“The goal – $25 million a year in profit within 24 months.”
For a company valued at just $21 million today, this is a bold statement of intent. However, Prime Mining’s (TSX-V:PRYM & OTCMKTS:EPWMF) chief executive Andy Bowering speaks with the confidence of a man who could have found the project of a lifetime.
The Los Reyes gold mine in Sinaloa, Mexico.
Meaning “The Kings” in Spanish, Los Reyes presents one of the best near-term opportunities in the junior gold-mining space globally.
The numbers are extremely compelling.
The 65,000-hectare Los Reyes district already boasts resources of 530,000 ounces of gold and 10 million ounces of silver in deposits that are close to surface.
To date, 17.5 kilometers of gold mineralization strike has been identified through exploration drilling at the project, but so far only seven kilometers have been drilled to build its resource model.
Encouragingly, the Los Reyes gold resource model is based on an average gold recovery rate of 76% and an average grade of 0.5 grams per tonne (“g/t”). Better yet, the average grade of the 380,000 ounces in the indicated category is 1.73 g/t – nearly double the average of similar Mexican projects and around three times the average of comparable North American ones.
Not only does this mean the gold found at Los Reyes can be mined using low-cost, open-pit mining methods, but there is also plenty of potential to discover a great deal more of the precious metal.
Applying modern drilling techniques, and assuming that 20% of the geological structures are mineralized (a useful ballpark figure), this could mean that Los Reyes holds 1.5 million to 2 million ounces of readily-recoverable gold.
This is already convincing, but when you consider that Bowering and the expert team he has assembled at Prime (TSX-V:PRYM & OTCMKTS:EPWMF) believe that Los Reyes can be brought into full production within 18 months, with a capital requirement of just $20 million, the outlook for this company becomes exceptionally exciting.
Los Reyes has a capital payback period of just six months
Within six months of commencing operations, Los Reyes could have repaid IN FULL the principal spent on its development.
Every dollar made after that would flow back into the company. Given that the initial life of mine is anticipated to be seven years, Prime’s (TSX-V:PRYM & OTCMKTS:EPWMF) ability to repay $20 million in such a short period of time really emphasises how far advanced this opportunity is.
And that is just based on mining the current resource.
It is no wonder that Bowering is so self-assured that he will raise the money he needs. There just are not that many mining projects out there that can claim such favourable economics and promise to deliver such quick returns.
“Prime (TSX-V:PRYM & OTCMKTS:EPWMF) is going to build a mine. It is going to make it profitable. It is going to figure out how to pay back the shareholders quickly. I own 17% of the company and everyone senior involved swapped out their first year’s salary for stock in the last financing round at 30 cents. We are definitely all in this to win it.”
The REAL POWER behind Prime Mining (TSX-V:PRYM & OTCMKTS:EPWMF)
Prime’s (TSX-V:PRYM & OTCMKTS:EPWMF) leadership team has as impressive a collective track record as any other mining company of this size. They are also fully financially committed to the business, having invested a great deal directly into this start-up company.
Chief executive Andy Bowering has founded six public resources companies during his 30-year career, all of which continue to trade today. Bowering has built his fortune by focusing on quality over quantity.
Meticulous in his research, Bowering has only ever chosen to work on the best projects. He applies the highest standards to his selection. The fact that three of the six companies he founded (Caldera Environmental, Doublestar Resources, and Pinnacle Mines) were bought by much larger players reflects how successful his approach has been.
With this track record, it is no surprise that he has delivered such strong returns for his early shareholders. Every time Bowering has brought an opportunity to market, the original investors have made five to ten times their money.
Bowering puts this success down to his ability to find and personally fund a project before building an expert team to bring it into production.
His most recent winner was Millennial Lithium (TSX-V:ML), which he founded and funded in 2015. During his time as the company’s executive director, Bowering used his wide contact base to locate assets in Argentina, attract top personnel in the lithium space, and raise upwards of $100 million in funding. As it stands, the company has taken a five million tonne lithium copper resource through Definitive Feasibility Study (“DFS”) at its Pastos Grandes project in Argentina and a takeout is expected at upwards of $225 million.
