The Mining CEO Behind Two Major Exits Starts Again - George Ogilvie

0:05Trevor Hall: Happy Friday. Good morning, everybody. Welcome to this long form episode here on Mining Stock Daily to get you into your last day of trading on a Friday and into a weekend. We've got a great in-depth conversation here with one and only George Ogilvie, the new CEO of Hercules Metals, coming off of that win from Arizona Sonoran and then also prior success at Battle North. I actually go in depth about the philosophy of taking distressed companies and rebuilding them, creating shareholder value, and what that foundational playbook looks like that George and his team are looking to replicate up in Idaho.

0:44Trevor Hall: And maybe it's a little bit different of a beast this time. So more on that great conversation, first time George and I, and all the conversations we've had, it would take over the full hour talking about his career and that playbook. So anybody interested in junior resource speculation, this is a must listen. Thank you so much to Integra Resources, Equinox Gold, Visa Silver, and Revival Gold for their support of Mining Stock Daily. Also, big thank you for Tara Hutton, who also makes this program, being able for us to bring it to you every week. They are actually going to be in Colorado for the conferences in the next week or two.

1:27Trevor Hall: So if you are interested to learn more about Tara Hutton, how they make the invisible investable, let me know. I'll get you in touch with the team and maybe you can set up a meeting with those gentlemen. Great platform there. And we thank them for their continued support of MSD. All right, everybody. Great conversation with one and only George Ogilvie. Have yourself a great weekend. Be well. It's a real pleasure to welcome George Ogilvie back onto the podcast. Typically when we've done these types of interviews in the last couple of years, it's been more on the corporate update side from Arizona Sonoran Copper.

2:04Trevor Hall: Obviously that cactus project is gone and sold to HUD Bay. George and team have recently announced going into a new project, the Hercules metals project up in Idaho. More on that in a bit. So instead of really diving into more of the corporate update side, we're going to talk a little bit of George's success, mistakes made in the past, and really how he just cannot quit the CEO position within the mind development. So, George, it's really good. It's really good to see you, man. What a year. What a year. Congratulations. Oh, thank you, Trevor. Yeah, it's been a phenomenal year so far, and let's hope that it continues to get better.

2:50Trevor Hall: Yeah, well, we've missed you dearly. Me, personally, missed the conversations, you know, the banter back and forth. Who is going to have the best sport coat at any conference that you and I attended? Well, the precious metals is coming up in Beaver Peaks, though. The competition is on. It is. And maybe we'll just wear the exact same jacket as we once did once in a while. Like last year, two years ago. It's such a good time. You and I looked at each other, pointed fingers like, hey, hey. Great minds. All right. I do want to spend as much of the hour as I can, George, because we'll get to the Hercules story and the transition.

3:32Trevor Hall: Sure. But honestly, I mean, you've spent more than three decades in mining. You started as an engineer and operator. You weren't necessarily a capital markets guy. That comes later. But when you look back at those early years underground in South Africa and then working for Canadian mines, what did that experience teach you about the mining sector that you simply cannot learn in an executive office in Toronto? Yeah, well, look, it was a phenomenal experience and really gave me a solid grounding in the mining industry. You know, once you actually work underground and see what can actually be done as far as, you know, moving the raucous concern, development rates, what people are physically capable of actually doing underground.

4:25And, you know, it really gives you a solid foundation to actually work from. As I always say, you know, spreadsheets can really be made to give you any result that ultimately you're looking for. But at the end of the day, it's really the rock underground and the people that will deliver the results, not a spreadsheet. So that's really allowed me to be successful in my career is having that solid grounding and in practical mining and various types of mines around the world. Yeah.

5:00Trevor Hall: When it comes to, you know, exploration and discovery, you know, there's always that back and forth discussion about who makes the better executive, the geologist, you know, or the engineer or maybe even the banker, you know, the finance guy. And you've been, you've worked in so many different parts of that mine cycle and the projects in your past, you know, do you have any sort of, you know, thoughts on that debate? Yeah, absolutely. Look, I think it's horses for courses and at various stages of a project, you need certain skill sets. So definitely, you know, in the early exploration stage, you know, when it's real grassroots, I mean, that's where, you know, the exploration guys are really in their forte, really in their area of expertise.

5:50But as the project transitions and there's, you know, maiden resources done and then you have to start moving into technical studies and metallurgical work and then all the costing and the permitting, I think that's really where, you know, mining engineers really come into the fore. And if you have a mining engineer that also has good business acumen and good management skills, they're certainly capable of taking the company through EPCM and construction development and ultimately, you know, running and managing an operating mine. You could even argue beyond that, however, as the organization continues to grow, does the mining engineer have the actual have the business acumen to manage multiple assets in multiple jurisdictions?

