In-depth with TriStar Gold CEO Nick Appleyard and Board Director Dr. Quinton Hennigh

Trevor Hall [00:00:03] Hey, good day, everybody welcome to Mining Stock Daily. This is our first in-depth interview of 2020. And thank you so much for joining us. Not only today, but throughout the week. It's been quite the quite the eventful week. As we jumped in back into the podcast this week. So we saw $1600 gold for a short time. If you can believe that. Crazy, huh? So we've got a great interview with the CEO of TriStar Gold. And the board director there. I was able to meet them while they were traveling here in Denver to get an update on the project, their Brazil and how they plan to continue to advance it throughout this year. Before we launch that conversation, I do want to give a special thanks to all of our sponsors. That includes Corvus Gold, Pacific Empire Minerals Integra Resources, Western Copper and Gold and the Association for Mineral Exploration. I do hope you'll join me in a couple of weeks in Vancouver for the Roundup conference. Registration is still available and I look forward to meeting as many of you there as possible? So without further ado, thank you so much. And we will launch into our conversation there with Nick and Dr. Henning. So enjoy yourself this weekend. Be safe and we'll talk to you again on Monday. Be well.

Trevor Hall [00:01:28] Hey, everybody. This is Trevor Hall with Mining Stock Daily, and I'm introducing the first full in-depth interview of 20 20. Thank you so much for all of your comments and listenership throughout the week as we launch into a new year. I am very privileged to be sitting here with two fine gentlemen. That's Mr. Nick Appleyard from Tristar Gold. And we actually have a director of the company with us, Dr. Quinton Hennigh, who has many hats of many different companies. But today, we're going to talk about Tristar. So, Nick, Quinton, nice to chat with you. Welcome to Mining Stock Daily. Welcome to Denver. Thanks. So, you know, this was kind of a piecemeal this interview because, you know, Quinton, you're a Colorado native. I'm a Colorado native. Nick, you're flying into town for a couple of meetings, so we're able to get this together. But Nick, you and I chatted in September during the Denver Gold Show, and there's been a lot of developments with the project there in Brazil. But before we get into what those recent developments were starting in the winter, give our listeners a little bit of a rundown of the project you have going and where where you're starting to move into this spring.

Nick Appleyard [00:02:40] OK. So where we're at right now, with Castelo de Sonhos . So obviously we're into pre feasibility study drilling and we are advancing with that. We're quite nicely, probably high about nearly halfway through the RC drilling program on target where we expect we expect to be completing that around April this year. And that'll lead into the rest of the pre feasibility study that'll be completed in the last half of the year.

Trevor Hall [00:03:02] So let's start with the drilling. Bring us up to speed with the results  throughout the early winter. I know you put out a couple of different results and their interesting because you're you've got a different methodology, it seems like, according to the press release I saw.

Nick Appleyard [00:03:14] Yeah. Well, when we looked at our results, we thought that these infill drill results. So in some aspects, they're not exciting. I mean, we know what the drill holes are on the side of got in them. So you've got an expectation of what again? So we thought it would be more informative to the investors and know, well, if we had three meter intersection, one side, three meter in the other side l thought if we got two meters in the middle, then it's worse than expected. And if we got for meters does it's better than expected. It gives people a little bit more context on the results than just saying, hey, we got two meters at a gram wheel four meters. The diagram, it tells us whether it was better than expected because it isn't in full program. So we have expectations from each drill hole.

Trevor Hall [00:03:51] Yeah. Do you have a lot more questions to answer now from shareholders that it's a little bit a different way of going about things.

Nick Appleyard [00:03:58] We haven't the shareholders of spoke to understand that, you know, the first batch of results we released here were very positive. They were above expectation in general. So I think that I think it worked pretty well in informing people as to the things that more context on what the actual results mean without bombarding people with pages of data, which is hard to assimilate.

Trevor Hall [00:04:22] Quinton, what's your perspective as a director of this company because you're obviously known to take some different projects on and when it comes to this drilling methodology. As a director, what is your approach and do you know? What are some of those conversations like moving forward?

