Mega Precious Metals Inc. (MGP-TSXV)

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August 5, 2011 Issue

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Going from 30,000 Ounces of Gold in 2010 to 1.8 Million Ounces in 2011, with a Projection of 3 Million by Year’s End, Mega Precious Metals Inc. is Aggressively Growing Value at their North Madsen, Headway and Monument Bay Projects

James Rogers
President & CEO

Mr. Rogers is a registered Professional Geoscientist (Ontario) with over 30 years’ experience in the Canadian mining industry. Jim was most recently the Regional Exploration Manager of Goldcorp Inc. in the Red Lake Camp. Jim was awarded the CIM Professional Proficiency metal in 1988 when he was Chief Mine Geologist at Dickenson Mine, predecessor to the current Red Lake Gold Mines. The first exploration drill holes into what ultimately became Goldcorp’s High Grade Gold Zone were drilled on Jim’s watch. While at Eskay Creek Mine as Chief Geologist, Jim was part of the team that received the E.A. Schultz Award for Mine Development.

Company Profile:

Mega Precious Metals is a Canadian precious metal exploration company with projects in Red Lake, Manitoba and Nunavut. Mega is committed to an accelerated growth strategy and remains optimistic about commodities in general and the precious metals outlook in particular.


Backed by a team of experienced mining experts Mega Precious Metals is well poised for rapid expansion through quick response to new opportunities and changes in the market.


Resources
Precious Metal Exploration
(MGP-TSXV)


Mega Precious Metals Inc.
Suite 401, 1113 Jade Court
Thunder Bay ON Canada P7B 6M7
Phone: 807-766-3380 or Toll Free: 877-592-3380
 

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – August 5, 2011


CEOCFO: Mr. Rogers, what is the master plan for Mega Precious Metals?

Mr. Rogers: Our strategic business plan is to move forward a number of projects that we believe we will be able to get cash flow from, basically, creating value. We have a base in Red Lake where we have our North Madsen Project. We are hoping to get over a million ounces there and put the land package together and get more there. We have our Headway Project, which is targeting a high-grade zone in the hanging wall of the Red Lake Gold Mine. Monument Bay is our main asset. We are basically looking to take that to production or at least show that it has some good value and will put some net present value on the table. Basically, we are developing resources. We have gone from 30,000 ounces last year to now 1.8 million ounces and we are hoping that by the end of the year we will be over three million ounces. Therefore, we are growing value very aggressively and we believe that you have to be aggressive to be successful. My team is mining based and exploration based, I have basically been working in mines most of my career, so strategic business planning is my forte and we are basically running it as you would run a bigger company that way.


CEOCFO: Do you own your projects 100%, or do you do joint ventures?
Mr. Rogers: Yes we do. With Headway, we have an option there for 100% on the back end. It is the same on the Madsen, where we will own 100% with the option payments. Monument Bay we own 100% and Blue Caribou in Nunavut, we own 100% as well. The Satterly Gold Project we just picked up as an option, but an option to earn 100%.


CEOCFO: What is your approach at Mega Precious Metals and what are you doing that may be a little bit different than some others in the industry?

Mr. Rogers: Using Monument Bay as an example, a couple of years back we were looking for an asset that would be an advanced project and I looked at a 43-101 that Rolling Rock had. I basically put together what I thought it could be or should be, and put present value numbers to it. I took it to our internal group and we felt that this was something we could really make something out of. So we got the project. We basically have done what we said we would do already, but now we are finding it has so much more potential because once you start doing the work you actually see more potential. We are going at it from an economic standpoint. We look to find out what the potential in the present value of this asset is and how can we make it happen. We see the vision, make a plan and then do it through reverse engineering basically. Everything we are looking at has defined economic goals.


CEOCFO: Is it easy to get equipment today?

Mr. Rogers: Equipment is easy to get, people are the real challenge.


CEOCFO: How does Mega Precious Metals attract talent?

Mr. Rogers: For the most part you search through the people you know. You try to get that network out and try to get the mining people that you know. Other than that recommendations from other people; we can go through the head-hunter route and we may ultimately have to do that with some people. Ideally, you are hiring people that are proven and you know them. The relationships in a company are very important in terms of having that synergy to make things happen. A good example would be my COO that I hired Glenn Kuntz. I worked with him back in Red Lake at the Campbell Mine. We are both very aggressive in terms of making things happen and have a vision. We are here to do stuff, we are not here to sit back and watch everything happen.


CEOCFO: What is happening today on the ground with the various Mega Precious Metals projects?

