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Having experienced success analyzing the El Capitan property, El
Capitan Precious Metals, Inc. is now excited about the possibilities that exist for
platinum, where the need for this metal goes beyond jewelry into fuel cells for hydrogen
El Capitan Precious Metals, Inc.
14301 N. 87th St., Ste 216
Scottsdale, AZ 85260
Charles C. Mottley
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
October 20, 2005
CHARLES C. MOTTLEY, PRESIDENT.CEO
For the past 40 years, Charles C. Chuck Mottley has been involved in the
mining equipment business and the operation of mining companies. His present position, as
president and CEO of El Capitan Precious Metals, Inc., capitalizes upon his twenty-four
years of experience as CEO and Chairman of the Board of Gold and Minerals Company, Inc.
Under the leadership of Chuck Mottley and
Larry Lozensky, the President and COO of Gold and Minerals, G&M raised over five
million dollars in capital for exploration and development for its mining properties.
Chuck Mottleys mining career has
spanned several decades and has included projects in both North and South America. His
works has encompassed every facet of the mining industry from chief operating officer of a
placer gold mine, to exploration projects for precious metals.
A native of Virginia and a graduate of Hampden-Sydney
College, Chuck Mottley is the author of five books and the recipient of the Writers
Award from Logos Magazine. He is the founder of the Fatherhood Foundation in Scottsdale, Arizona,
and on the board of directors of Mirror Ministries in the same community.
Chuck Mottley, who early is his career
coached in high school and college, also served as a volunteer high school assistant
football coach for six years in Scottsdale, Arizona. At that time, he authored the book,
The Turnaround From 0-10 to 10-0, which provided a counterpoint to
The father of four, Chuck Mottley and his
wife, Linda, make their home in Scottsdale, Arizona.
Company Profile: El Capitan Precious Metals, Inc.
El Capitan Precious Metals (ECPN), Inc. is an exploration stage company that owns a 40%
interest in the 1700 acre El Capitan mine located near Capitan, New Mexico as well as a
joint venture and 20% ownership of 13 mining claims and other assets known as the C.O.D.
mine located near Kingman, Arizona. In addition, the Company has contractual rights to the
1620 acre Rainbow Valley Mine and owns the Weaver mine, both of which are located near Phoenix,
Currently the Company is concentrating on
three specific projects. Each project is independent of the others and each has
significant potential for financial gain.
El Capitan Mine.
This mine, located near Capitan, New Mexico, has been of interest for many years. The U.S.
Government performed extensive drilling in the 1940s to determine the quantity and
grade of iron reserves. Most recently, in June 2005, AuRIC Metallurgical Laboratories of
Salt Lake City announced that initial assays on ECPNs head ore indicated significant
amounts of precious metals. Specifically the indications were of gold and platinum
along with other precious metals.
In December of 2004 the Company secured the
services of Dr. Clyde Smith, a renowned geologist, to team with AuRIC Metallurgical
Laboratories and further evaluate the precious metal content of the mine. He personally
supervised a 2,500 foot drilling project with over 400 samples tested for mineralization.
The final report on this drilling project is expected to be released by November 2005.
In early September Dr. Smith released a
preliminary draft report on the first 1,082 feet of the drilling project. The report
inferred over 11 million tons of mineralized ore with approximately 795,120 ounces of gold
The Companys plan is to sell this
property to a major mining company using the data obtained from Dr. Smiths final
report to support the sale. The final report is expected to be released by November
Recovery Project. The Company is working on a precious metal recovery
procedure. Five different ores from Nevada, Arizona and Colorado are currently being
tested. The bench tests so far have shown the recovery of precious metals.
The Company has set up a pilot recovery
operation in Colorado and are developing a process that can be increased in size, quantity
and quality of recovery as we move forward. Information will be forthcoming when
Properties. The Company currently is in negotiation for several properties with
potential for values in precious metals, uranium or other saleable commodities. Claims
have been filed on over 400 acres on the uranium property located in California.
Mottley, you have a long history in this area; why are you with El Capitan?
Mr. Mottley: I took control of some gold and minerals
companies back in 1978 and that included Gold and Minerals Company, which was the original
company that held the El Capitan mine and some other assets. Gold and Minerals Company
stock does not trade; however, it did have a number of shareholders. Gold and Minerals
sold El Capitan Precious Metals, which did a reverse merger and Gold and Minerals sold to
El Capitan Precious Metals 40% of the interest in the El Capitan mine for 36 million
shares along with some other assets and mining properties, and $100 thousand, which we
used in the drilling program at that time. That is how I got involved and took over
management and was the sole officer and director for about a year with El Capitan Precious
Metals, Inc. We raised some money and with that, we were able to hire some really good
people for our management team.
CEOCFO: Will you
tell us about the mine?
Mr. Mottley: We have expanded the El Capitan mine; it
was originally just about 140 acres and it is now over 600 acres. We have spent millions
of dollars drilling. We have gold and platinum group metals there. The value is about
50/50 platinum and gold. Stillwater Mining Company (NYSE: SWC) has a palladium/platinum
mine and that is the only one in North America that is operating. We think that the
platinum reserves are up in the same category as Stillwaters platinum reserves. We
are very excited about this property. We think the final report is going to reflect
some great tonnage and values that we have already been getting that is going to make it a
tell us about the market for platinum.
