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Southern Cross Gold

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September 16, 2024 at 8:50 AM (MDT)|Broadmoor Hotel & Resort

Michael Hudson

Managing Director

Michael Hudson is the Managing Director of Southern Cross Gold, a natural resources company engaged in the exploration of precious and critical metals in the Melbourne Zone of central Victoria.

He is an explorationist, geologist and entrepreneur. He graduated from the University of Melbourne in 1990 with a B.Sc. (Hons 1st) in Geology and immediately started working underground at Broken Hill and then as an exploration geologist around the world with Pasminco for 10 years.

Moving to the junior markets +20 years ago, he has developed and raised more than US$200m for mineral exploration properties on four continents and co-founded seven junior exploration companies. Over the last 15 years he has focussed on precious and critical metals and has been involved with numerous discoveries of various commodities, many which are now mines or advanced assets.

He currently sits on the board of junior explorers and developers across four stock exchanges (TSX, TSXV, CSE and ASX) and is passionate about the science of mineral discovery and the teamwork, rigour and persistence required.

He is a Fellow of the Australasian Institute of Mining and Metallurgy and Member of both the Society for Economic Geologists and Australian Institute of Geoscientists.

This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

Most exciting discoveries, not only in Victoria or Australia, but globally. And I hope to be able to demonstrate that over the next short while just working through the disclaimers here. Now, in summary, how do you define, how can I justify? This is one of the best discoveries? And it, this is, this is a discovery that's literally been made over the last year, year and a half. We've been drilling there for an about 2.5 years, but it's really hit its power band over the last year. And, and, and that measure of discovery success can be looked at at how many very good intersections, let's say 100 g meter intersections divided by the amount of drilling, we've got 58 kilometers of drilling that we've put into this over the last year, we got 45 plus 100 g meter intersections that's and divided by the amount of drilling that's an extremely high hit rate. In fact, I can't see anything better globally at the moment. But please come up to me later, if you have a database that suggests otherwise, if it's not the best, it's one of. So this has got a hell of a lot of gold that we're drilling and drilling very successfully. It's a very high grade pro project. We're focusing on the grade, the volume, we're only 3% of the way into the discovery. So this has got a long way to go. And,, and, and by, by inference it's, it's over a long scale. It's a, it's a 12 plus kilometer long system. We got five rigs at site at the moment. They're going to drill with another rig coming at the end of next month, 60 kilometers drilling over the next year. So you can see that momentum is increasing. We're gonna more than double the meters in this. Over the next year, we've cashed up, we own the freehold land over the project. We did that after the s the 12th hole, we knew we were on to something and as a consequence, we wanted to secure our future access to that site without any issues and which we have done this is fairly self evident. Our market caps around 550 Australian institutionally, this has become a lot more institutionalized over the last year as this discovery has developed, I'll talk to this piece this 48% in a moment. This is a, a Canadian company called Mawson Gold. We spun the assets out of Mawson about two years ago just a little bit over two years ago. And, and we had a discovery up in Finland that we were working on at the time. And we, we decided to spend these assets, these Australian assets from the Canadian market onto the Australian market that we did. And those shares were escrowed for two years until earlier, this year, May this year. And as, as luck would have it, the daughter exceeded the, the, the mother if you like in terms of share, share market appreciation, we were going to distribute the stock of Mawson to shareholders that stock that are held in Southern Cross. But that led to it some tax issues. So we're merging these companies. It's a tax effective tax neutral transaction and that will be done in November by mid November. So it will be the first time that this asset has not had a major shareholder at 48% and the ownership will be combined in one company and distributed and it will be dual listed in both the A on the both the A SX as CD is and the, the primary listing will be in Canada, that will make it a much more institutional story that that split ownership was never intended to be for long. And once that escrow finished, we, we are, we're going about fixing it up. So we see that as a rating opportunity, let's get into some of the numbers. Here's just the, the top 10 intersections into this project. You can see they've all come within the last year and even many in the last six months, this this is a goal project. But like Costa