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Lake Mining Inc.
Lake Mining Inc.
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Given the amount of shares that are outstanding, the quality of
our projects, the exploration successes that we have generated thus far, the strategic
moves of the company in its recent acquisitions and the experience of the management team
in developing projects through to production, we feel that Houston Lake has solid momentum
for continued growth
Exploration & Development
Houston Lake Mining Inc.
2892 White Street
Val Caron ON Canada P3N 1B2
Grayme Anthony, P.Geo. F.G.A.C.
M.B.A., President, CEO, CFO
Secretary-Treasurer and Director
Interview conducted by:
Lynn Fosse, Senior Editor
Published August 3, 2007
E. Grayme Anthony
President, Chief Executive Officer, Chief Financial Officer, Secretary -Treasurer
and Director, Houston Lake Mining Inc.
Mr. Anthony has been involved in the exploration for
precious and base metal deposits in Canada, South America, Africa, and Asia since
1983. He has experience with such companies as Amoco Petroleum Co. Ltd. - Mining
Division, Echo Bay Mines Ltd., Canhorn Mining Ltd. and United Reef Petroleum Co.
Ltd. In 1990, Mr. Anthony formed his own geological consulting proprietorship, which
has provided exploration project management services to such clientele as Ontario
Geological Survey, Paterson Grant & Watson Ltd., Noramco Exploration Co. Ltd., Citadel
Gold Mines Ltd., and Consolidated NRD Ltd. In June of 1994 Mr. Anthony joined Norcan
Resources Ltd. (Norcan) as Senior Geologist. In September of 1994, he was promoted
to the position of Vice President, Exploration where he was instrumental in setting up and
directing Norcans business interests in West Africa and amassing a portfolio of
properties in Ontario. Mr. Anthony reestablished his exploration consulting business
in October of 1996 and his clientele has included AMI Resources Inc., Norcan Resources
Ltd., Quincunx Gold Exploration Ltd. and Namex Explorations Inc. Since 1997, his principal
focus has been Houston Lake Mining Inc.
Mr. Anthony holds a Bachelor of Science Degree
(Honours) in Geology obtained in 1983 at Concordia University in Montreal and a Masters of
Business Administration obtained in 1986 at The University of Western Ontario. Mr. Anthony
earned his Professional Geoscientist (P. Geo.) designation in British Columbia in 1995
(accredited in Ontario in 2003) and was awarded the designation of Fellow of the
Geological Association of Canada (F.G.A.C.) in 1997. He is a member of the Canadian
Institute of Mining and Metallurgy, and the Prospectors and Developers Association of
Houston Lake's objective in the short term is to become a gold producer by surface
mining our West Cedartree gold project. The Company has a total of 24,654,989 common
shares issued and outstanding.
CEOCFO: Mr. Anthony, why is Houston Lake positioned today
for resources for tomorrow?
Mr. Anthony: Firstly, we undertook economic
studies of mineral trends and identified a number of commodity areas that seemed
promising. We then went out with that in mind as the basis for our acquisition strategies.
We positioned ourselves first in platinum and palladium with a high quality property in
the same vicinity as the Canadas only open-pit PGM producer, the Lac Des Iles mine
of North American Palladium Ltd. (AMEX-NAP; TSX-PDL). PDL has since put in a fifteen
thousand tonne per day mill. Our Tib PGM property covers the second largest PGM target in
the area and the property that is now under option to an Australian company, Magma Metals
Limited. Magma is spending $3 million over the next five years to earn a 70% interest in
our property. Secondly, we moved into rare metals after identifying tantalum as a
strategic metal. Tantalum is used in such things as micro-circuitry. The year after we
acquired the Pakeagama Rare Metals property, tantalum prices ballooned ten-fold over the
However, despite their high quality these properties are not our primary focus. Our
priority is the West Cedartree Gold Project near Kenora, Ontario. The area was
Ontarios principal center of gold mining at the turn of the nineteenth century. The
area has largely been overlooked with subsequent gold rushes in the Timmins and Red Lake
areas of Ontario. We positioned ourselves early by solidifying our land position before
gold started to run up in 2003 and we have since added a number of properties culminating
in an announcement earlier this month with the acquisition of the Dubenski property. Now
we have assembled eight adjoining properties with gold resources on three of them. We are
now seeking to prove-up and expand upon these resources to justify a mill on site.
