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CEO, Jim Hesketh has refocused the direction of the company by recognizing its hidden
assets that were overlooked through the years and by building a strong management team and
Canyon Resources Corporation
14142 Denver West Parkway, Suite 250
Golden, CO 80401
James K. B. Hesketh
President, CEO and Director
Interview conducted by:
Lynn Fosse, Senior Editor
Published - January 18, 2007
JAMES K. B. HESKETH - President, Chief Executive Officer and a Director
Mr. Hesketh primary goal is to increase the value of Canyon to its shareholders by
focusing on developing positive cash flow from operations and longer term by growing the
Company into a low cost mid tier gold producer. This will be accomplished by initially
capitalizing on existing assets and longer term through the development advance stage gold
exploration properties or acquisition of operating sites. Mr. Hesketh has a diverse career
in the mining industry, over 27 years in positions covering mining finance, corporate
business development, mine operations, mine engineering and consulting with companies
including NM Rothschild & Sons (Denver) Inc., Cyprus Amax Minerals Company, Pincock,
Allen & Holt, Inc., and Dresser Industries. Mr. Hesketh also serves as a Director of
Atna Resources Limited and Apogee Minerals Limited, both publicly traded Canadian junior
gold and silver exploration companies.
Canyon Resources Corporation, based in Golden, Colorado, was organized in 1979. The
Company has a history of uranium and precious metals exploration success and can claim a
number of significant discoveries. Canyon is involved in all phases of the mining business
from exploration, development drilling, feasibility studies and permitting through project
construction, operations and final closure. The Company is evaluating the re-start of its
Briggs Mine in Inyo County, CA and the development of the Reward property near Beatty, NV.
CEOCFO: Mr. Hesketh, you have a long
history in the mining industry, what attracted you to Canyon Resources?
Mr. Hesketh: I had been a consultant
prior to coming on board, when I looked at the company what I saw was a company that at
the time was considerably depressed and needed a turn around. However, it had a solid
asset base behind it with a lot of hidden assets that quite frankly had been written off
or neglected over the years. I viewed this as a strong turn around opportunity to take a
company with a good reputation, a long history and to grow it and move it forward. It
presented itself to me as a personal challenge, so those are my rationale for coming on
Will you tell us about the vision, what has been hidden and how you are getting where you
need to be?
Mr. Hesketh: Our vision as a company
is to grow it to a solid mid-tier gold producer that produces in excess of a hundred to a
quarter million ounces of gold per annum, producing a positive cash flow and continuing to
grow the company from there. What we had as hidden assets in the company was some 900
thousand acres in mineral rights in the state of Montana. We had a remaining ore body
there called Seven Up Pete, which is an interesting gold project in and of itself. A
feasibility study was done on it in 1991 that was positive that used cyanide, but it was a
cyanide mill. We have been looking at it from the viewpoint of the gravity of flotation
operation. We also had our mine in California, The Briggs Gold Mine; it was in residual
leach and closure because at the time gold prices were down in the 300s. Today the
gold price is over $600.00 and that presents itself as a restart opportunity. Increase in
price creates increasing reserve potential, as we mine lower grade ores as well as the
fact that the property had been neglected from an investment and drilling standpoint.
Therefore, we commenced drilling and we have been announcing intercepts and results for
that program ever since. We had another project near Beatty, Nevada, which at the time
just consisted of an unconsolidated mix of land and mining oasis. Since then we have
consolidated the land positions and have actually developed a project there that we are
currently permitting. In addition to that, Canyon has a 25-year history of exploration,
the first five years of which were in the uranium exploration. Our first order of business
there given the spiking of uranium prices and a robust market, was to dust off some of the
uranium data and claim stake the land. We have developed two separate joint ventures to
move those projects forward as well. All of this has presented itself as opportunities to
build and grow a company outside of what was the main focus of the company at the time
which was essentially a law suit against the state of Montana for the taking of it 10
million ounce McDonald ore body.
What is the financial picture of the company?
Mr. Hesketh: At the end of the
quarter, which we just announced, we have $5.9 million in the bank. We have raised equity
in two different financings over the last year to finance feasibility work as well as
drilling operations. We will be looking at various kinds of equipment financing and debt
structures as well as potential additional equity to finance the operations moving
forward. With the Briggs Gold Mine, we have constructed plants, we have an equipment
fleet, and existing assets on the ground, none of which are leveraged and present a
financing opportunity for us.
What does the timetable look like in the Briggs mine?
