Exclusive Interview With Auryn Resources' COO Michael Henrichsen
Auryn Resources Inc. (TSX-V:AUG) (OTC: GGTCF) is an exciting junior gold company with assets in Nunavut Territory, Canada. Coming off the success of Cayden Resources, (sold to Agnico Eagle), the Company and key personnel from Keegan Resources, Cayden Resources and Newmont Mining are working well together to make Auryn a third winning investment for Executive Chairman, Ivan Bebek] and Shawn, [President & CEO, Shawn Wallace]. The team reviewed roughly 200 (gold only) exploration and development opportunities, settling on Nunavut's Committee Bay Gold Project. Recently the Company gained 100% ownership through the acquisition of North Country Gold. Control of an entire gold mineralized, district was one of the foremost criteria in choosing project #3. My prior interview of CEO Shawn Wallace can be found here.
The following interview with COO Michael Henrichsen was conducted by phone and email over the week ended October 23rd. The views, opinions and facts provided by Mr. Henrichsen are assumed to be accurate by the interviewer, Peter Epstein, CFA, MBA. However, the interviewer can not assure readers that the information contained within the interview is accurate. The views, opinions and facts put forth by COO Henrichsen are entirely that of Henrichsen and the management team of Auryn Resources. A very recent and highly detailed report on Auryn Resources can be found in the Company's filed Management Discussion & Analysis.
Peter Epstein: Please give a brief overview of Auryn Resources.
Michael Henrichsen: Auryn Resources Inc. (TSX-V:AUG) (OTCQX: GGTCF) is a well-financed, success driven, gold exploration company boasting highly experienced management, Board and Technical teams with proven track records. Auryn is advancing the Committee Bay Gold Project, "CBGP," located in Nunavut Territory, Canada. Auryn Resources is the third company that Chairman Ivan Bebek and CEO Shawn Wallace have started. Our team founded Keegan Resources and later Cayden Resources. Keegan became Asanko Gold and merged with its neighbor, PMI Gold. Cayden Resources was acquired by Agnico Eagles Mines (AEM) for C$ 205 million. I mention these prior achievements because I think that success begets success and it bodes well for our future at Auryn. That's why I'm here. A much more detailed description of Auryn is provided in the Company's Corporate Presentation.
PE: Please describe Auryn Resources' Committee Bay Gold Project?
MH: As mentioned, Auryn Resources' flagship property, the Committee Bay Gold Project, "CBGP," is located in Nunavut, Canada. High-grade gold occurrences are found throughout the property's 300 km strike length. Mineralization occurring within the CBGB is considered by some to be equivalent to that of other significant gold bearing greenstone-hosting deposits like Agnico Eagles Meadowbank & Meliadine mines located ~180 km to the northeast. The CBGP includes 217,600 hectares (537,701 acres) situated along the, Committee Bay Greenstone Belt, "CBGB." A much more detailed description of the CBGP is contained on the Company's website. [Please click here]
PE: Can you give an overview of the Three Bluffs deposit?
MH: In September 2015, Auryn Resources acquired a 100% interest in the CBGP through our acquisition of North Country Gold Corp. The GBGP district is centered on the Three Bluffs high-grade gold resource that contains a NI 43-101 Indicated resource of 501,000 oz @ 8.42 g/t Au and an Inferred resource of 772,000 oz @ 7.16 g/t Au, for a total of ~ 1.3 million NI 43-101 compliant ounces of gold, "Au." The deposit remains open for expansion both along strike and at depth, and is considered to have excellent exploration upside to significantly increase the resource base.
PE: Given your extensive experience & credentials, what enticed you to leave Newmont to join Auryn Resources?
MH: Newmont enabled me to travel as its global structural geologist. My highly skilled technical team was able to significantly increase reserves and resources in Ghana, where Newmont was active. I also worked extensively at major gold camps in South America, the Carlin Trend, Nevada and in Canada. Like most gold Majors, Newmont had its share of bureaucracy. I wanted to close deals, make things happen, to execute, to get things done. I met Ivan, [Ivan Bebek, Executive Chairman] and Shawn, [Shawn Wallace, President & CEO] while working for Newmont.
