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Interview
conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published –
January 20, 2012
CEOCFO: Mr.
McLean, you are transitioning new opportunities into value, would you tell
us about the philosophy of Transition Metals?
Mr. McLean:
We formed Transition Metals to develop and advance new gold exploration
opportunities in prolific and emerging mining districts in stable locations.
To that end, Canada and more specifically North Eastern Ontario has
developed as our main focus area. The company is founded by a core group of
technically strong explorationists and developers that have worked for major
and junior exploration companies in the past, found mines, and know what it
takes to add real value in the mining sector. The company’s business model
is based on the project generator exploration model. We use our in house
expertise to identify new low cost exploration opportunities that we either
advance on our own, or through strategic funding partnerships with other
exploration companies in exchange for cash, shares and other forms of
carried interest. Most of the projects that we have generated so far
represent brand new early stage discovery opportunities with huge upside
potential. Because these opportunities are generally thought to be somewhat
risky, we like the project generator model as it helps us mitigate some of
that risk and allows us to keep our capital structure in good shape. Our
business model allows us to employ a large percentage of our financial
resources to generate an ever expanding array of gold projects providing the
investor exposure to more chances of
 participating in a major discovery and
the high level of value addition that follows. With lots of projects, we
have many irons in the fire to hopefully be rewarded with a major discovery.
To date, we have disclosed five projects in northeastern Ontario and one in
British Columbia and expect to be able to announce more in the New Year.
CEOCFO: Does Transition Metals have a
deliberate strategy for focusing in northeastern Ontario?
Mr. McLean:
Our combined management team has greater than fifty years of experience
exploring and discovering in Ontario, so we feel we have a competitive edge
here. We understand where a lot of the opportunities are, have a good
network of contacts from prospectors up to senior management in major mining
companies based in Ontario. We know where the opportunities are, and what
type of opportunities our potential partner companies are looking for.
However, having said that, we are looking at different opportunities and
different projects in other jurisdictions, which include some in British
Columbia as well as other opportunities in other parts of North America. To
date our projects are only in Ontario and British Columbia. Our main
interest is to work in jurisdictions we feel are stable and allow us to
pursue our activities while controlling cost.
CEOCFO:
When you look at a project, how much is technology and how much is instinct;
where does the science meet the experience?
Mr. McLean:
We employ our technical expertise and apply scientific method to mitigate
the risk of the unknowns associated with exploration. To distinguish what
represents a good opportunity and what does not requires an open mind, some
experience and the ability to think creatively. A critical aspect,
particularly with respect to gold exploration is having boots on the ground.
We have been successful by having talented people aggressively applying
themselves to the task of getting out there and beating the bushes. It is
not an armchair approach.
CEOCFO: What are the different projects
Transition Metals has and what is happening on the ground at each of them
today?
Mr. McLean:
The main project is called the Haultain Gold Project, which is located in
northeastern Ontario near the town of Gowganda. Interestingly the gold
potential was not previously recognized in this area because it is near the
heart of an old silver camp. Our property, however, has a regional
framework, the key lithologies and a style of mineralization that makes it
really much more analogous to areas like Kirkland Lake and Mattacheawan to
the north of our property. We were introduced to the property by a
prospector by the name of Sherry Swain. She presented us with a grab sample
that was running about 15 grams per tonne that kindled our interest in an
area with no history of previous gold exploration. We went in there in 2010,
opened up the area with a number of shallow trenches and discovered the
Annie’s Ladder showing area, which occurs in an altered syentite, very
similar to what you would see in places like Kirkland Lake. The
mineralization we exposed at surface is associated with an extensive network
of extensional quartz veins, some of which contained splashes of visible
gold. We opened our initial discovery trench up to an area that was about
100 meters long by 20 meters wide. We did an average of all of our channel
samples within this area and they were grading about 3.5 grams per tonne.
Encouraged by these results we continued to open up a number of other
trenches along strike from this occurrence to expose approximately 1.2
kilometers of favorable geology and new gold occurrences. Mineralization in
places returned some bonanza grades including up to 95 grams per tonne over
narrow widths and provided us with some spectacular samples of visible gold.
We have also observed wider zones at surface including 6 grams per tonne
gold over 7 meters. We have opened up other trenches to the north and the
south of the main trend, which have exposed additional syenite intrusions,
also hosting elevated gold values. To date we have put in 15 drill holes
into the project and are continuing to drill towards the end of the year.