Mr. Rogers: At Monument Bay we currently have two drills going there and we are just waiting for a trenching permit because we believe that we can do some trenching. We have been focused on basically filling in the underground proposal for an advanced exploration program. We are permitting for an advance exploration program, and we will be submitting that at the end of this month, so we need a mine closure plan. We are just completing our NI 43-101 report that we did. We shifted one of the drills to delineation drilling of what we believe would be an open pit on the west side of the property, so that potentially doubles the potential of the project. Originally when I looked at it, I thought it was 80,000 to a 100,000 ounces a year at $550 to $600 an ounce, at about 1,200 tonnes a day around 8 grams. Looking at it now, we potentially have open pit material and we could probably run around 3 grams, 2,000 or 3,000 tonnes a day, which would potentially move with the underground and the pit, to 160,000 to 200,000 ounces a year. Therefore, it basically doubles the potential of what we could do there. We are focused on getting measured and indicated and getting a Preliminary Economic Assessment (PEA) at the end of the year that shows very positive economics on the project. In Madsen, we have been drilling for two years, and we are almost at the point where we will have a 43-101 done there so we are targeting to have a 43-101 report done by early September. Headway, everything that could go wrong has gone wrong in terms of the drilling progress. I think my credibility on timing is pretty much zero. I told people six to nine months and it has been more than twenty months, but we are very close to the target with both holes and we are doing everything we can to get there. We still believe the target is real. The geology has been proven, we just have to get the drill down there and find some gold. Blue Caribou I have not mentioned too much, but it is up in Nunavut and now that Xstrata is taking charge of the Hackett Deposit, we believe that they will need a deep water Port up there and they are a company that can help make that infrastructure happen. I believe that if that deposit was in Thunder Bay, we could probably generate a half a billion dollar net present value here. However, up there unless you have a port to haul the concentrate out, it is not worth anything.


CEOCFO: What made you decide to pick up the Nunavut property out of your normal zone?

Mr. Rogers: The Blue Caribou project in Nunavut the original asset of Skybridge Development that was facilitated through the Wolfden and Ewan Downie connections, who had done a lot of work up there. Skybridge Development Corp. was a precursor to Mega Precious Metals.


CEOCFO: Is Mega Precious Metals looking at additional properties?

Mr. Rogers: We are always open to opportunity. We did pick up the Satterly Lake Project, which is a grassroots stage project. It is right beside the Gold Canyon discovery in Birch Lake, so we have done geophysics and we are prospecting. We hope to be drilling there probably next year on some good targets. In addition, one of the things I really want to do is consolidate Red Lake. Once we can get the Madsen resources out, we can bring in a few more players to the table and see what we can do to consolidate everything that Goldcorp. does not have and maybe even the new pieces that they do have in terms of creating bigger and better opportunities for all of us.


CEOCFO: What is the financial picture like for Mega Precious Metals today?

Mr. Rogers: At the end of June, we had approximately $7 million, so we will be needing money later in the year.


CEOCFO: What is your two-minute take on the economy and gold?

Mr. Rogers: I do not claim to be an expert. To me gold has historic value and it is not so much that gold is going up, it is that our dollars are going down. Everybody is printing so much money that it is going to be worth nothing if they keep printing so much of it. You hear about Greece and a few of these things where they have basically been printing money and giving all of their people more and more things by printing money, so basically it is catching up with everybody. You just cannot print money and do stuff with it; it is not going to be worth anything. Precious metals are really the only historic value that we have other than hard assets, which you see a lot of. China has jumped into a lot of hard assets and companies have awesome opportunities to pick up hard assets at discounts right now.


CEOCFO: Will Mega Precious Metals be going it alone or bring on partners?

Mr. Rogers: We are intending to move forward ourselves. However, having said that, we have been in contact with a number of mid-tiers and have generated some interest from them. Certainly, if we can find a good partner we would potentially look that way, but it is all about the economics and how we can make it work for everybody.


CEOCFO: What challenges do you need to look out for?

Mr. Rogers: I do not worry too much. I have good people to look out for things for me, so I delegate some of the worry. I believe that building positive synergistic relationships with First Nations and the Provincial Governments of Ontario and Manitoba, will progress and develop. We are in the beginning stages of some major changes in terms of how things are done. It will be good for everybody in the long run, but it will have a few tough moments as we move through it.


CEOCFO: Why should Mega Precious Metals stand out to potential investors?

Mr. Rogers: Mega Precious Metals stands out because we have been aggressive, we have a great team and we have location infrastructure in the areas where we are working. We are setting goals and meeting and exceeding our goals. In this economic climate, we have ounces; we are growing ounces and looking towards production. We are targeting production by the end of 2014, so we are a company that is actually moving forward with real assets and have a stream of assets that could potentially grow into the fall. That is important for investors now; to actually buy something that is real and right now we are not just an exploration play, we are more than that now.


CEOCFO: Final thoughts, what should people remember most about Mega Precious Metals?

Mr. Rogers: We are excited. We are looking at potentially getting up over 3 million ounces by the end of the year. The open pit potential that we found in Monument Bay, the 43-101 we are going to put out probably in September on the North Madsen. In addition, Headway is within probably 25 to 100 meters on the first hole of the target, and we have been waiting for twenty-two months for that. So that is exciting, and the third hole is 300 meters away, but going well. There are so many things that can happen for us and I mentioned the catalyst of Xstrata, up in Nunavut beside us, which could make that asset worth quite a bit already. We have a lot of irons in the fire and any one of them could be a company maker, and we have two or three of them that could kick in. It has been a hard road getting to where we are, but it is getting to be a lot of fun.

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Our strategic business plan is to move forward a number of projects that we believe we will be able to get cash flow from, basically, creating value. We have a base in Red Lake where we have our North Madsen Project. We are hoping to get over a million ounces there and put the land package together and get more there. We have our Headway Project, which is targeting a high-grade zone in the hanging wall of the Red Lake Gold Mine. Monument Bay is our main asset. We are basically looking to take that to production or at least show that it has some good value and will put some net present value on the table. Basically, we are developing resources. We have gone from 30,000 ounces last year to now 1.8 million ounces and we are hoping that by the end of the year we will be over three million ounces. Therefore, we are growing value very aggressively and we believe that you have to be aggressive to be successful. - James A. Rogers

 

 

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