Quinton Hennigh [00:04:36] Yeah. To answer that question, it's best to give a little background of why I'm involved with Tristar about four and a half years ago. Leonard Krall, who is a director. He retired recently. He was with Newmont actually back in the 1990s, early 2000. So I've known Lynn for many years. He saw that I was working on the conglomerate host of Gold Systems in Australia. I gave a presentation here in Denver to a local geologic group. And based on that, he asked if I could help out with with Tristar. And I did a little bit of background work looking at the geology. The the deposit Tristar has is a conglomerate hosted gold system. So it's very in many regards is very similar to what I've been working on in Australia. It's a bit younger in age. It's about two point two billion years old, which is about half a billion years younger than most stuff. I'm working on. But it it shares a lot of similarities to two world class systems around the planet, most notably the Tarquin conglomerates in Ghana. In Ghana, you have a couple of notable mines that produce gold from conglomerates. Goldfields operation is one of the best that's producing the best, cheapest producing assets in the country. It's certainly a world class gold deposit by every stretch anyway. As I dug into TriStar looked at Castelo design yours looked at its attributes. It was pretty much a no brainer in my view. It's a very, very similar deposit to start with. Similar. There's a low sulfide, no sulfide system, very favorable metallurgy. Everything ticked all the boxes, basically. So I was very happy to come aboard. And since that time, I know I've seen Nick and his team here take this from really from the ground up and early stage project when I joined.  And these guys have taken it all the way through PEA. and now I've got Royal Gold. You know what I mean? You know, to do that. What was a very deep bear market and gold. Now come out and be in a position where they can really see the benefit from all that hard work over the next few years as gold goes up. I think it's a wonderful story.

Trevor Hall [00:07:03] That did it kind of goes into my next question. I'm just curious with being local here to Colorado. If you had anything to play with the introduction to Royal Gold and getting that stream online.

Quinton Hennigh [00:07:13] That was Nick and Scott, these guys. Yeah, that was our history.

Trevor Hall [00:07:19] So talk about bringing somebody late, having Quinton on the boards that has a wealth of information and just what that means to help move this project forward, because obviously there's some technical background that comes to the board as well.

Nick Appleyard [00:07:35] Absolutely. And brilliant. I mean, I'm a geologist by training, but I had never worked in conglomerate hosted deposits before Tristar. So we've got people in country working for us who have experience on Costello's particularly not maybe others. We bring in we brought in some external consultants who had worked on the tuck when deposits in Ghana. But for me to sort of trust them and to gain confidence in what they're telling me, I need someone I trust who I can bounce ideas off and go, hey, is this guy telling me this? Yes. So that's that's how I work. I think I work with Clinton the most irresponsible doctor Alex. And he's telling me this and Quinton because it makes a lot of sense to me or go back and questioning him on this. It just gives gives me that background to lean on so that I can then have confidence in what I'm being told by the consultants and my staff. So it's been invaluable to him.

Quinton Hennigh [00:08:24] I think one of the one example of how we work together is, well, Nick came to Australia to visit our project, at Beatons Creek about three or four years ago. And we do our see drawing reverse circulation doing there. It's it's actually quite effective. And, you know, that type of drilling has been adopted by Tristar at Castelo de Sonhos of the signing is not now on the downhole viewing. Nick. Nick and company started doing downhole della viewing in the holes. US is saying. When he told me about it. Yes. Well, I I I started doing that. That's great. It's worked out well.

Trevor Hall [00:09:04] I do want to get. I do want to hit this drilling methodology one more time, because when I was reading the press releases that were put out late, the fall drill results come back with look like three different characteristics meeting exceeding or not meeting expectations, which is when geology even comes to a very, very technical term in the terminology of a field like this. I mean, anybody can break this down, but. So how are people who are reading the new press releases coming out in the future from drilling results? Are you going to be using these three kind of. nominclatures?

Nick Appleyard [00:09:42] Probably. When we have releases focused on peeling drill results. I think we will. Yeah. I do believe it. It's more informative. We will probably be publishing cross-section so people can look at the results themselves. We always have available on our website all of the significant intersections for every single hole is available on our website all the time. But as I said, if you look at those that data you end up with. I think it's 60 or 70 pages of data, so it's very hard to assimilate and understand what that means. So I'm trying to give the investors more context for what we're seeing. And like we're saying, OK, there's there's a hole here which has, well, exceeded our expectations or here or vise versa. Maybe there's one where we're expecting to get a good hit and we got an average hit, which if you just see an average, I think that's okay. But if you're expecting to be really good, it's actually below expectations. So it just we're trying to give more context without bombarding them with pages of data and hundreds of pages of technical reports.

Trevor Hall [00:10:40] Is it your way of trying to effectively communicate with maybe novice investors, people unfamiliar with this industry?

Nick Appleyard [00:10:49] I think we're trying to get the broad spectrum. I think even even an experienced investor I know myself when I look at stock press releases, if you see someone says, oh, we've got you know, for me, there's a 10 grams. It's a full program. You really want to know, well, what was the expectation in that area? It doesn't really inform you as to the success of that drill holes. So really, we're just trying to use plain language to inform the investor. And if you actually read the stock exchange guidelines for it for management, I think they really try and push us to do that. We're really trying to take that to heart and trying to do that.

Trevor Hall [00:11:24] Well, if that part of development and drilling isn't unique enough, now you're putting in artificial intelligence and working with Gold Spot, which is fascinating. I know that team and have great conversation with them. It's very interesting to see what they've been coming up with. But you're the first company I've talked to that's partnering with Gold Spot. I would say go back and think of. So share with us your experience working with artificial intelligence and gold spot and on the project. And I guess is it meeting or exceeding your expectations?