6:37In a lot of instances, that's not the case. And it's incumbent upon the individual to be able to recognize that and hand over the reins to the best qualified person for the sake of the shareholders and take a backseat and move on to something bigger and better. Or perhaps, you know, move, you know, remain with the company, but in a board position. and then they always say in our industry when ultimately you end up having a lawyer who ultimately becomes the CEO of the company you're probably in that final you know mature stage where you're looking to ultimately maybe sell the company or do some sort of major corporate development activities so I think it's horses for courses and you've got to match the skill set for the phase of where the project is actually positioned.

7:30Trevor Hall: Do you feel companies maybe underestimate the makeup of an executive management team? So, for example, like there's numerous stories out there where, you know, obviously geologists make the discovery and push things forward. And then it just gets to the point where it does need to grow up to that second version. Maybe that's exactly where Hercules is right now. That might be a great story for later. Or when maybe a finance guy takes over an early stage project, doesn't necessarily have the geological exploration background, but can certainly make numbers look very good for economic reports and permitting.

8:12Trevor Hall: Do you think, I mean, I guess, what do you think? Do you think not enough companies really appreciate or understand the cycle that is a mine life and really the best type of profession that sits into those executive roles? I think companies certainly, you know, the mature companies out there that are in production today and, you know, have sophisticated HR systems and, you know, well qualified people within the company. I think they definitely understand it. And in the junior field, however, sometimes people don't understand that. Either they don't have the experience or they just want to hold on to the position.

8:53Maybe it's a lifestyle for them, or maybe they just can't see the, you know, the forest for the trees, so to speak. But, yeah, more in the junior sector, I see people not understanding that. Okay.

9:09Trevor Hall: You've been involved with a couple of successful outcomes here over a couple of different companies now in your recent past. But instead of, you know, I really want to actually not ask you about, you know, the successes, but really kind of do some thinking about the mistakes and lessons you learned along the way. What is a decision early in your career that you probably would have made differently today? And how has that mistake changed the way you evaluate projects? Wow, it's a great, great question. And mistakes that I've made. Wow. Honestly, nothing actually comes to mind immediately. Mistakes that I've made.

10:00I've been so blessed and, you know, working with phenomenal people, phenomenal teams. And, you know, as you've heard me say on your show before, and the listeners will know, I mean, going into any possession, in any company over the last two decades, I've had the luxury of actually being able to do due diligence on the company before accepting any possession. And, you know, with the right skill set and having, you know, advisors around me when I don't particularly have that skill set or not particularly strong in a certain area, it allows you, as I've said in the past, to pick the winners before the race has even started.

10:45But I wouldn't say I've made any decisions that are mistakes or anything that I regret because based on the career that I've had, I've had phenomenal success and I'm absolutely delighted with that and I wouldn't change anything tomorrow. Yeah.

11:02Trevor Hall: You know, it's interesting if I look back at your time at Battle North and then also Arizona Snorin. Battle North, when you took over, I don't know if insolvency was the right term to put under the company. CCAA, creditor protection, yeah. Yeah, so you grew that resource from about half a million ounces to 1.3 million ounces, de-risked the Bateman through bulk mining, technical studies. You raised over$100 million, sold the company for$343 million Canadian. Yeah, it was an old cash deal, almost 50 % premium. Yeah. So incredible success. You take that knowledge and experience. You take over Arizona Snorin, which was Elam Mining at the time.

11:53Trevor Hall: That's when I first started investing when it was Elam. Yeah, when it was a private company. Advanced Cactus to over 10 billion pounds of copper. You raised over$300 million Canadian, obviously sold that to Hud Bay recently for$2 billion. I mean, is there a playbook in here that you look for? It's like, okay, I've done this before. I can do it again. Or is it specifically geological? No, there's definitely a playbook. Obviously, the geology is very, very important. And you have to be confident around the mineralization in the ground. and that it is actually economically recoverable. So that's the foundation of everything because if that isn't there, you're really building a company or building a project, you know, like a deck of cards.

12:45And as soon as you get your first crisis or crises, the whole thing is going to come crashing down. So the reserve and resource is absolutely critical. But there is a playbook. And, you know, you've got to look at where you're at in the cycle and make sure you're in the right commodity. You know, 20 years ago, you know, if we were talking about copper, nobody cared about it. It was probably, you know, under$2 a pound and nobody was thinking forward or had the vision to think about, you know, where the world was heading with AI and, you know, electrical vehicles and that whole, you know, greenhouse, green energy transformation.

13:25information. So picking the right commodity at the right time in the cycle is also very, very critical. And then you've got to look at the jurisdiction. Where is this thing actually, you know, going to be mining? Because you can't pick the mine up and move it to some other country or some other jurisdiction. So you have to assess that because that carries a big risk associated with it. And then you've got to look around and say, well, what infrastructure is already here that we can help take advantage of or leverage to help minimize future infrastructure and capital costs and sustaining capital?