Mr. Hesketh: Our timetable is very
solid. We can upon receiving financing, move forward into predevelopment construction. We
need to construct a leach pad, refurbish some of our equipment units and commence
pre-stripping operations for the mine. We need about a five-month preproduction period to
take the operation into production, so it can be that rapid. The Briggs Gold Mine is
currently permitted and we are continuing to recover small amounts of gold from residual
leaching of our pad operation.
Do you see joint ventures in the gold as well as uranium?
Mr. Hesketh: Our primary focus as a
mining company is in gold. It was a matter of splitting our company as well as resources,
so we chose to joint venture what was not our primary market and use other peoples
money to move that project forward. It was a matter of financial resources and people
resources as well; uranium is a specialty, so we needed to move in specialists to move
that forward. I believe that we have joint-ventured with the right people; it is a strong
team with experience in taking uranium exploration ventures right through to production.
Given the right opportunity we would consider additional joint ventures.
Have you needed to add new people to the company?
Mr. Hesketh: In the last year I
brought in a new CFO and Treasure; Mr. David Suleski. He has strong experience as a former
treasurer and controller of Golden Star Resource Ltd. (AMEX: GSS & TSX: GSC) and as a
controller of Apex Silver Mines Corporation (AMEX: SIL). He was a banker for NM Rothschild
& Sons (Denver) Incorporated. He worked for Cyprus Amax Mineral Company in their
corporate reporting group as well as site controller positions and operations. In addition
to that, I brought on Mr. James A. Matlock as a vice president of exploration. His primary
focus will be to help obtain properties as well as do drilling operations on our existing
properties and to help grow the company. His background is with Placer Dome (purchased by
Barrick Gold Corporation NYSE: ABX), Amax Mineral Company, formerly the Amoco
Minerals Company. I recently brought on a new Vice President of Operations; Stuart
Green, he is based at the Briggs Gold Mine, his responsibility is to move the Briggs mine
into production and to move forward with the Reward project in Nevada through the
permitting process and ultimately into production there also. Therefore, it is evident
that I have built a solid team of senior managers and vice presidents. These individuals
are all there with one focus, to create growth and move the company toward profitability.
Are you looking at new properties?
Mr. Hesketh: We are constantly
reviewing opportunities. This is a business where the land is important; underlying every
mining company there is a real estate company. If you do not have land that you can
explore, develop or conduct mining on, you are not growing as a company. That is a
continual effort, to review properties, metals and acquisition opportunities. When the
time is right, we will also review merger opportunities.
Why should potential investors be interested in mining and specifically in Canyon, and
what separates you from other gold companies?
Mr. Hesketh: Why mining? If it
isnt grown, it must be mined, which is a saying in our business. Everything
that builds our society comes from the ground; it is the fundamental underpinning of our
societies. Therefore, if you want to invest in the true underpinnings of our economy;
mining, oil and gas, agriculture are key places; the commodity businesses. Those markets
have been very robust over the last two or three years. They are cyclical industries, with
great opportunities to invest and make strong returns throughout the cycle, both short and
long. That is why mining and why you should invest in commodities. What distinguishes
Canyon Resources is that number one; our market cap is currently quite low, $35 to $38
million, but we have a strong asset base in the company, a strong management team, and a
strong board. We have a focus entirely on moving the assets that we do have as well as
picking up additional assets and growing the company so it is a true growth story. What
are also unique in our sector in that we are completely U.S. listed, we are U.S. domiciled
and we operate strictly in the U.S. at this time. It is an American story, we trade on the
AMEX stock exchange, we have a liquid listing and that provides opportunity as well for
investors. Many of the Canadian competitors that we deal with operate under a lesser
reporting standard than what we have to, they tend to have a lot less liquidity and are
controlled a lot more tightly by brokers and dealers. I feel that makes us unique in our
Do you have any final thoughts that our readers should take away from the interview?
Mr. Hesketh: What I hope people take
away from the interview is that Canyon is a story that is different than it was in the
past. It is a forward-looking story, one of growth, one of building and one of moving the
company towards cash flow. We have a team here that is dedicated to accomplishing those
tasks and accomplishing it for the long-term not just the current price cycle or current
project. We are in it for the long run. Everyone of my senior team members all have 25 to
30 years experience in the business. We are all professionals. We have been in this our
entire lives. That is the key point. We are here for the long-term. I invite our
shareholders and investors to watch us grow and to be there to enjoy the profits from that
over the long term.
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