Nick Appleyard [00:11:57] Too early in the program to tell to tell the truth. The first step in any work like this is getting your data clean and perfect and polished and organized. And even though as a geology company, an exploration company, we think we've got good data compared to what they need. It's not good enough. So we're working on this phase now of handing over the data and cleaning it, and that's going to take a month or so. Is it because of the RC drill? No, that's just general. General. I mean, it's because I had data. Your company has history. She'll have phases of drilling, different sized MSA techniques and you've got to be eligible. Hand that information over in a very orderly manner. So we're in that phase now. So we're still going. But our we've had a little exposure of artificial intelligence internally where we sort of threw out my vise president most robust of who who has worked in this a little bit. So what he's done is like opened a little window to me of what was possible. And it's not magic. You don't want people to believe that it's like a magic bullet, which is to go to all of a sudden you're going to find, you know, invent the 10 million to pull it. It's not what it what it really allows you to do is explore much more efficiently. And by being more efficient, you can accelerate your exploration programs. So those are the two messages I would get out from my expectations of efficiency and acceleration of our exploration projects. I mean, it's it's not magic. It kind of go that isn't there, but it can help you be more efficient in defining and finding it.

Trevor Hall [00:13:26] Why? It almost seems like that's kind of the overarching story of development here, as being as efficient with your drills as you can be. And hopefully that helps you save money. Is it is it saving you money?

Nick Appleyard [00:13:42] With the drilling up to tell if you're a hundred percent? I can put my hand on the bible that is saved us money and has sped up the program. And in some ways it probably saved the project and got the project forward. If we if we did not have that, we have had to do core drilling, which is much slower, much more expensive. So we would only probably got about half the meters in that we've got now, which means that resource for to be half of where it is now we probably would not have a PEA. So that optical television technology and the adaptation of that technology has aided this project sensationally well.

Trevor Hall [00:14:12] So what did what is your cost per meter for drilling right now? And does that include working with the artificial intelligence?

Nick Appleyard [00:14:20] We haven't got a cost for them yet. And working with as I said, we're just starting on that the the optical teller viewer probably adds 15, 20 percent to our RC drilling costs in general. So it's still significantly cheaper than the core alternative. But your own TV also feeds really nicely into the artificial intelligence machine learning. As an example, we're going through identifying critical horizons, MOCA horizons in the optical tellaviewer. We find we're going to find several examples of them. We've got them lined up now. We'll hand that over to gold spot. They will see if there are other markers that line up with those horizons, if there are other ways that maybe the computers can look at different layers of data and see consistent parallels in those same horizons and allow us to more efficiently map the deposit so that it's the sort of thing rather than having an expert like like Quentin or up to read lips and sit and spend months going through every image. Once he's identified a few images which meet his criteria, the computers can do it. Then very quickly.

Trevor Hall [00:15:31] Quinton, what's your mentality? You. You've kind of gone through over the last few years when it comes to artificial intelligence and drilling like that. We're pretty skeptical at first. Are you still skeptical or are you a believer now?

Quinton Hennigh [00:15:45] I'm. I'm a believer in the use of ... You call artificial intelligence. But, you know, it's really it's artificial and learning is what it is. I mean, it's an iterative program. And the computer, you know, works with. Yeah, it was algorithms to train itself and, you know, and really refine its methodology. So it just so happens to my kids are programing in that field. So I am blessed with respect, I guess. Well, on the other hand, I know I don't know. I haven't what they're telling me. But, you know, I've I've been involved with various endeavors to. To work on artificial intelligence applications for exploration. There's a fella here in Denver, Colin Barnett, who has a mining company where he's worked with. The very well-known mathematician out of Cambridge believe this, and they've come up with some software that they will in fact, they were some of the first to come up with software to explore and I think you will see it become bigger and bigger part of exploration, mining is prison, just like it has in the petroleum industry. What Nick is talking about, a lot of the applications have actually already been applied in the oil industry and now they use it extensively. Course they're better cashed up. They have a lot more capital to work with, but now that we're taking it on and mining, it will gradually revolutionize things. I think you'll see it impact all levels of exploration, everything from greenfields work all the way down to detailed work like you see it Castelo de Sonhos, where they're using data from hole to hole to hole.

Trevor Hall [00:17:34] Do you think it's a misconception to think that this type of technology isn't necessarily. Maybe it's not necessarily going to make exploration easier, but it's going to make it smarter.

Quinton Hennigh [00:17:45] Yeah, higher success rate. And that that effectively helps reduce costs. I mean, that's it translates I have success means a better return. So, yes.