14:06And can you take advantage of roads as their power or as their access to water? And then there's the community aspect as well. You know, how is the project regarded within the community? Is this something that will have community support or are we going to be pushing a rope up a hill and always have obstacles and backlash versus the project because that then will impact the timelines for the project and also the investor sentiment. And then, you know, obviously the economics, the financial and economics are very important. You know, where are we at with commodity pricing? Was the pricing likely to go?

14:43Your best guesstimate looking five, ten years out as you de-risk the mine? And can we actually make money on this? Because that's what we're here for at the end of the day, to make money for ourselves, for our shareholders and reinvest in the community and all stakeholders, you know, should participate and be successful. And then what's the regulatory and environmental regime like? Can I actually get this thing, you know, permitted and into production, you know, in the next five to ten years or is this thing going to be decades out there and am I wasting my time should should I be looking at something else and and when you bring all of that together into a mix it's like baking a cake you've got to have the right ingredients to make a really good cake and then it's not just about the right ingredients it's then working out the puzzle of how you fit those pieces all together and in the right sequence at the right time.

15:42So again, like baking a cake, you put in the right ingredients at the right time and then you've got to put it in the oven and bake it at the right temperature and keep checking on it. So yeah, there's definitely a playbook that is required to have success in the junior mining sector based on the results that we've had in the past over the last several decades.

16:08Trevor Hall: What do you think the most common thing is exploration companies overestimate about their own playbook and their own projects before they need somebody like a George Orgel V to come in and save the shareholders? Well, everybody always thinks that they've got the biggest and best project. And yeah, I know that you've got to market the project and you've got to, you know, obviously put your best foot forward. But sometimes you're actually better being conservative, you know, actually, you know, speaking the truth of what you have and then work with the best with what you have. You can still get a phenomenal result.

16:48But, you know, I see a lot in the junior game, a lot of over-marketing, a lot of over-hype. You know, everything is world-class where in reality that, That is not the case. Yeah.

17:04Trevor Hall: You know, I do want to go back to Battle North. I mean, because you and I, in the couple of years that you and I worked together and were following, covering the Arizona Sonoran story, we didn't really talk about Battle North at all. That wasn't the purpose. But I get the opportunity to do that now, if you don't mind. I think it's an important chapter in your story because you arrived at the company as it was kind of restructuring financially. and you weren't obviously starting from a clean sheet of paper. You inherited some really big problems. But what did that experience teach you about distinguishing between a bad asset and a good asset inside of a broken company?

17:46Yeah. Well, look, it's easy to look back now with hindsight, but that was definitely a project that was sort of overestimated, over marketed back under Rubicon 1.0 and I think you know the company at the time was trying to take advantage of a very hot gold market and there'd also been another asset in I believe Red Lake that had sold for several billion dollars and they were trying to ride on the coattails of that with all the you know hype you know around that sale or acquisition at the time by Goldcorp. And I just think the promotion took over. And, you know, when I looked at it, to be honest with you, first of all, when they approached me in July of 2016, initially I said no because of all the baggage and negativity around the story.

18:46And then in August of that year, I said, okay, well, look, I'll sign a CA and I'll come into the data room and do some due diligence. I even visited the project in September of that year. And I came to the conclusion, the fact that the mine had already been built, the shaft had been sunk, there was, you know, 13 kilometers of development in the mine, the tailings pond was in place, the infrastructure was there, the power was in. I came to the conclusion that all of those now were sunk costs. and if we had a clean slate and it wasn't good for the old shareholders because it was 162 to one rollback of the stock you know the debt people who were indebted to the company got paid cents on the dollar we negotiated with the two big lenders which was Royal Gold and CPIB at the time they took shares in the new co or the restructured company and starting with a nice clean balance sheet a really tight share capital structure.

19:52All that sunk cost. There was hundreds of millions of dollars of tax loss pools that we could use when we put in the financial and economic model. And essentially, we did everything the way it should have been done from square one. And we took a very pragmatic, a very conservative view. We redid the resource. We were drilling in those stopes on five-meter centers. we ran a 40 ,000 ton bulk sample you know people ask me George you're coming in we should rebrand the company tomorrow we need a new name and I said no when we go marketing we are going to market under Rubicon Minerals and if people don't want to take a meeting they don't have to take a meeting but I'm not going into meetings with fund managers and then as I walk out they realize, oh, this is Rubicon minerals.

20:48George is trying to pull the wool over my eyes and, you know, put lipstick on a pig. That's not how I or my team operate. And for four years, as we de-risked that project, we marketed the company under Rubicon. It was only after we came out with a feasibility study, the 40 ,000 ton bulk sample, you know, the two or three updated MREs had raised additional monies and we'd won back the trust and respect of the market, that we actually rebrand the company to Battle North Gold. And within a year of doing that, we obviously got taken out by Evolution Mining. And that's how these projects are supposed to work.

