Zach Flood: Franco-Nevada Backs Kenorland's Next Phase of Growth

0:15All right, everybody, welcome back in to Mining Stock Daily. It's been a little while since we've got to sit down here with Zach Flood, CEO of Kennerlyn minerals they do trade on the venture exchange with kld and on the otcqx with kldcf the company's coming off big news a new private placement and a new investor from the royalty space in frank in the bank zach good to see you how's the how's the week been it's been good glad to be out in

0:46Zach Flood: europe again we've got a lot of great shareholders over here so it's nice to catch up with everyone and yeah I'm happy to have closed the financing recently so we should be set for the next few years going forward and yeah you don't find it no the previous one to this was over two years ago when Centera came in I bought 9.9 % of the company that was at 80 cents so yeah this last one at$2.10 we just raised $16.3 million. We'll now have around$25 million in the Treasury to end out the year, and I think that should keep us in good shape for potentially three to four years going forward. So Franklin of Nevada comes in for just over 12%, almost 12.5%.

1:35And I asked you this yesterday during your presentation while I was chairing your session, so I'm going to ask you again for everybody who wasn't in the room. So with Franklin, Nevada, why does a royalty major want equity in Kennerland? And why is it important for them to come in and take a stake in a place like Kennerland?

1:56Zach Flood: Well, I think two things. One is the cornerstone asset we have on the Frotep project in northern Quebec is a major royalty asset. It's a 4 % net smelter return. and there's a 0.75 buy down on that for 13 million, leaving about 3.25 % uncapped. Sumitomo Metal Mining owns and operates that project now. It's at inferred, made in resource stage, so still early days there. I think there's obviously a lot of questions as to how big this deposit's going to get and what's the timeline and what's the ultimate scope of the project look like. but what I think everyone sees at this point is it's a really high quality multi-million ounce high grade resource near infrastructure in a tier one jurisdiction operated by you know a tier one operator like Sumitomo Metal Mining so big royalty percentage there too covers a huge area great royalty agreement so all those reasons I think set that and kind of a class of its own a lot of a lot of royalties that have existed out there in the space recently have been acquired, which kind of fell into that same category.

3:14Zach Flood: So yeah, I think having the cornerstone asset definitely attracted a company like Franco Nevada, but also our business model, you know, going out, generating additional royalties over huge areas, doing all this grassroots exploration. You know, there's so much optionality in that business. And I think just, having a company like Franco get behind it and support us to continue doing that work makes sense from our perspective and from their perspective as well, just to have a closer relationship as that portfolio develops in the future and whatnot. Your three strategic holders all topped up and came out to a total of$16.3 million Canadian.

4:01What are you going to use the money for?

4:03Zach Flood: I mean we we continue to do lots of staking in eastern Canada lots of lots of ground consolidation lots of early stage exploration ourselves we've been sole funding probably on average about five million a year you know the last few years we've been a little bit more aggressive because we kind of refreshed the pipeline and we've done a number of really big kind of grassroots geochemical surveys to get those projects kind of kicked off but yeah lots of lots of the same i think you'll see you know what we've been doing over the last few years that's what we're going to continue doing which is uh acquiring big land packages and and systematically kind of moving them forward with these early stage surveys and then we're we're always trying to attract partners as early as possible and and bring in the you know someone who can fund the the heavy lifting when it comes to the drill programs and advanced stage exploration on those on those projects so you know it's uh it's not a hugely capital intensive business model in that sense like we're not out drilling projects ourselves over and over but we obviously want to remain really well capitalized in a strong financial position you know to continue doing what we've been doing yeah so let's talk about some of the exploration work and obviously we're going to talk about protet first and then go on to some of the other projects.

5:25But Sumitomo keeps hitting high grade. Hole 287 was outside the resource. How much input do you still have on the exploration work with Sumitomo? I understand why you've taken a step back just to the relationship after the royalty was announced. But how much input do you have? And really, what is the expectation for maybe an updated resource out of Fortet?

5:46Zach Flood: So there hasn't been any talk or guidance on an updated resource from them, but we have publicly disclosed the kind of broad steps going forward, which is permitting a decline in bulk sample. And, of course, Sumitomo is working on their own sort of internal economic studies on it. Ultimately, I think the biggest milestone going forward would be potentially a decision for them, whether or not they construct a decline in bulk sample. If they do move forward on that, that's a huge, huge kind of pivotal point in the project. But again, that's really up to them. In terms of input on the technical side, our geologists are still working very closely with Sumitomos in terms of modeling.

6:35Zach Flood: And we always provide a little bit of our own guidance in terms of where we think there's additional potential. But they have a pretty good grasp. They have a very good grasp on the geologic model and the controls on mineralization. after having worked on this for many, many years with them. I'm very comfortable with how they're approaching the exploration, and I think we're definitely aligned in terms of how we see this thing growing. Yeah, the last press release we put out on it, I think that was the results from the latest two drill programs that they completed themselves. And it looks like the general path forward is stepping out, growing the resource footprint, seeing how much bigger this can get.