Field, it's the same geology. We do have an antimony component on a in situ recoverable basis that antimony is 20% of our, our product mix. And it, this will be a very significant antimony contributor to the western world. There's very few projects globally. And this will be one of the larger Antimony projects, but it is a gold project, but it does have that Antimony component for those mathematical bonks out there. If you take our assay database of about 40,000 assays and and put and make a cumulative average over time. So there's only a mathematical exercise, it's not a resource exercise. But this is just gives you some idea how the project's developing. So over time since May 2022 when we listed the company, the average width has stayed pretty consistent 4 to 5 m, but the average grade has just continued to increase. Now, that's averaging over th tho those numbers over 20 g per ton. Why is that? Because it's getting better and we're getting better at targeting it. So this is a very high grade project and it's getting better. This is how to understand Victoria, a lot of people conflate especially Australians, not so much. This part of the world because this part of the world has benefited from the foster rebirth if you like back from 2016 onwards. But most people conflate Victoria with this earlier style. It's a very different style, a different geology, different orogenic event form 70 million years earlier than the blue circle. So the red is a very high nuggety, very hard to put modern mines together, hard to reconcile at every stage along the process. As Fraser just shown you Costa field is a mine. It's and a and a and a very good mine at that foals an an amazing mine. They're both reconcilable deposits. They're not like the traditional the usual suspect assumption that people make about Victoria. But this blue circle is less than 10 years old in terms of our understanding forms some of the highest grade gold mines on Earth. Foster is still the second highest grade gold mine on earth. It was the highest grade gold mine on earth for the, for four of the last seven years. And we've got the next one. We've got the next one and, and we've had the benefit of understanding especially from Foster, why that they, they transition and, and the, the secret is just this is where geology really matters. I'm a little bit biased. I'm a geologist. Of course, when you get into these systems, you go deep and you go deep early. So that, that is why we're drilling down to a kilometer and, and drilled early stage holes into the project deep because the s the system transitions into this brittle ductile zone. And, and that's where you get these free gold horizons or structures. And that's what makes these, these deposits extremely special. They're good at the top and they get world class as you go deeper. Let's let's just look at where the projects our projects are located. Here's Melbourne, the beautiful city of Melbourne where I live. We're 60 kilometers north of Melbourne. This is Costa Field here. We're 60 kilometers from Costa Field and 100 from Foster. The green are the traditional old Miso zonal Bendigo and Ballarat style deposits and the orange are the epi zonal that later event. So you can see it's not only different in time, 70 million years, but they form from, from Foster East basically. So when you get in, you want to look for the orange when you get in the orange go deep early if we just zoom into the project itself. Now this is 20,000 hectares of mineral tenure. You can see the scale here. This system is big. The green line is the, the well that I'm writing over on yellow now is that the trend that's over 12 kilometers. We put 56 kilometers into that circle there. The the long strike extensions which are, which are essentially that 10 kilometers. We put about 2.5 1000 m here. We have hit gold. If you can see the, the little zone there, we've hit up to half a meter, half an ounce, 3 to 8 kilometers long strike from the system. But very little work has really been done up up until a year or so ago. There was not one drill hole in that extension going 10 kilometers and it, it goes for another kilometer this way too. We're coming in here and doing a big IP survey IP is a bit of a secret to this system In the next few weeks. That's a half a million dollar IP survey. There are parallel zones also that rather than the main trend alone. But let's just focus in on that key area that yellow circle. And I'll tell you how the the magic works essentially geologically. So this is looking down in plan view, we will go underground in just a moment. The scale here is at 200 m now. So that's a 200 m grid. The mineralization forms in what we like to say, a ladder. As we're looking down there is a host structure that hosts all the gold and that structure continues for the, you know, the 12 kilometers that we talk that way and there's parallel zones. It's 1 to 200 m wide. It's a dyke with altered sediments on either side and that's given the system, the ground prep it needs to form this gold, then that's just been extended during trans expression. And it's formed these vein sets and they are the rungs of the ladder. If you like. So the rungs that stand surface and go