21:31But I would say, had I gone in, and I wouldn't have, But had I gone into Rubicon 1.0 five years prior under the original company, that company would not have been successful. Because that infrastructure was not there. You were going to have to put in$700 million of value. That project would not have worked the way it was originally built, even if I had gone in there. It only worked because there was$700 million of sunk costs and hundreds of millions of dollars of tax loss pools, which made the mine profitable at that time. And remember, we were dealing with$1 ,300,$1 ,400 an ounce of gold. Today, at$4 ,500 an ounce of gold, the thing looks very different.

22:22But back then, 10 years ago, that project was never going to succeed off the bat.

22:27Trevor Hall: So the infrastructure, the building of the infrastructure, the dilution to get that done at the time was a mistake, but you saw it as an opportunity. I saw it as an opportunity and an opportunity to rescue something, you know, out of essentially nothing. Yeah. And I think that actually is quite interesting because I did want to ask you kind of when the importance of capital markets does come in and the importance of being able to crunch numbers and find the opportunities within the spreadsheet. And a lot of times most geologists, you know, don't have the tool set to make that happen. But, you know, it's like if you're too early, if, you know, the successful mining stories have geology, capital markets working together in tandem.

23:17Trevor Hall: But you do it too early. You spend enormous amounts of shareholder capital proving something out that isn't the appropriate time like you just described. Yeah. And too late, you may not have the money to advance the geology needed to build the mine plan. So when's that perfect time for those two entities to start working together? Well, they should work together as soon as possible, as early as possible, because, you know, that's one of the issues in the junior sort of exploration field as well, is that, you know, people will drill out deposits to a certain size. you know I'm okay with it on an inferred basis let's say but when you start doing the infill drilling and tightening up the pattern to measured and indicated and eventually thinking about you know reserves you need to have an opinion or formulate an opinion at that point in time as to you know how big do we want this mine to be and you know and what should the life of mine and the production actually, you know, what would be the optimum levels?

24:23Because you don't want to be sinking money into drill holes and have a hundred year mine, let's say, because we know when you get into those financial and economic models and you get out beyond year 12 or year 15, you know, the impact on the NPV, the way the models work with the discounted cash flow has absolutely no impact. so drilling measured and indicated drilling beyond 15 20 years what what impact is it really having to me yes you you want to drill out a mineral resource estimate maybe the inferred category to show that yeah we've got a 20 30 40 years of resources here but you need to hone in on that when it comes to you know the actual mind the size the daily production the annual production and what do we want here, 12, 15, 20 years?

25:17Trevor Hall: Yeah. So you laid the foundation. It's all about it, by the way, because we knew there were other areas where our sarco had drilled and hit mineralization, and if we had put drills there, we would have been able to duplicate those results and increase that resource. But we were already at close to 20 years, ultimately, which obviously for a copper porphyry you know is is is a good start but i think more copper is going to be discovered there but it had absolutely no impact on the financial and economic model and at the end of the day we were just really throwing dollars down the drain when it was better needed on you know getting into the feasibility study and ultimately epcm and and putting deposits on long lead item equipment.

26:06Yeah.

26:07Trevor Hall: So let's talk about the foundation of Cactus. Because obviously we talked about Battle North and that playbook. You did a great job of eloquently explaining that. When you come into the Cactus project with Arizona Sonoran, you know, what was ELA mining? As I mentioned, I participated in the private last, I think it was the last private round of that before it became Arizona Sonoran. And it was a different set of problems, a different set of challenges that you were faced with. I mean, it seemed to be some generous royalty agreements made before you came in. And I think a lot of shareholders were a little perturbed.

26:48Trevor Hall: It was a private company at the time. but so it was a different set of problems but can you maybe describe the challenges that were different with the cactus project when you first came in but yet how did that playbook kind of attribute to really getting the project back on track yeah well you know going back to scratch again you know when i was originally contacted in may of 2021 you know we had just sold Battle North and quite literally the day after we sold Battle North, I was contacted by a headhunter looking for a CEO for Elan Mining. And, you know, after I spoke with him and, you know, thought that, you know, this is something maybe I should take a look at.

27:36The very next day, I had signed a CA with the company and I was doing my due diligence again. So you see that playbook, got into the data room, you've got a mining background, you've got practical mining experience, You can go through the technical reports and discern what is actually real and what is BS, what is not going to happen. A lot of those technical reports, they're not worth the paper they're written on in the junior sector game, to be honest with you. So you're able to discern and work out what is actually going to work or not. And I saw, hey, it's the U.S. Tier 1. It's copper. It's a former producing mine.

