Corporate Update with Minera Alamos (TSXV:MAI / OTC:MAIFF)

Trevor Hall [00:00:02] Everybody welcome to Mining Stock Daily. This is Trevor Hall once again reporting from the Denver Gold Forum here in Denver, Colorado. Sitting with me now is one of the sponsors. The president of Minera Alamos. Minera is a sponsor of Mining Stock Daily and the president here is Mr. Doug Ramshaw, a man I admire and respect for last few years and really grateful he's always given me the time today for giving me good and bad advice or maybe I ask for good or bad questions. Doug thanks for joining us. And how has the last week and a half with Beaver Creek and Denver Gold treated you and Minera Alamos thus far?

Doug Ramshaw [00:00:40] Well it's good to see you, Trevor. I've barely seen you at these two shows because you know in terms of how they've been exhausting but the good kind of exhausting. You know tremendous meetings up in Beaver Creek and we've just followed that through with a great audience receptive to the story here in Denver. So it's it's great to be around the show when there's such a vibe and buzz going obviously with the current move in precious metals and you know telling a compelling story that seems to be resonating with people.

Trevor Hall [00:01:09] The last time you and I had a chance to talk was it was actually a while ago there's a lot to update listeners on the story of both Santana and La Fortuna. But Santana is definitely we've got permits in hand you're ready to go and you're just expressing to me there's a little bit more optimism in the project. It may not be just that small little starter cash flowing opportunity that investors are seeing.

Doug Ramshaw [00:01:34] Yeah. We think it's gonna be a lot bigger now. Yeah. Since last we spoke we were talking about getting permits and everything else. And we have those all now and I'm a big believer and you know if you're going to say you're going to do X Y Z make sure that next time you're talking to someone you've done that. So I'm really really happy with the team's progress down there on the permitting side. That means all our timelines are intact for when we start construction a little later this year and would be going into production mode summer of next year which makes us one of a very small group of companies that will be new gold producers next year. So great. As for Santana the upside of it really in the last few months we've seen it as something which can grow significantly through a number of new discoveries. We've we're in the process right now of drilling both at the known pit that we'll start the operations at but we're going to start putting a few holes Into a number of these other similar breccia pipes and there's a very good chance that if if we're lucky on that and that's why I would I would really focus on those exploration results when we release them. If we're lucky with some of those hits Santana in its own right could be 80 hundred thousand ounce producer. So a lot more than just that little cash flow generating business that would allow us to take that on for our second mine.

Trevor Hall [00:02:56] That's actually really good point because a number of conversations I had especially up in Beaver Creek was really how to transition from a company to a business and doing a business means you need cash flow right. And so while these smaller companies that have you know oxidize heap leach operation that can start generally generating product and getting money into the company really helps advance you know helps advance those companies into an actual business. But with you guys in the exploration side you know what's kind of a budget looking like for this year into next year as far as advancing and and putting maybe seeing more ounces in the ground at Santana?

Doug Ramshaw [00:03:34] I think you know well we'll be spending at a rate of probably half a million a quarter on exploration and that will continue right through and once we're in production that will scale up. We'd rather do the exploration out of cash flow but it's very accretive when you can when you can probably have a discovery cost of 10 dollars an ounce and be able to move those ounces very quickly to a heap leach pad. You know that's that's a fantastic discovery cost for us. And so our exploration will always I think be very accretive to our business model. And yeah the business model is resonating with people. You know it's no surprise to me that 18 percent of our shareholders are generalists because we're speaking their language. I like to say in some of our slides what we're doing is real business in action and we're you know I hope to look back and be very proud of essentially building a real business happens to be focused around mining but you know it should be about the bottom line you know and if we can deliver to the bottom line our shareholders are going to benefit greatly from that.

Trevor Hall [00:04:33] I know a lot of the attention in the last six months has been on Santana but is there anything from La Fortuna that is worthwhile for investors to keep a close eye on?

Doug Ramshaw [00:04:42] Well we're still talking with the debt groups on it. We've had some very indicative favorable indicative terms on what a debt package would be like because what we would like to do is build not just Santana but largely Fortuna as well without having to go to the equity markets. I think we can produce 100,000 oz year. So you're profile within a couple of years barely having to come back to the equity markets which is obviously very strong for us. On a permitting side we're just going through the last steps to get our environmental permits for tuna. Once we have that we'll start some earthworks moving with the local community getting roads built and the like although the main construction we're still planning for kind of a construction decision in Q4 of next year. Once the Santana operation has come on.