all the way down there, there, the rungs become vain sheets. If you like. There's 50 of those we found so far there. We're finding many, many more as we extend exploration, especially at the moment into this half of the, the project that that's about 1.2 kilometers you're looking. So we're extending it seven or 800 m to the west, right at the moment, the vein sets depending where you are 3.5 m wide here or 2.5 m. That's a median volume, weighted average thickness, but they can get up to 10 m thick. Their strike extent is relatively limited. They're 20 to 100 m because they're only within that host rock, but they're very continuous in the up and down sense. They start at surface and go down to at least a kilometer and we can actually trace any one of those 50 vane sets over 600 m in the up and down sense. So they're very consistent. Let's let's now go underground. And here you can see that dike, we're not show showing the altered sediment ar around it there's the green is the dike. You can see we're only showing you the plus 10 g hits up to greater than 500 g hits and they're very constrained around the dike. If I spin that a bit slower, what else can we see here? This was a mine, excuse me for 50 years. So they mined down to 100 and 80 m here. just near surface about 40 m here. There's another 90 m mine, historic mine here and here and, and, and interestingly, this, this project was mined from the 18 seventies right through past World War One because again, the antimony that seems to be the flavor of the month. It's the most, most important metal we used to say that you, you've never heard of it is now being heard of this mine was kept open by the Imperial Munitions Act along with Costa Field Fraser and they were treated together. So it's not the, it's not the UK we're talking to today. It's the US. So just the jurisdictions changed. But the very same reasons defense critical product has kept this mine open when all the other gold mine around are shut. Let's the, the vein sets here are the gray. So let's just make a just take off the geology. You can start to see perhaps some of the hits here. I won't read them out, but this is the deepest hole on the property 3.6 m at 100 and 25 g and some of the very highest grades that you'll see coming globally, I'll just circle all the plus 500 g hits. just broadly, you can see that they start to form at that depth about four or 500 m. So that's why it's getting better at depth. Even just visually, you can start to see that. Let's let's take wh what we've got and where we're going with this project. So here's about 1.2 kilometers down to one kilometer. You can see where we've drilled very deeply. The In, back in January, we made an expiration target that was constrained that was dealt with as a resource, but didn't certainly have the drill density to put it all in a resource. So we extended zones down to depth where we'd hit surrounding mineralization, for example. And in and out of the page, There was some assumptions but I 40 kilometers was wire frame top cut and dealt with like a resource in that blue area. Back in January, we said we had between 1.1 to 1.6 million ounces at 7.2 to 9.7 g per ton gold equivalent with that 20% coming from the Antimony component. Since then, we've put a lot more meters into it. We're drilling. We've I, I've mentioned this hole which was 100 m step out. 3.6 m. 100 and 24. Here, last week, we put this hole out was 200 m of mineralization with H eight high grade structures beneath the most prolific mine on the field, which we this was a, a new discovery that we're now seeing another one of these bodies develop the yellow holes, as I said, are, are in the lab. So there's always news flow coming with five rigs there. So you can see we're starting to drill around this old mine here. So keep an eye on certainly that western part which is a 500 m extension. Further west, we found more gold here in the east. We've stepped out 500 m down here, 400 m down here. So you can start to see this is developing much bigger than the the blue area. And if we put a box around there, that's where we're drilling at the moment. And that's where we see our extent. Our expansions coming from the target within the next 12 months with 60 m of dr 60 kilometers of drilling is, is a 3 million ounce target at 10 g per ton. We are running an internal resource and updating it monthly using the same team that overviews both foster and Costa field and getting that knowledge base onto this project. So we are running internal resource, but our aim is to get to that 3 million ounces. Demonstrate this is a very unique asset before we start putting a pin in it, putting a resource on it at the moment, we've got that two rigs drilling here, we've got two in here, one here and then when that third rig comes, it will be drilling along the strike extensions. Remember, this is only 1/10 of this whole trend. So this is only a very small part o of the total trend. W we'll, we'll also see it develop a depth. If we can take Foster and Costa field as analogies, they do go down to close to two kilometers from surface. So this is only 11 half of that depth potential that we see. So it's got a long way to go and once we get to that 