28:16you know they've got hundreds of thousands of meters of historical core they've got the pulps so we can rely on that information you can look into the open pet and visually see all that mineralization in the sidewalls and at the bottom of the pet it's got roads it's got power there's a supportive community oh and it's on private land because at the time you know republicans weren't in office, it was the Democrats. So you've got to be thinking about, oh, how do I get this permitted? And suddenly now you're all on private land. Nobody knew, you know, Trump and the Republicans would get in and, you know, he'd be so supportive of the U.S.

28:55mining industry. So he pulled all of that together and you can see you've already got, you know, a lot of positive attributes that this thing could move forward. We did, however, recognize that I think the maiden resource that we published as part of the IPO document was around three and a half billion pounds of copper. And when we looked at the site, the footprint was very small. It was only about 3 ,500 acres. And the team before I got there had already did a good job in expanding it from 1 ,200 acres to that 35. But it was fairly obvious that the land package was going to have to more than double.

29:39And if you followed the company, that was something that we did over the four years at the right time as we increased the land package up to 7 ,800 acres that ultimately could accommodate that 20-year mine life, accommodate the leech pad space and the space for the waste that was going to be generated from the overburden that would come from that 20-year mine life, and obviously accommodate the engineering building and all of the other facilities that are required. So that was a different challenge than what we had at other projects we had gone in where the land package was huge and we had more than enough space to deal with.

30:22Yeah.

30:24Trevor Hall: Amongst all this thing, obviously there's an end game here of both those projects, and that also brings up almost like a philosophical question around selling projects projects and selling companies here, George. Yeah. So you sold Battle North Evolution, Arizona Sonoran, as we said, went to HUD Bay. Yeah. You look back at those two, and maybe there's another playbook here. But how does a CEO determine when shareholders are better served by continuing to build independently versus handing those assets off to a larger company with stronger balance sheets? Well, it's a great question. and you've just got to recognize, you know, when have you sort of reached your optimum value?

31:09And, you know, if somebody is in the data room and they've put an offer on the table, does that offer, you know, represent as good or better value than the go-to-alone plan? And of course, on the go-to-alone plan, you've got to look at it on a risk-adjusted basis. when evolution mining put their offer on the table for cactus and we compared that to the internal plan the internal plan was better than what evolution mining put on the table marginally better but evolution mining was offering cash whereas the internal plan everything had to go to perfection so we and i've worked in mine mining now i'm on my 37th year since graduation in 1989 we all know when you get into operations in your minds things go wrong you have challenges you have breakdowns you know you get a letter from the regulator and you've got to stop something perhaps so things go wrong and you've got to recognize that that nothing nothing's perfect and when you look at your own go-to-loan plan on a risk-adjusted basis and you're honest with yourself it becomes very very evident that if somebody's putting cash on the table in front of you to take today at a 50 % premium that that that's the type of deal that you want to take yeah and you know i i've seen this in the junior industry from inside there are so many deals that are on the table and get put to companies and CEOs and board of directors and they don't take them.

32:56They don't put them to the shareholders to vote because they think that it's bigger and better. They can do even better than what they've got on that spreadsheet. In some instances, they do. But in 90 % of the occasions, they don't. and the shareholders, it never comes to light.

33:19Trevor Hall: That's fascinating. I mean, it's amazing to think, you know, what would drive you to think you can do it better independently? Or, you know, how do you separate that attachment to the company from your obligation as a capital allocator? Like what's more important, your CEO position or capital allocator for your shareholders? And, you know, obviously... Well, it's complex. I mean, sometimes in companies, you know, they might have, you know, ambitions to do M &A themselves or, you know, they believe that, you know, there's another deposit or they've just had some success and they haven't had the time to drill it out and determine what's actually there and how do you ascribe any value to it.

34:04So it's very, very complex.

34:07Trevor Hall: but the the last the last two deals you have done you left the table knowing that your your approach doing it independently was not the best decision so you have not thought about my like my my team's way is better than the offer at the table all right you know like you're not you're not building minds yourself and i'm just kind of curious how hard of a decision was that for you if you go back to battle north and then on to the cactus project was it a hard decision for you to be like no, we are going to part ways. No, when we looked at it as a senior management team, and you've obviously got very knowledgeable, intellectually experienced people around the table, and you put everybody's experience and get everybody's opinion, and you come to the same conclusion, and then you bring in independent financial advisors, and they ultimately advise you that this is the best course of action.

35:02We're happy to take that course of action, assuming that the board of directors is on board because at the end of the day, it still has to go to a shareholder vote. The shareholders then get all the information and they have to decide. The frustrating part for me in our industry, particularly in the junior game, is in a lot of instances, that information or those deals never see the light of day and the shareholders don't get to vote on it. So that's the frustrating part. but we're happy to walk away because we walk away with the shareholders being happy we've made them money they can you know recapitalize put that money into something else and have another win and you walk away as a management team with your credibility and reputation intact another big feather in your cap and you can move on to something bigger than better look less than a month ago my team and i announced we were joining hercules metals and we'll i know we're going to get into that.