Other projects in Ontario
include Jumping Moose, Bayly, Pipestone, and Doherty Lake. Following our
business model, two projects, Jumping Moose and Pipestone have been optioned
to other parties who are actively advancing these projects. These projects
are examples of how we can generate an interesting project for a minimal
investment and leverage our in-house exploration expenditures on that
property through partnership with a third party. We look to establish a good
working relationship with partners who can help us recoup our initial
investment in the project, see money go into the ground, and expose our
shareholders to the upside of discovery through the issuance of shares. We
always keep a retained interest in the project and ultimately anticipate
receiving royalties. We like to work closely with our partners to try and
assure our mutual success.
CEOCFO: You mentioned that the area of
focus project for Transition Metals is in the heart of the historic Gowganda
silver camp. With all the activity in the mining sector how has this area
remained under the radar?
Mr. McLean:
In this particular project area, the rocks that we are interested in are
older archean rocks, similar to what you would find in and around the
Timmins and Kirkland Lake gold camps. The silver camp is located very close
by, but in younger proterozoic rocks of the cobalt embayment that overlie
our formations of interest. Historically, people working in the area focused
on those proterozoic rocks with a purposeful determination to extract
silver. In fact, almost 80 million ounces of silver came from these
formations from 1906 in to the 1980’s – the bulk of which came from the
Obrien Mine which was located less than 1 kilometer east of our gold
discovery. Despite the proximity of the gold find to the old silver camp it
appears previous explorationists did not get past their focus on the silver.
The project is really a good example of how you can hide something pretty
easily, even in the midst of a very prolific mining area, as well as an
example of how one always needs to keep your mind open to more than one
possibility.
CEOCFO: Transition Metals became a
public company this year; what is the financial position today, and how far
will that take you?
Mr. McLean:
Originally, we had raised about $1 million of private money at .10 cents,
.20 cents, and .35 cents. We did an initial purchase offering this past
summer where we raised $3 million and we offered units; this included a
common share and a full warrant for $0.35 cents or $0.40 cents for a
flow-through share. We completed quite a bit of drilling and ground work
this fall, and at the end of this year we will still have about $2 million
in the bank. Based on our current plans, this should get us well into 2013
if we have to but we may look to raise additional capital if the right
opportunity comes along when the markets have turned around or we have some
great results to leverage that financing.
CEOCFO: Has the investment community
started to pay attention to Transition?
Mr. McLean:
At last count, I visited with 123 brokers, analysts, and investment bankers,
so people are aware of us out there. We are on a lot of peoples’ radar
screen, however we are not seeing a lot of volume in our stock. We are a
tightly held company with a very well placed stock. Currently, approximately
40% of the stock is in management’s hands, which includes parent company HTX
Minerals’ 25% stake. The remainder of our stock is well placed with
investors who seem to believe in our business model and share a longer term
vision of success for the company. Our key challenge has been generating new
interest in the market during a difficult period. We need to keep the story
moving along. We have put quite a few press releases out there with really
great news. We will continue to advance our strategy and generate the kind
of news that keeps the attention on us. Hopefully, once things turn around,
we will see a lot more trading volume.
CEOCFO: Why should, investors pay
attention to Transition Metals today?
Mr. McLean:
One of the key things you want to look at in an investment like this is who
is running the companies and who are the people involved. My background is I
have 24 years experience with Falconbridge Limited and XstrataNickel. During
that time I was able to maintain a good track record of discovery,
culminating in my receipt of the 2004 PDAC Prospector of the Year Award for
my role in the discovery o the Nickel Rim deposit in Sudbury. Greg Collins,
who is our COO, also has a great track record of discovery in Manitoba, Viet
Nam, and northern Quebec. He has also been vice president of a junior mining
company in the past. Tom Hart, who is our VP of Exploration, is an Ontario
renowned geologist who has also received an Ontario based award, discoverer
of the year for his work in the province as well. So we have a good strong
technical team, with a good track record of discovery.
Our CFO, Anna Ladd has
assisted in the management, development and financing of a number of public
exploration and development companies. In short, we have a strong board and
technically strong management team with depth of experience in public
company management, governance, marketing and finance.
We feel we are well equipped
to identify good projects, and make the key decisions regarding how we
balance risk and reward for our shareholders. Discovery represents the
highest value addition phase in the mining cycle. Our project generator
business model allows us to participate is as many discovery opportunities
as possible while mitigating some of the risks inherent to exploration.
As explorationists who have
tasted success before, our main motivation is to taste it again. It’s kind
of an addiction.
CEOCFO: What should people remember most
about Transition Metals?
Mr. McLean:
We are a project generator based exploration company with a focus on gold in
northeastern Ontario. We have a great key project based around our new
discovery on our Haultain Property near Gowganda and an expanding group of
new projects and partnerships. For a new company, we have demonstrated that
the application of our strategy has been successful. We expect to disclose a
steady stream of results from our ongoing field activities, new acquisitions
and partnerships in the New Year and think that we are a new small market
cap gold explorer that deserves to be watched.
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