Mr. Mottley: Platinum sells for twice that of gold. It
sells for over $900 an ounce. It is used in jewelry as well as the upcoming market fuel
cells and the demand is going to be greater than it is today. There is a limited amount of
platinum. Platinum is very important because it resists heat at about 3000 degrees; some
platinum group metals even go higher than that. That is important for fuel cells because
it can resist heat. Fuel cells are hydrogen driven and we have a problem in this country
with foreign oil and fossil fuels. I think that nuclear power and hydrogen power are the
two coming things. Hydrogen fuel has been around awhile and they are getting the cost down
slowly but surely. Nuclear power has been around a long time and it looks like it is going
to make a comeback.
CEOCFO: Do you
have iron resources there?
Mr. Mottley: Yes we do! We are an exploration company
and we are in transition from getting into production. L. Ronald Perkins heads up our
precious metals division, which has a pilot plan. We have five different properties that
we are testing in the pilot plan using some new metallurgy and we think that will be very
successful, we are just waiting to get some results of some tests that we are running. We
are in transition and as an exploration company; you go out and try to find the best
properties that you can. I have looked at hundreds of properties over the last few years
and we just settled on a few, but we are always looking for property. We are diversified
and we have three iron ore mines. We have about two-and-a-half million tons and our El
Capitan mine will probably have some more tonnage after the final report comes out. We
have 30 million tons of iron ore that is inferred and that is in our mine here on 1,620
acres just southwest of Phoenix. We have been looking at other areas and the possibility
someday of getting in the direct smelt business; we have been holding off on that for the
time being but it is on our radar screen, and we think that is the future of the steel
business and the iron ore business.
CEOCFO: Is there
any other property that you are looking at?
Mr. Mottley: We are looking at a uranium property. The
price of uranium in the last year has gone from $8.00 a pound to $30.00 a pound. We think
that it could easily go from 50 to $100.00.
CEOCFO: When you
look at a property; how much is science and how much is your gut feeling and instinct?Mr. Mottley: I hate to say this because it does not sound
professional but it is the truth; I go a lot on gut feeling and I have looked at thousands
over the last forty years that I have been in the mining business. My gut feelings have
always been right. Now, that does not mean they will be right in the future but they have
always been right on properties. That does not mean anything; no one is going to buy a
property or put it into production based on my gut feeling. What you have to do is go out
and do surface sampling and claim the property and if it is open, you go and file claims
on it and you do certain tests and assays, and from there you move on to a drilling
program. At El Capitan, we have a geologist, Dr. Clyde Smith who is one of the best in the
business and very well respected in the industry. He has been at this for nine months for
us and he supervised the drilling program, which cost a lot of money; we started out
drilling at 100 ft, and down to 200 ft. Clyde Smith said, I think we have to go 300
ft., but we may have to go 400 ft. We ended up drilling 400 ft. We still have not
found the boundaries of this property. That is why we started with 140 acres and went all
the way to over 600 acres. We go into this in a very orderly way, and my gut feelings do
not mean anything unless we confirm it and apply all the scientific methods from geology
to metallurgy. Then you have to come out and have enough values in there, where you can
set it up with somebody else and if you are going to put it in production yourself, it has
to make sense.
CEOCFO: How do
you go from an exploration company to a production company; what is involved?
Mr. Mottley: Last October we hired a metallurgist that
we thought was very gifted. We raised enough money to have him in the operation and in
January, we hired L. Ronald Perkins who was a good friend of mine. We hired him to run
that division. I said lets research properties and find out which properties we
could put in production ourselves that did not have a big capital cost. We can go to
outside investors and raise money, but before you do that, you have to have a pilot plant
to show values. What we are hoping for is that when we sell the El Capitan mining company
to a major mining company that the down payment will be enough money to put the other
properties that we have been testing into production. Normally in the mining business you
get a down-payment and 5% royalty and 6% carried interest.
CEOCFO: You have a solid plan for the future; why should
investors be interested now?
Mr. Mottley: I think our stock is undervalued,
lets just say that we sell the Capitan mine and we would get a dollar share for our
shareholders, we have other assets and I think that within the next thirty or sixty days
we will be showing investors where our cash flow is coming from. This will go towards
earnings. Newmont Mining Corporation (NYSE: NEM) for instance sells for 46 times earnings,
the second largest gold company sells for about 40 or 50 times earnings. Stillwater Mining
Company sells for 35 or 40 times earnings. In mining companies earnings per share is
always higher than in other industries and the reason is they have good assets, and
something to back the earnings up; that is why investors are willing to pay a higher price
for the stock. Lets say we are just 10 times earnings, if we make a dollar a share
next year, then we are looking at a ten-dollar stock. Most small mining companies that are
in production sell for at least 20 times earnings. Next year, my goal is to make a dollar
or two dollars a share, and with that I think we will have a stock price that is worth
fifteen or twenty dollars. That is my goal and I think I have some good assets behind me
to back up that goal. This stock is very much undervalued and we are getting reports back
that we have reported on our mine and we do not understand why the stock is not selling
for much higher. Our experience is that in the market place, that eventually, it will even
itself out and reflect the true value of any company.
CEOCFO: In closing, you were recently elected to the board-of
directors for the National Mining Association; tell us about the significance?
Mr. Mottley: I went to the National Mining Association
annual meeting in Washington D.C. last week and at that time was elected to the
board-of-directors. When you look at the board-of-directors, it is a great honor because
all the leaders in the industry are on that board, from Placer Dome (NYSE: PDG) and
Barrick Gold (NYSE: ABX) to Newmont Mining and all their CEOs. We have Peabody Coal
(Peabody Group) and all the big coal companies; there are also the big companies who
supply equipment like Caterpillar Inc. (NYSE: CAT) and those companies. It was an honor,
but I do not so much take it personally, its a reflection of our company and there
are a lot of people out there that recognize we are an up and coming company so, they want
to put someone on the board.
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