“Shareholders do very well with me and early investors are going to do very well with Prime (TSX-V:PRYM & OTCMKTS:EPWMF). I find great assets, create great teams, provide funding, see the vision, then make it happen.”
All of this experience has culminated now in Los Reyes.
Bowering personally put the original money up to secure the property and has followed this up with over $3.5 million of his own cash to fund Prime’s (TSX-V:PRYM & OTCMKTS:EPWMF) early development. As he put it to us:
“I do not take a salary from the company, I work for my equity. That means everything because it means that there cannot be any question that my goal is to see all shareholders get paid, through us realizing the vast potential at Los Reyes. I manage this company like it is my own private business. We do not allow waste. We do not want cost overruns. We do not take high risks. Everything we have done is based on careful planning and execution.”
Another 30-year mining veteran, Kunz made his name in Canada’s mining sector as a professional engineer. Formerly chief executive of Ivanhoe Mines (TSE:IVN), Kunz founded and led US Geothermal, and served as a senior manager at Morrison Knudson and MK Gold Company- an $80 million IPO on the NASDAQ.
Across these roles, Kunz has been involved in the construction of numerous large-scale producing mines. Notably, this includes the American Girl project in California in the 1980s and 1990s. American Girl is an open-pit heap project centered on the exploration of numerous open pit areas, much like Los Reyes.
Importantly, Kunz is also a director at Chesapeake Gold (TSX-V:CKG). Chesapeake owns the 20 million-ounce Metates gold exploration project just 90 kilometers away from Los Reyes, affording him vital local contacts and knowledge to support Prime (TSX-V:PRYM & OTCMKTS:EPWMF) as it pushes forward.
Kunz tells us he was drawn to Prime (TSX-V:PRYM & OTCMKTS:EPWMF) because of the quality of its management team, Los Reyes’ potential, and the project’s similarity to several of those he previously built and brought into production.
Bowering is keen to point out that the significance of Kunz’s involvement “cannot be understated”. According to Bowering, Kunz went through an intense due diligence process prior to agreeing to his appointment:
“Daniel came up here, we met, we got along, then he conducted a deep look into this project over two months. He had his whole team go over the metallurgy, the deposits- everything. I had a feeling that he liked it then because he came back and asked me for all the company’s constitutional documents, including three years of board resolutions, the shareholder lists, everything. He went into every detail and ultimately told me, ‘I like it. I like you. I like what you’re planning on doing. I will come on as executive chair and I will help you build a mine’.
And that is exactly what we are doing now; building a gold mine that could repay $20 million within six months, remain hugely profitable for seven years and still has incredible land yet to explore.”
IMPORTANT NOTICE AND DISCLAIMER PAID ADVERTISEMENT.
This communication is a paid advertisement. ValueTheMarkets, Digitonic Ltd, and their owners, managers, employees, and assigns (collectively “the Publisher”) is often paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by Prime Mining Corp to conduct investor awareness advertising and marketing. Prime Mining Corp paid the Publisher the equivalent of one hundred and seventy-five thousand US dollars to produce and disseminate this and other similar articles and certain banner ads. This compensation should be viewed as a major conflict with our ability to be unbiased. Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our articles experience a large increase in volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price may likely occur. This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security. Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position. The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser. This communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results. This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher cannot guarantee the accuracy or completeness of the information.
FORWARD LOOKING STATEMENTS.
This publication contains forward- looking statements, including statements regarding expected continual growth of the featured companies and/or industry. The Publisher notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the companies’ actual results of operations. Factors that could cause actual results to differ include, but are not limited to, the success of the company’s operations, the size and growth of the market for the companies’ products and services, the companies’ ability to fund its capital requirements in the near term and long term, pricing pressures, etc.
INDEMNIFICATION/RELEASE OF LIABILITY.
By reading this communication, you acknowledge that you have read and understand this disclaimer, and further that to the greatest extent permitted under law, you release the Publisher, its affiliates, assigns and successors from any and all liability, damages, and injury from this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.
ValueTheMarkets.com is the Publisher’s trademark. All other trademarks used in this communication are the property of their respective trademark holders. The Publisher is not affiliated, connected, or associated with, and is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks.