In exploration, a promising gold target is one thing. Having a major gold producer invest before you’ve even drilled the first hole is quite another. Hello, I’m Ricki Lee, and this is The Capital Compass. Today we’re looking at Phenom Resources (USOTC:PHNMF) (TSXV:PHNM), a Nevada-focused explorer with exposure to both gold and vanadium — but right now, much of the attention is firmly on gold.
Its Dobbin Project is targeting a potential Carlin-type gold system in central Nevada, backed by a management and geological team with an extensive history of gold discoveries. And that potential has already attracted SSR Mining, which invested C$5.4 million into Phenom before drilling at Dobbin had even begun.
This article is disseminated in partnership with Phenom Resources. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Now, drilling is underway and Phenom has accelerated its acquisition of a 100 per cent interest in the property. Joining me to discuss what they’re looking for, what SSR’s involvement means, and where the company’s vanadium assets fit into the strategy is Phenom Resources President and CEO Paul Cowley. Paul, great to have you with us.
Ricki: Paul, it’s great to have you with us.
Paul: Great to be here, Ricki. Thanks very much for having me. And I have to tell you that I’m having a blast as a hands-on geologist and CEO. The feeling that I’m getting right now is the moons and the stars are aligning for Phenom Resources. You see, I’ve been involved with a number of gold deposit discoveries before, and that same feeling is really what I’m getting right now. We have a lot to offer with Phenom. We have quality and timing. We have a quality team and a quality team. And now being recognized by the third largest gold producer in America, SSR Mining, that’s amazing. And now with that money that we have right now, we’re unlocking the value of a high caliber Dobbin project.
This is really significant and real for us.
Ricki: Well, Paul, before we get into Dobbin, please give us a quick introduction into Phenom. You have both gold and vanadium assets, but you’ve also assembled a geological team with a pretty significant history of gold discovery. So how has that experience shaped the opportunities that you’re pursuing in Nevada?
Paul: Well, to say that it’s pretty significant is really an understatement, Ricki. I don’t know if people realize that most geologists go through their whole career without making a single gold deposit discovery. In Phenom, I’ve never seen a junior explorer that has, past and present for that matter, that has 10 gold deposit discoveries in their career. So that’s a rarity, and it’s very significant because it gives us very, very significant judgment and obviously roots to discovery. Dave Mathewson, who’s my geological partner, his successes have all been in the Carlin gold trend. It’s a world famous place where hundreds of millions of ounces have been mined. Dave was involved with many of those discoveries, and his experience has led us to both from a regional standpoint as well as a local standpoint, to pick up Dobbin.
And he said, “Yeah, we’ve got to get this one, guys. We’ve got to get this one.” And so we did, three years ago, and now we’re opening up the value of Dobbin.
Ricki: Okay. So, let’s turn to Dobbin then. You’ve identified a large gold-in-soil anomaly within what you believe has the ingredients of a Carlin type system. What makes the geology and location so compelling? And why has Dobbin become such an important focus for Phenom?
Paul: Well, to be honest, over three years, we’ve worked really, really hard and brought a raw prospect, never had a single drill hole in it to having a 1.3 mile long by 700-foot wide gold soil anomaly. What’s key is it’s in the type of rocks or the rock units that are known to actually have produced millions of ounces of gold. That’s pretty key. And this anomaly is not only large, as I’ve just described it, it’s also very, very strong. We have soil values up to 0.1 ounces per ton, that’s three grams. And rock samples up to 0.3 ounces per ton, that’s over 10 grams. We’ve got not only soil sampling, but we’ve also got hand trenching that has indicated that we’re into something very, very significant. And what I would point out to people is that Dave Mathewson, who’s obviously a guru in this sector.
In the last 50 years of his experience, he’s only seen an anomaly, a soil anomaly like this in one other place. And that was over the Carlin Gold mine, which we now know it’s mined out and produced two million ounces of gold. So, this is a very, very obvious target. We have many very well-respected geologists who see this, see the opportunity here. This is an exceptional exploration play in one of the best jurisdictions in the world. And those people, those geologists have actually participated in our private placements before because they see the value there.
Ricki: And Paul, SSR Mining made a $5.4 million strategic investment in Phenom before you had even drilled a single hole at Dobbin, taking an initial 9.9% stake.
Paul: Yeah, it’s crazy.
Ricki: There’s also a framework for SSR to fund the project further and potentially take a direct interest. For investors, how significant is that endorsement? And what do you think SSR saw in Dobbin and your team that gave them the confidence to invest at this stage?
Paul: As I mentioned that at the very beginning, SSR is the third largest gold producer in America, so they know what they’re doing. They actually have a mine in Nevada that they’re currently mining, and they’ve got three other operations around the world. SSR saw our anomaly and saw the setting, the geological setting, and they were so impressed with it that they not only made this $5.4 million Canadian investment, but they’re looking to double that investment this month in September. So it’s not only significant for the treasury that we now have, we have the money to do a very, very good campaign of drilling, but it also shows that unusual eagerness for a producer to come in at this stage of a project. It’s basically unheard of for that happen.
And of course, with them coming in, we’re going to gain ourselves, we’ve got a great exploration team, but we also will benefit from their expertise because they’re miners and they’re producers and they’re good explorers in Nevada. So, they see this big picture at Dobbin. We’re part of that picture. They see a regional play. They see this Carlin type opportunity, which is extremely valuable. Usually, they are multi-million ounce deposits. They’re big. And they’re a type of deposit that actually has put Nevada on the map. Those types of deposits have produced over 200 million ounces of gold, 200 million ounces of gold out of Nevada on those types of deposits. So these are really, really important deposits.
Ricki: And continuing with Dobbin, drilling is now underway. So, we’re moving from the geological thesis to actually testing it. What are you looking to establish with this first drill program, and how’s it progressing? And when should investors expect the first assays?
Paul: The drilling is going really well. We’re very excited at this point in time. Dave and my thesis is to make another gold deposit discovery in our careers. We’re living and dreaming that kind of task, and we think we’ve got something very good here. So, we’ve got four holes already into the Dobbin zone. We really like the features that we’re seeing. There’s going to be a lot of things that are revealed here in the coming months of this year. Early results will be coming out before the end of September. But we’ll be continuing to drill because this is obviously a big target, so it’s going to require lots of drilling. We’ll be drilling till the end of October, maybe early November, depends on the snow.
And then looking to come back and plan on coming back in May, June, next summer as well. So, lots of activities, lots of money being spent smartly by our group and with SSR’s guidance as well. Our vision is not only to make a like a discovery hole, but we see the opportunity here of actually with this drill program to actually start to quantify the system. Not necessarily to have a resource, but show that there is continuity in size, as we grow this through this fall and into next summer. So, we’re super excited about where we’re at. As I say, the moons and stars are seeming to align for us and it’s a great feeling.
Ricki: And finally, Paul, with gold now taking center stage, you still own what the company describes as North America’s largest, highest grade primary vanadium resource. You’ve previously discussed separating the assets into standalone companies. So, what’s the plan for the vanadium business and how could a spin-out ultimately unlock value for Phenom shareholders?
Paul: Sure. So, the most important message I want to get to people is we are laser focused on our gold project, particularly Dobbin. Anything beyond that is going to be a distraction. However, there is extra value in our critical metals vanadium portfolio. It’s been set aside for a while. We think now that there’s a number of things that are actually developing that are showing more and more value for that. It’s sort of an organic growth and in particular, what’s prompting this time to take this, to separate the two out is the vanadium portfolio. There are three components to that portfolio. Each of them have to collectively be strong enough that it’s a standalone business. We think that it is now, and the timing is right, and what’s prompting it is we have a 5% carried interest in a very unique battery, a solid state vanadium battery with a Japanese group.
They are actually now going to manufacturing and commercializing this fall. And from that, they’ve got enormous orders from Europe and the Middle East going forward. So, in a passive way, this is going to add more and more value to us because a 5% carried interest. So that is something that we would look to spin out into a separate company, dividend the shareholders of Phenom that company, so that they’re going to benefit as an additional benefit over our gold project. And we’re looking to start that process this fall.
Ricki: Well, Paul, thank you for joining us today and giving us a closer look at what’s happening at Dobbin and the wider Phenom Resources story.
Paul: My pleasure.
For more information, you can visit phenomresources.com. I’m Ricki Lee, and this has been the Capital Compass. Thank you for watching, and I’ll see you again next time.
Sponsored Article: InvestorsHub.com Inc. dba The Market Link has been compensated CASH: $1,100 by Phenom Resources (OTC:PHNMF) for the publication and distribution of this content. This is not independent editorial content. For full compensation disclosure visit investorshub.advfn.com/boards/disclaimer.aspx