I really liked their approach. Nimble, no bureaucracy or hierarchy, proven results, successful and focused on building companies. My technical team, several of whom worked with me at Newmont, now has the autonomy to follow up on prospects, develop targets and actually drill without undue delay. Since my joining, Ivan and Shawn have continued to demonstrate the ability to raise capital, enabling us to drill with minimal constraints. Auryn has a loyal and committed shareholder base from among investors that were involved in Keegan and Cayden.
PE: Might Auryn be interested in tuck-in acquisitions, assets located elsewhere? How about silver or copper?
MH:That's a good question. It's times like these, when we feel that the gold price might have bottomed, that one finds attractive valuations to pounce on. Since we recently looked at close to 200 opportunities, we have a good sense of what is attractive and available in multiple jurisdictions. Having said that, we are focused on the Americas at this time. We have a select group of prospects or targets that have passed initial investment hurdles, but I'm not at liberty to say more than that. Regarding Auryn's possible interest in non-gold assets, we want to stick with our expertise, gold. I believe that our shareholders are on board with that approach.
PE: What are the key points of your October, 14th press release? Are there takeaways from the results that will inform next year's drilling?
MH: We were pleased to find that The RAB (Rotary Air Blast) drill results compared favorably to the diamond drill results with no significant variations in grade or length of intercept. Being able to determine the geometry of the high-grade mineralization at West Plains was a key finding. For example, Drill hole # 15WPPR001 was an infill hole, confirming previously reported historical diamond drill results of 8.73 meters of 14.76g/t Au and 8 meters of 13.14g/t Au.
Drill hole # 15WPPR027 was a 50 meter step out to the southwest of known high-grade zones to establish the orientation of high-grade mineralization at the West Plains target. The resultant intercept demonstrated that the high-grade zone is open at depth. This makes us confident in our ability to follow it. Each drill campaign gives our technical team additional information to utilize in subsequent campaigns. Today's results are no different, they will be studied and incorporated into our database.
PE: Given that your team evaluated nearly two hundred prospects, what attributes compelled you to stop the search in Nunavut of all places?
MH: The simple answer is, it had to be high-grade, especially for a Nunavut play, it had to have district scale potential, meaning not just 1 or 2 discoveries but the potential for more, and it had to be in a safe jurisdiction. As I sometimes call it, a Major's project run by a junior, with the ability to be nimble, make acquisitions, advance exploration or development work both prudently and rapidly. For example, we control the entire greenstone belt, 300 km, the overwhelming majority of which has never been explored.
PE: How much due diligence was done before acquiring a stake in the assets?
MH: We did a tremendous amount of due diligence. We benefited from due diligence questions from other interested parties. We engaged industry consultants, including frozen tundra mining experts. We evaluated the exploration work and capital deployed by prior owners (and found it to be quite substantial in terms of both infrastructure and exploration). We scoured the database and visited the property several times. We interviewed geologists and technical personnel involved with CBGP. We spoke with various people with knowledge of the asset's history. There were few red flags. No asset is perfect, so we did not resolve every red flag, but we became sufficiently comfortable to get involved. Having looked at so many other properties, we were, of course, quite familiar with Canada and Nunavut.
PE: What do you, as COO, think that your technical team is doing especially well?
MH: Well, first, I think that we helped enormously in picking a potential world-class property. Second, we are very happy with our drilling methodology, enabling us to spend just a third or half that of peers. We've been using RAB drilling for shallow holes, making our drilling campaigns highly cost effective, in some cases drilling more than a single hole a day. We believe this approach has changed the paradigm of costs associated with Arctic exploration. It will allow Auryn to effectively test targets from across the belt as we move to potential new deposit footprint discoveries.