36:04Stock was 60 cents. The stock has gone as high as$1.62 on no news going out other than it's now from the team. But why is that? The reason for that is that the market recognizes, oh, George and his team have had success in the past. We trust in them. They know something. We support George and we're going to come in. And if you hadn't have had those successes in the past, we wouldn't have seen the share price, you know, and increase 200%. Yeah.

36:36Trevor Hall: Yeah. No, the stock moved because of that news announcement and the track record that you have proven bringing now going into Idaho. And I do want to get into it. I got one last question on the philosophy of selling here, because you mentioned a lot of management teams are given kind of deals that don't even go to the shareholders or you know just pass by why do you think that is is it is it just kind of diamondized is it ego greed or what what would cause a management team to say like nope not we're just gonna do it ourselves well look i mean you you think about the time money and effort and hours and hard work you put into getting these projects from grassroots exploration plays and to, you know, exploration and eventually all the technical studies and the permitting.

37:34I mean, it takes years. And you've put all that blood, sweat and tears into it. It sometimes can be very difficult to know just when to let go. That's just human nature. I mean, I always use the analogy, it's like, you know, your children as well. I mean, you have your children and you see them grow up and you nurture them from birth and they go to the first school and then there's a graduation. And then there comes that point in time where you need to stop parenting, in a sense, and you've got to let them go. You've got to let them go out into the big world and find their own way. And yes, you want to be there to support them, but at the same time you don't want to smother them.

38:15A company is the same way. You need to know when to let go.

38:21Trevor Hall: Yeah. Let's do talking about Hercules. you know you could have taken a long ride into the horizon George I don't know what you would have done with yourself if you did call it quits but obviously I think a lot of us are happy to have you back and do so in a pretty quick manner yeah I will say before we get into this following the announcement that you and your team were taking position I did take a I did take a small position in Hercules metals nothing to brag about or write home about so it's just it's very small but you know just the news on the announcement was enough for me to be quite interested but after this extraordinary outcome in Arizona Sonoran that you and I chatted about for a couple of years like really excited to see what you can do at Hercules and I will tell you just if I may say so from an observer prior to not necessarily shareholder the discovery at Hercules was a tremendous discovery, the follow through on the exploration was just very hard for me to comprehend and kind of get that story wrapped around my head to make an appropriate decision for my own capital allocation.

39:34Trevor Hall: And I don't think I'm the only one, if I may so openly may say, I'm not the only one that maybe shared kind of that confusion. And so, you know, what did you see in Leviathan and maybe perhaps Idaho more broadly is this fervor of new exploration has been coming into that state for the last couple of years now since that discovery. What's convinced you about this to make you want to do this all over again? Yeah. Well, again, same situation. Sorry, I'm starting to sound a bit like a broken record here. But as you know, in March of this year, we announced the Hudbay transaction on Arizona Sonora.

40:14Alison and I had gone off to Zurich for the Precious Metals Conference in late March. We met a fund manager there who was a shareholder in Arizona Sonora and was delighted. And he was also a shareholder in Hercules Metals. He asked us, do we know the company? We said, never heard of it. He said, well, I know the chairman extremely well and the CEO. And I believe they're actually looking for a management team to come in and, you know, take the company in a slightly different direction. So would you be interested? And he shared over 15 minutes at a very high level, some of, you know, the positive attributes, which he believed for the project.

41:00So the following week, this would be early April, I spoke to the chairman. There was enough there where we signed an NDA and we started conducting due diligence on Hercules Metals by mid-April. And of course, by the end of July, we'd come to the conclusion that this was a project where we absolutely wanted to come in as the management team. we were extremely fortunate as well and that Chris Paul the ex-CEO recognized that you know he's probably in his late 30s an extremely accomplished exploration geologist but this was his first opportunity at the CEO level he had the insight to recognize that he didn't have all of the skill sets required and given this was his first time and he needed help and he was willing to step aside to bring in the right management team and play a role in the future success of the company.

42:03We really need to commend Chris for that, you know, kind of thinking and maturity. It doesn't happen in our industry enough. And people, as we've discussed on this call up till now, tend to want to hold on for whatever reasons for way too long. So we have to I commend Chris for seeing that and having the foresight to step aside. And I'm very confident that himself, the management, the shareholders, and other stakeholders over time are going to do extremely well with this story. So why did we jump in here? Well, first of all, let's just talk about the resource. So they've got this Leviathan deposit.