3 million ounces, if we can do that, that's our stated aim, then we'll start wrapping a resource and, and going down the permitting path. Let's let's, let's just talk about the antimony. We've, we've, we, we've only got one slide too. even though I've mentioned it maybe a bit more than you've fraser. But it's it's is defense critical, but it does is, its main use is in, in fire retardants and 17% globally now goes into solar cells as the fire retardant business is starting to substitute with the higher price. But fortuitously, it's been taken up in the solar industry but it is defense critical and, and we in Australia now can compete with with us companies under title three of the DP A under the AUS legislation. Excuse me, it's this conference circuit is fairly brutal, metallurgical. We, we actually were treated at Costa Field. So we've, we just actually mimic the flow sheet and, and like Costa Field, we have free gold plus 80%. We get a gravity con and that then we get a, a AAA concentrate, a floatation concentrate, which is an antimony gold. We're doing a lot of work. More work. Of course, we want to maximize all the gold we can into the gravity and and then we would need to keep the arsenic down. Thank you very much Nick arsenic down in the con which we can either via blending and or two stage floatation in producing an a py gold con by dropping the ph down. And then that's leach also because we've got plus 80% at least free gold. That is leach. Your heads probably go to, oh my God. It's only 60 kilometers from a capital city. It must be near suburbia, but this is the, this is the location of the project. It is a little unique. It's around farms that have been there in three or four generations. This is the 56 kilometers of drilling have gone into that circle there to the north of the project. We've got a dozen houses within two kilometers, but going south, we literally have noone for 10 kilometers. And this is a freehold land that,, that, you'll see a little bit more news about soon. We own this freehold land. So this is the real development opportunity for the project that it has literally noone within five to six kilometers, at least into that farming land. You can go east and there's nobody either but that's going to bushland and you don't want to deal with native vegetation. So, developing into that farmland is important. So we have buffered it and and we bought six properties so far. And that's a key aspect of this project being 60 kilometers from Melbourne. It will attract amazing people who can live, live in Melbourne if they choose to send their kids to private school and go down the road to the eventual mine. And even waste in the mining industry is only waste because it's in places that that we need to store it cos it's a low value material. We're only 10 kilometers from a railway siding at a quarry that's five kilometers long. We're in discussion with those quarrying companies as I know our peers are, the waste rock is not waste rock, it will become part of their recyclable mix. All quarry companies especially from Europe wholesale and Borrel etcetera need to go to 30% renewable mix in the future. So that this is actually AAA very big part of this project and we'll minimize the footprint print. We are going down the path of early stage permitting. We're doing a lot of the, the hydro, the vegetation, the soil, the, the air quality, the social impacts. We've got a community reference group working very closely with the Tarang, which is the native title holder. We're going down a, a voluntary agreement with them, which is a, a bit of a first for Victoria preve. So they'll be standing beside a side when we develop this. Victoria has a few green shoots in terms of its permitting. There's great things happening at Foster and Costa Field around that, that you can talk to those companies about even over the last few months, we've had the government talk to funds around the opportunity in Victoria that is open for business. Their mandate is to to permit at least one mine per year. And and, and at least our project ticks all the boxes to receive that support. Any, any company will tell you they've got the best people and I can tell you. Absolutely, we do too. And we've, we've been standing on the shoulders of giants and bringing some of that expertise from our surrounding surrounding peers. And we, we have this mandate to drill and drill this out to that target that I was talking to you about that 3 million ounces at 10 g. That's the key point. But we are doing a lot of that social work, political work, environmental work, native to liaison with, with ferocity behind the scenes. So please keep an eye on this stock if you haven't already. This is one of the higher grade, higher hit rate discoveries that's growing to become a significant project globally. Only 3% tested so far, we're doubling the meters in it. We've got some of the most amazing support base from a shareholder point of view and and we're on a real roll. So thank you very much. Yeah. That's, that's right on time for you. So thank you. I didn't want any of your questions, Alex. So I thought I'd just thank you. I think you.


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