The fact that we were able to define the orientation of high-grade mineralization using RAB rigs demonstrates that exploring the top 100 m allows us to define deposit footprints through various thicknesses of till cover. RAB drilling would have successfully discovered the Three Bluffs deposit footprint at a fraction of the cost of diamond drilling. Therefore, our exploration team is better able to make timely decisions and increase operational efficiencies. Third, I think that we're doing very good quality till sampling, using a somewhat innovative and effective approach.
PE: I imagine you get asked this all the time, how does Auryn Resources compare to Cayden? Can a comparison even be made?
MH: Yes and no, comparisons can be made but they will be biased and subjective. I like to believe that Auryn will be a monster with multiple economic, high-grade discoveries. There's no doubt that Cayden was good, look at how it has fared since we sold it. Auryn has a bigger property, 300 km long, so it has the potential to be larger scale. I would say at this time that Auryn compares favorably to Cayden. For example, we bought CBGP with a NI 43-101 compliant Indicated & Inferred resource, whereas Cayden's flagship property did not have that. Ivan and Shawn considered Cayden more of an exploration-stage company, but we refer to Auryn as an advanced exploration stage company, if that helps. A recent, detailed audio interview of CEO Shawn Wallace by Jay Taylor can be found here.
PE: Every gold explorer claims to have a top-tier technical team. Why do you believe that your team is superior to others?
MH: Well, without hesitation I also say that we have a top-tier technical team, perhaps the best of any gold junior in North America. I highly encourage readers to visit page nine of our corporate presentation. To be clear, I'm referring only to our technical team in this case. Other juniors point to their management team and Board, probably lacking on the technical front. Notice how many on our team have prior experience with Newmont, Cayden or Keegan? Both investors and key employees follow the winners. With all due respect to Ivan and Shawn, a company's technical team is of paramount importance.
NOTE: Interviewer adds – Antonio Arribas, PhD; MSc: Director Former Chief Geologist Newmont, Former VP Geological Sciences BHP Billiton; Dan McCoy, PhD: Director Former Chief Geologist of Cayden Resources and Keegan Resources; David Smithson, Framework Study Lead – Chief Geologist Auryn Former Global Mapper/Geologist Newmont; Technical lead Cayden Resources; Peter Kleespies: VP Exploration – North Country Gold +10 years experience at Committee Bay – keeper of the geological knowledge; Kim Cook: Geophysicist Former global geophysicist Newmont & Anglo: regarded as world's leading magnetics interpreter; Mike McMillan: Research Inversions Geophysicist (CGI – UBC) Former global geophysicist Newmont: regarded as world's leading EM and IP inversions; Nigel Radford: Geochemist Former Chief Geochemist Newmont: +40 years of global experience; Ralph Stea, Quaternary Geologist Former Surficial Geologist & Geochemist with Nova Scotia Department of Natural Resources
PE: From your point of view, what are some key milestones readers can look out for?
MH: In our next important news release, we will update shareholders about our 1,400 till samples. As mentioned, my technical team has been using an innovative technique that we are excited about. We hope that obtaining more information from till samples will lend support to some of our ideas about structure. At the very least, it will help us plan next year's exploration. We are already working on drill targets for 2016. We remain optimistic that we're taking prudent, educated steps to advance CGBP in the most efficient (cost effective) manner, without skimping on our best targets.
PE: Thank you Mike for your time and thoughtful answers.
Disclosure: Auryn Resources has a small market cap. Small market cap stocks are highly speculative, not suitable for all investors. I, Peter Epstein, own shares of Auryn Gold purchased in the open market. Mr. Epstein, CFA, MBA is not a licensed financial advisor. Readers should take that fact into careful consideration before buying or selling any stocks. Readers are encouraged to consult with their own investment advisors before buying or selling any stock, especially speculative ones like Auryn Gold. At the time that this article was posted, Auryn Resources was a sponsor of: http://EpsteinResearch.com. Please consider visiting: http://EpsteinResearch.com for free updates on Auryn and others across a range of sectors. While at http://EpsteinResearch.com, please enter an email for instant delivery of my work. Thank you for supporting my articles & interviews.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.