42:46They poked a hole in there in 2023, 180 odd meters, exceptional copper. There's some molly. Now, this entire region in the past was really known as a bit of a silver play. And there's epithermal silver very close to surface, but the copper was unknown. And there was an empty survey flown over the property, I think, in 2022. They were obviously magnetic conductors that were highlighted, and that's really what gave Chris the idea to poke in a few deep holes, and he got into the top of the porphyry system. and as they have followed up with additional MT and now inverse polarization in addition to Leviathan they've actually seen three other anomalies on the project which are Hook, Southern Flats and Pegasus and what we liked about it was that definitely Leviathan has got the ability to be an open pet given the current mineralization comes to within about 100 meters of surface.

43:57As it moves to the southwest, it plunges, very similar to what we saw at Park Sailor. And we think that should really be where the initial focus is. The other thing to bear in mind is that they've only explored on 20 % or 20 ,000 acres of their existing land package. There's over 100 ,000 acres here of land. What else could we like about it? It's copper. It's going to have some molly. And because there's silver near to surface, you might actually be able to incorporate that into the design, particularly of Leviathan, where you can actually minimize the strip ratio or improve the economics by actually mining the silver as well initially before you get down into the copper porphyry.

44:54There's roads in the area, paved roads. There's three hydroelectric dams. The main power lines run over the property. So you know you're going to have the ability to tap into relatively inexpensive power, green energy down the line. there's water in the ground that they currently use obviously for the drilling we need to do more work on that to see if there's enough water for all of our operational and processing needs but my gut feeling tells me in that area of the world there probably will be water in the water table the other thing we liked about it we visited the site in June we met with representatives from the city and key business people.

45:42And the feedback we got was extremely positive that they want to see the project move forward. Leviathan itself is on private land, meaning this company controls the surface and the mineral rights. But once you step out of Leviathan, you start getting into state and then particularly federal land. So unlike Cactus, where it was all on private land, And we are at some juncture going to have to engage with the U.S. Forestry Service here. And of course, any time we have drill pads on the forestry land, we're putting in plans of operation and getting permission from forestry to put in the road and put in the drill pad.

46:26That has happened in the past and it'll have to continue going on in the future. one of the things we saw which can be rectified is that they've only had two drills drilling on this 20 ,000 acres of land where they've picked up these anomalies with Leviathan, Hook, Pegasus and Southern Flats and they've kind of been like kids in a candy store and I've seen this in the past and what I mean by this is if a kid goes into a candy store and there's all these candies on the shelves with all these sweets. What does a kid do? They go up to try and go into every jar and dip their hand in and whatever, as opposed to having more of a focused, with minimal resources, right?

47:14I know you laugh.

47:15Trevor Hall: No, I'm thinking about the opening scene of Willy Wonka and the Chocolate Factory. Oh, okay. Sorry, I wasn't. Because I literally just washed it with my daughter like last weekend. The Candyman can. That's what I was thinking. Sorry. Great analogy then. But that's what can happen. You've got to be very, very disciplined. So immediately what we saw was, look, take the only two drills we have and let's put them on Leviathan because that's where we know we've got a large resource that can be expanded and probably would be the focus for an initial mineral resource estimate eventually when we get there.

47:59The other thing that we're doing right now, and this is extremely difficult, given the availability of drills in the United States, everybody is drilling and everybody wants drills. But we've reached out to a couple of drilling contractors and one of them is visiting the property next week. And our goal is to try and increase the drill count in 2027 once we've obviously completed our budgets at the end of this year and we understand, you know, where the$32.5 million and the Treasury will take us to, given the plans that we have, and then can we physically get those drills in on site? The beauty of this project, in my humble opinion, for the drilling contractors is that if a drilling contractor comes in here and they do a good job, they will have a contract that easily could be 5, 10, or 20 years of drilling, given how big this system is likely to be.

48:58This is not a one or a two-year contract. This is a decade-plus contract easily. So I think that's going to be attractive. So budgets by the end of the year, that's hopefully coming in from drilling contractors, and then we can increase the drill count next year. And that comes back to an important point that you raised. The company puts out good drill results, but they don't do it on a frequent basis because they've only got two drills going and the drills are moving all over the place to different targets. If we can stay focused, at least initially, on Leviathan and bring in additional drills, the news flow is going to increase.

49:43And as we all know, the markets are very fickle. people don't have long you know times when it comes to concentrating on things you put out a great news release today by next week it's forgotten so if you're not putting out continuous news flow you're not front and center so we think the plan that we have will move the company up next year as far as news flow is concerned and i think that's going to create a lot of excitement around the story as we put out more continued good news.

50:14Trevor Hall: Yeah. Thank you for that explanation. And obviously Leviathan comes, I mean, it's a lot more green fields than, you know, say Cactus was with all that historical information. And, you know, you just scratched the surface. Chris and team have just scratched the surface with Leviathan with that discovery and some of, you know, promising follow-up drill holes. But I think your time, I mean, is it fair to say that the timeline here with Hercules, investors need to potentially expand that horizon than what was Cactus and also with Battle North? Because it's still early stage exploration with Porphyries.