Trevor Hall [00:17:57] Quinton, one more question for you. And I just want to ask you about Tristar working in Brazil overall. And like we say, do you have a number of different roles for different companies? But what makes this project so different and unique from what you've worked on? Currently working on work on the past.

Quinton Hennigh [00:18:15] I'm not going to say that it's all that unique. I mean, I'm working on conglomerate  hosted systems in Australia, for example, but that's what attracts me. I would guess if you want to call it unique, it's unique with respect to most other conventional gold systems. Most school systems are ore bodies that are sub vertical in nature and other shear zones or veins or whatnot that continue in a linear directional plan planet direction. But near vertical. Whereas what you're talking about here are beds of rock. These are conglomerates that were laid down in ancient shoreline environment and in when they were laid down, there was a bit of gold trapped with them. And these beds are quite predictable. They're taking a little bit different style of geology. Right. More like I said, you know, akin to patrolling geology. But once you latch onto one of these systems, they're big conglomerate goes postal gold systems have produced, you know, compared to most load systems have produced far more gold.

Trevor Hall [00:19:24] Nick, start wrapping things up here, but I just want to ask you about moving forward with Castelo de Sonhos what looks like a pre feasibility is in the works. Are we expecting that this year more drilling results in the next coming weeks or months or?

Nick Appleyard [00:19:41] Yeah, we'll have I have a general update coming up pretty shortly for racking up 2019. Talking about goals and ambitions for expectations for 2020. We will. The drilling will probably go through April. We'll have an update on the drilling every month. About it. Enough on that. And then we expect the the pre feasibility study we wrapped up this year. Yeah. Towards the end of the year, by the time we have everything done, all the cost estimates and reserve estimates done, that will be towards the end of the year. Resource update could come mid-year late in the summer.

Trevor Hall [00:20:12] And cash in the bank. It was like a couple million bucks.

Nick Appleyard [00:20:16] We got where we. We've got what we did. The 8 million dollar US investment from royal gold plated six point five from that. That still one point five to come the end of March. As long as we could keep on the pre feasibility study. And we raised the two million Canadian in December. So we're we're well cashed up. So the pre feasibility study, all the gold spot work, everything we intend to do through 2020 is just funded. Yes.

Trevor Hall [00:20:41] Would you predict having to go back to do a financing this year?

Nick Appleyard [00:20:47] We don't. I don't predict that we have to. I'm not going to hold you to that. If they like to know if the share price is right, the money's available under the deal is right. You're always going to look at it.

Trevor Hall [00:20:59] Well, I think the expectation is that money might be a lot easier to come this year than it was last year.

Nick Appleyard [00:21:05] Yeah, right. Yeah. And after the last five years where it's been very hard to come by. You always want to keep one eye open to make sure that, you know, if you've got the share price and you've got the right deal in front of you, you should consider it.

Trevor Hall [00:21:17] And you look. You just opened up the OTC ticker with. And remind me what that is again. TSGCF. And are you seeing and are you seeing a little bit more volume on the American side to see stuff at all?

Nick Appleyard [00:21:31] Yeah, we are. We're seeing some trading on there. You know, we've only just only just opened it up and we need it really stretching. So it's starting to market into the US and that's the idea of that market in the US. Without that is is nonsensical. So that's you know, it's an area for liquidity that we're hoping to exploit more.

Trevor Hall [00:21:50] And one last question. This is an overarching question, maybe just a little story, because before we were recording Quinton, you were talking about how you were getting a lot of connections on LinkedIn from random people. Is this a sign that the bull market is in full force?

Quinton Hennigh [00:22:02] Well, it's certainly an anomaly. I would say in the past month or so, I've got more requests from people who I've not heard of. Usually generalist fund managers who are interested in talking about gold and gold investing. So definitely a change in sentiment. What it means don't know yet, but sometimes when you start to see a lot of hedge pop up, you don't know. It's a sign things are changing.

Trevor Hall [00:22:31] Nick, as anything else you want to make sure our listeners know before we let you go?

Nick Appleyard [00:22:35] Just the only thing I would say touching on that same subject with gold prices where they are now, I think the general investor hasn't built that. It hasn't. Maybe you hadn't got high confidence in the gold price staying up. But when you see another quarter or two of earnings from the producers at these lights levels, you can see how strong their cash balances get. And I think that's really going to do a couple of things. It's going to really attract the generalists, which are going to flow into the industry in a big way because it's a real business is making a lot of money and they're making a lot of money at these prices. And you're going to see them start to get really active in the M&A cycle, which I think is all really, really good for the likes of Tristar.

Trevor Hall [00:23:15] That is Nick Appleyard, CEO of Tristar Gold. And Dr. Quinton Hennigh is the director of the company. Gentlemen, thank you so much. It's great to chat with you and be sure to see you around during conferences in the next few months.