CEOCFO: Please tell us about the recent results of the
Mr. Anthony: Earlier in April we completed an
extensive drilling program targeting Dogpaw #1 Vein, which is a property we picked up last
year. On April 10th (2007) we announced that we intersected 29.9 grams of gold
over 7½ meters, which is an extremely exciting intersection and the good results
continued. Fourteen of the seventeen drill holes of the program intercepted values in
excess of 3.3 grams of gold and our deepest drill hole of the program intercepted 7.3
meters grading 6.21 grams of gold, so lots of potential for further expansion to depth.
With the addition of the Dubenski property in May and the three promising gold zones on
the adjoining properties, there is great potential to develop more gold resources on the
West Cedartree project.
CEOCFO: How do you manage cost-effective exploration?
Mr. Anthony: It goes right down to the fact that
we acquire the properties for what we believe is an affordable price. We have subsequently
earned into virtually every property that we have aimed at. We have therefore been highly
efficient in building our property portfolio. We manage all aspects of our costs to keep
our overhead low in the office and in the field. For instance when we look for a drilling
company, we scour the earth to find those that are available and generate a number of
quotes so that we are getting the best price at the right timing for us. It wasnt
until recently that we started spend dollars to increase awareness in the company. We only
did so once Houston Lakes asset base of properties has been established.
CEOCFO: What is it that you and your team know that
allows you to pick good potential properties and what is special about Houston Lake and
Mr. Anthony: First of all, we strive to identify
promising commodity sectors before that commodity rises in price. By being early we can
target and acquire properties with high potential before significant competition enters
the sector. The other is persistence. To give you an example, the Dogpaw Lake property has
been the focus of our recent exploration efforts and drilling. we negotiated to acquire
this property for over four years before the deal fit what we perceived to be a good price
for the ground. With Dubenski, we have been in negotiations for over a year so these
things take time and, sometimes, innovative thinking. On the Dubenski property, we came up
with an idea of structuring a $10.00 per ton cost allocation of any future mining as an
alternative to future cash payments. This deal structure would minimize further dilution
of our outstanding shares on an important property acquisition.
CEOCFO: What is the financial picture like for the
Mr. Anthony: We are raising $2.5 million that
was announced a week or so ago. We are in a fairly good spot at the moment with over $1
million in the till.
CEOCFO: Are your projects 100% owned?
Mr. Anthony: We have just recently obtained a
100% option on the Dubenski property. All the rest of the properties are now 100% owned or
in the process of transfer to 100% ownership.
CEOCFO: Why is that preferable for you?
Mr. Anthony: It gives us a lot of flexibility
down the road if we wish to bring in any partner. Our partnership with Magma Metals
Limited of Australia is a good example. They are earning a 70% interest in our Tib
Platinum Group Metals property. Our initial 100% ownership left us with a significant 30%
carried interest at the end of the day.
CEOCFO: You have a goal of production in the
short-term; what should people be looking for?
Mr. Anthony: Our strategy has adapted with the
new acquisitions. Our key goals are to earn in to these projects, prove up the resources
that already exist there and expand upon those with further exploration. Consequently, we
have applied for a mining permit. While the permitting process is running its course, we
continue to focus on expanding the existing gold resources. We are hopeful that should the
resources prove up on these properties that we will be in the position to justify a mill.
Near-term goals I would say is proving up of existing historic resources and expanding on
the resource base we now hold.
CEOCFO: With exploration going on worldwide why
Mr. Anthony: My experience has been global and
Ive looked in Africa, Asia and South America as well as North America. To me the
assurance of land title that you get in a first world country, the talent of people to
staff your projects are important reasons. There is also good infrastructure and positive
tax regimes in Canada. Ontario has tremendous mineral potential. Weve identified
regions of the province that are relatively under explored. The Kenora region where our
West Cedartree Gold Project is located has not seen a lot of exploration since the turn of
the last century, so that presents us with a tremendous opportunity.
CEOCFO: Address potential investors; why should they
be looking at Houston Lake and what makes it stand out from the many other companies in
Mr. Anthony: There are a lot of good companies
out there. Given the amount of shares that are outstanding, the quality of our projects,
the exploration successes that we have generated thus far, the strategic moves of the
company in its recent acquisitions and the experience of the management team in developing
projects through to production, we feel that Houston Lake has solid momentum for continued
growth. We are in the process of raising public awareness of the Company; its not a
story that everyone has heard of. We like to think we are an undiscovered gem. There are
many companies out there that are interested in identifying a property and then bringing
in a major company to form a joint venture. However, Houston Lake has the full capability
in our board of directors and in our management to bring a junior company from project
concept through to open pit and underground production. We have a lot of strengths that
other companies may not have.
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