50:59Trevor Hall: It takes a lot of time, a lot of capital, a lot of drilling to really understand these things here, George. And those are things you inherited with Cactus. You had a really good understanding because there was so much story of drilling in Cactus. Oh, absolutely. Yeah. Yeah, we had 200 ,000 meters of historical drill core from the 70s and 80s with all the pulps that we, you know, tested 5 % of. And when the QP was satisfied, you know, that immediately came into our reserve and resource, right? Right, right. We don't have that here. So that's going to take some longer time. You're quite right there.

51:32But the way to skin the cat at the moment is, you know, we're drilling on 500-foot centers now at Leviathan. 130 meters. We're doing that because we know when we come out with a mineral resource estimate, it gets us there sooner, but it'll only be in the inferred category. But I think the key thing here for the market to look out is the scale and the size of this. How big can it actually be? And I always remember, you know, when we were in Arizona, we spoke to a couple of the senior base metal producers and they gave me a number on you know a tier one asset for them and it was 20 billion pounds of copper if they see something that's 20 billion pounds of copper or more especially if it was in the united states for example it definitely would be attractive to the seniors so that was a number i took away from arizona sonoran in my my five years in arizona Yeah.

52:32Trevor Hall: To get to an expanded drill program, more rigs on the ground, it's going to take some capital, George. Obviously, I don't think you would have any problems with a financing package for Hercules, but it just definitely feels like something like that needs to happen. Are you currently in negotiations to talk about that next round of financing and what the equity structure of Hercules is going forward? Does that change at all? Well, we've been approached by a couple of banks already putting the feelers out about doing a deal. At this stage in time, we've said no. The company has a very strong treasury for what it's currently doing,$32.5 million.

53:17I think on a monthly basis we're burning through$350 ,000 in drilling costs Canadian. So, you know, the Treasury, based on the current plan, can stretch well into the second half of next year. However, as we go forward in the next two to three months, now that our feet are on the table, we have started our budgets for 2027, and we will be having strategic meetings in the next month to determine, you know, what's ultimately the course and where do we want to go with this company. So I would expect by the end of the year, that'll all be in front of the board of directors. They will have signed off on something and we'll be in a position to know just exactly what we want to do for 2027 and how much monies do we have and how much monies do we have to raise to expand that program.

54:03And importantly, if we do that, we're able to communicate to the street, to the investors, this is the use of proceeds. This is how we intend to put your capital to work. And these are the returns that we're expecting. These are the goals that we're hoping to achieve by taking your hard earned money.

54:22Trevor Hall: Final question, because I know I only have a couple of minutes left and kind of a bigger picture professionally, personally, this next chapter that you're engaging in. So obviously you've had those two significant exits in the last number of years. Yeah. If we're sitting here again, five years from now, George, and I certainly hope we can continue the conversations because I love talking to you. Always have, but what would, how would you consider this next chapter a professional success? And I don't necessarily mean a share price or a takeover value. What would you like to have proven about maybe Leviathan, Leviathan, Hercules metals, or perhaps yourself as a, as a, as a mind builder?

55:08Uh, well, look, I think, I think Chris Paul, again, needs credit for this. I mean, the fact that, um, you know, he's probably discovered a whole new copper porphyry district in the United States in Idaho is one hell of an achievement. And, um, you know, I'm coming into the twilight of my career now. I think, you know, proving this deposit and these assets in this district up and then seeing it go into the right hands, let's say, at the right time and being further developed, I think that would be a tremendous achievement for myself and my entire team because if what we believe is actually there, you're looking at a mining camp, a district that would be here in 100 years' time.

56:01Trevor Hall: Boy, wouldn't that be something? Yeah, that would be incredible. There would be books written on that. And then, you know, in history, people would look back about the Idaho copper porphyry mining discovery. And, you know, you're going to be all part of that. I mean, it'd be phenomenal. Yeah, amazing. All right, George, good to see you. I've been wanting to have this deep dive conversation with you for a long while now. Glad we can finally make it happen. Thanks for your patience with my technical difficulties. I really do mean it's a pleasure to speak with you, and I can't wait to continue to follow the story and what you and your team do with Leviathan going forward.

56:37Thank you, Trevor. We appreciate it. Thank you.

56:40Trevor Hall: All right, everybody, that's a wrap here this week. We'll be back next week with more from Mining Stock Daily, the morning briefing, and your corporate updates. Have a wonderful weekend, and be well. The information presented should not be considered investment advice. Mining Stock Daily and its affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein. Please do your own research or speak with a licensed financial representative before making any investment decisions.