Trevor Hall [00:05:27] You've got Guadalupe. It's off the books that's moved on. You still hold an equity position into the company that owns Guadalupe. But I remember about a year ago you you and I were talking about you had a three project three year kind of business strategy here. So now you're only about two. You're still now two projects. Are you still looking at maybe two project two year position or are we kind of moving that into a maybe a three year strategy now?

Doug Ramshaw [00:05:56] That's an interesting question. I mean we had yeah a three year three project three year plan to get 350000 ounces. The nice thing about Santana is I think with just 4 tuner and Santana we can get to that one hundred and fifty thousand ounces threshold in three years. We are still looking at M&A that can now take that profile higher than that 150. So you know in our presentation we talk about you know ongoing M&A opportunities I wouldn't be surprised to see us over that over the next six to nine months adding an additional production asset in then that will allow us to kind of reach that proposed you know 200,000 ounce level which obviously you know we should start getting additional rerating as we get to to a higher annual production rate.

Trevor Hall [00:06:46] One of the things I appreciate the most about you is your ability to kind of work with the market the capital markets while also developing a business. You know we we saw a large majority of the warrant overhangs kind of pass earlier this summer. Give us an idea of the movement of liquidity you're seeing in the stock. Obviously it almost seems like you're outperforming many of your peers right now as far as a movement in the share price but what's your analysis on those?

Doug Ramshaw [00:07:13] Well yeah I mean we had a big Warren overhang and they all happened to expire in a three and a half month period so come June. So you know we were basically almost warrant free and right now moving forward we only have three million warrants so there's no artificial ceiling on the stock now created by a big warrant overhang. I think much of the move we've had since June is is a function of that kind of freedom. The stock has to now act on news so as we've executed on the permitting side with no warrant overhang the stock has been able to appreciate I am a penny of our move is probably to do with general market sentiment. I think the rest of it is to do with execution and the lack of warrant overhang. So moving forward you know we like to think that we've we have blue skies ahead with no warrants there and for us you know we're all about execution. Everything I I said earlier in the year that we would do we've done and I think that's important. You know I know it seems that it's a simple concept if you're going to say you do X Y and Z do x y and z but it's amazing how timelines can slip and we're very proud of being able to message to the market and and provide context to the market of what we're doing to keep people you know comfortable that you know if you're going to execute on building gold mines you've got to make sure you execute on the small stuff too. So so we've done that and I think I think there is just a lot more eyes on the story now we're trading a million shares a day. And I know from the meetings down here and both Beaver Creek and Denver you know this is a story resonating with funds who can now with the liquidity we've got position themselves in the open market because I'd like to say we're not going to be doing big equity raises to to position them.

Trevor Hall [00:08:56] Well I did want to ask you about that because you did mention avoiding equity raises avoiding further dilution. Why is I mean why is having production in the hand later next year with cash flow that much more important is that the way to avoid avoid anything like that in the future?

Doug Ramshaw [00:09:12] Yeah I mean I think there will be you know opportunities in the future at higher levels where there were creative transactions we can do that can involve some equity as well. I think the the foundational dilution that has taken place to build business model now that can largely support itself without equity has taken place. Will there be some incremental equity dilution from time to time. Probably and probably be very strategic and it will be associated with something that we feel is very creative and I have no problem considering that at appropriate valuations and at least we now with the market understanding of what we're doing I think we can drive this this this story forward to a point where it won't feel kind of like the dilution of recent years in the sector.

Trevor Hall [00:10:01] Last question just continues to be looking forward to get you announced some exploration planning. About a month or two ago should we start seeing any drill results coming out of here this fall?

Doug Ramshaw [00:10:13] Yeah I think probably end of October onwards will. We'll have just a flow of news like we did last year. Last year there were great holes and no one cared. I think with the eyes on the stock this year you know last year we had four successive news releases of some fantastic holes and they were just liquidity events. Then we put out a press release announcing we had a new website and the stock moves up and I'm like go figure this. Yeah I think with the attention on what we're doing. There's a lot of people looking at the exploration potential there in terms of most you know the other news. Expect to see news on the Fortuna permits and also construction's plan to start after the rainy season in Mexico between now and then we should tie up the project finance so that we can show that this is going to get built and we have the money to do so.

Trevor Hall [00:11:01] Doug thank you so much for your time. Oh and Happy early Birthday my friend.

Doug Ramshaw [00:11:06] Thanks Trevor I appreciate it.

[00:11:07] As Doug Ramshaw shows the president of Minera Alamos which is traded on the Venture Exchange with MAI and also on the US OTC markets with the symbol MAIFF.