnson, July 2020

The company has 2 secondary priorities: the La Plata silver-gold-copper porphyry project in the La Plata district of the renowned Colorado Mineral Belt, which was recently acquired and was previously operated by Rio Tinto with a lot historical drill data from the 1950s and 1960s, and the McKay Hill project northeast of Keno Hill: a high-grade historic silver-gold producer. La Plata was purchased because it appears to have been too compelling a value proposition for Johnson to refuse because it isn't often that silver-gold-copper assets with a porphyry system that haven't been drilled in half a century come onto the market.

Moreover, Metallic Minerals is creating a gold royalty portfolio in the Klondike Gold District. The team has had plenty of success when it comes to exploration, and this may inspire a sense of confidence from investors.

Johnson's positive track record extends back to NovaGold, founded in 1998, which provided "100-fold" returns for investors who got in in 2001 when NovaGold made its primary acquisition. This process of acquisition and development to the FS stage is clearly something Johnson and his team are specialists at. Investors will be hoping for the same this time around.

How will Metallic Minerals finance the development of all these projects? The onus has mainly been on equity raises followed by "targeted work" programmes. Whilst Metallic Minerals' projects have plenty of historical data, this needs to be reinterpreted with modern processing techniques. Johnson is hoping to have a similar level of success in the Yukon to that of Alexco. A mill already exists in the district, so Metallic Minerals can continue to build on its already encouraging drill numbers without worrying about the back end viability of the process. Metallic Minerals has sufficient cash, US$3M in the treasury (and another US$3M in warrants/options) with no debt, to carry out a "pretty substantial" drill programme at the Keno Silver Project this year.

The market isn't that excited about Metallic Minerals right now; it is trading at 1/10 the price of Alexco, but Alexco does own half of the district with a mill. The recent share price bounce is largely attributable to the silver price boost, but there is certainly value potential. Investors simply need to see something more concrete before piling in.

There are 40 different targets to look at within the Keno Silver Project. Metallic Minerals needs to be sensible with its prioritisation decisions. 6 of the targets sit along the trends that have thrown up the largest deposits in the mineral belt, so these are the primary focus for now. The company has been drilling on 3 of them alongside conducting underground sampling. Looking at the district holistically, based on the regional geophysics and geochemical signature, the prosperous geology from the western end of the district continues throughout the central and eastern parts of the district. Johnson claims technical research like soil sampling can reinforce these claims with data.

Johnson himself holds c. 10% of total Metallic Minerals shares having participated in "every financing since day 1." All of the team members are owners, with 25% ownership all purchased as financing alongside every other investor. The G&A is "quite low," at US$400K-$500K pa.

What did you make of Greg Johns and Metallic Minerals?

Company Website: https://www.metallic-minerals.com/