7:18Zach Flood: But yeah, I'm not sure in terms of whether or not they'll put out an updated resource anytime soon. Okay. What would you like to see on Frontend? Obviously, them being built tomorrow. I mean, what was a good timeline here? Yeah, they've looked like, I think we've, again, can really only speak to what we've already talked about publicly. But roughly there was this timeline that I just talked about with the permitting and construction decision for a decline and bulk sample. And, you know, I think that could all happen within the next few years potentially if those decisions are made. But I think the projects always move forward very kind of consistently and steadily on a really good timeline.

8:03Zach Flood: The difference between, you know, a bigger mining company and, say, a junior is that, you know, they really want to get underground and understand what the project looks like from a kind of an economic standpoint as opposed to sometimes a junior is more inclined to just kind of grow, you know, the resource as big as possible to make sure it becomes like a target for a takeout. So you end up spending a lot more time and money drilling those things out. Whereas, you know, I think if you have confidence that the resource is going to grow in the future, you can kind of, you know, get a head start on the potential development of the project.

8:43So let's let's move on and talk about South Inchi, which is in partnership with your friends at Oronova Resources. You have commenced phase four drilling project. What is phase four? What is the kind of the strategy with phase four? What does success look like there?

9:01Zach Flood: So there was an area that this was earlier this year that we drilled called the North Papa kind of target within the broader Papa on the target area. which is a huge area, you're talking 10 kilometers by 4 kilometers, it's a big area around a lake in the center of the project. On the north-eastern side of that broader target area, we drilled a fence across the topographic low, kind of this valley that was covered with deeper overburden. And we intersected a 200-meter wide corridor of gold mineralization. I think within that the best intercept was around 65 meters at 0.3 grams per ton. But there was, you know, there's a number of other intervals as well that comprised, you know, over this 200 meter wide corridor.

9:52Zach Flood: So there's a lot of fluid flow. The rocks look really good. They're really altered, mineralized, deformed. That was one fence kind of in the middle of nowhere with no historical drilling around it. So phase four was stepping out systematically from that fence and that hole to see, you know, what changes along strike and down dip. And so, yeah, we've since completed that program and we're waiting on assays. I suspect, you know, with the labs being kind of slow towards the end of the summer and into the fall, we'll probably see results maybe by the end of this year, but maybe even early next year.

10:30Zach Flood: Oh, wow. Okay. Cool. So other than, I mean, those are the two big ones, it seems like. I mean, you have a number, obviously, a ton of projects in the portfolio. But just kind of curious, like, what's on your radar for 2027 that you're really excited about that isn't, you know, FroTat or South Fuji? Yeah, well, I'll talk about one other kind of two projects that we have under option with Santerra Gold. Those are very interesting, and they're at that drill stage. So we drilled the W-2 target on West Wabagoon this year. didn't get incredible results but certainly there's a gold system there we've expanded the till survey the gold grain survey around that target and other target areas on that property and defined you know definitely there's certainly other areas that required follow-up drilling on the w-2 but also there's the w-1 target and the w-3 which have no drilling no historical drilling on them definitely warrant drilling so So we'll see drill programs, a very significant amount of drilling probably on the West Wabungan project next year.

11:34Zach Flood: The Flora project has a big, large, you know, gold grain and gold anomaly. And we've prospected that a number of years and found gold in bedrock as well. And that's never been drilled historically. So we'll likely be drilling that as well. So those two projects are going to see quite a bit of drilling next year, which is going to be really exciting. And then really what excites me is just, you know, these projects, the amount of staking that we've done over the last two years, mainly in Ontario and Manitoba, you know, seeing potentially new partnerships come into the fold on those. And a lot more surface work, target definition, you know, again, just advancing this huge pipeline that we have in the background, I think, is really what's exciting.

12:23Zach Flood: and then getting out into these belts that we haven't really explored before and finding out what's out there. And, yeah, like it's been, you know, we've been aggressively expanding the portfolio the last few years. So a lot of those projects are now ready to kind of, you know. And some of them we've actually been working on this summer. Like we've carried out a number of big soil geochem till programs this summer as well. So we have a bit of a head start on some of these, but a lot of them we haven't even touched the ground yet, so that'll be kicking off next year. The company's sitting at about a$170 million Canadian market cap, and obviously the royalty deal was a transformation for the company, but it seems as we sit now, most if not all of your valuation is just on the ProTet royalty itself, and you're not getting a whole lot of appreciation in the exploration side.

13:16But is that fair to say? And I guess that begs the question, where does Carolyn sit today? Is it a royalty company or is it an early stage explorer? Like that's what its roots are.

13:28Zach Flood: It's hard to say where the value is being ascribed to. Like you could say it's the royalty, but I think a lot of investors are in it for the project generation business as well. And so, you know, I wouldn't discount that. There's plenty of value in this huge portfolio that we have. and these partnerships and just the team's capability and track record, I think, as well. In terms of what we are, we're always going to be, I think, a project generation company. We're certainly not acting like a royalty company. We're not trying to acquire royalties. We're trying to do exploration and make new discoveries, and we are creating royalties on all these projects.

14:13Zach Flood: So, you know, that's my stance on it. Okay. All right. Well, it's going to be a really active 2027, obviously. What's kind of going to be down the pipeline if we talk again in another six months here, Zach? Yeah, hopefully some new partnerships out there, more partner-funded exploration, kicking off a lot of these, a lot of surface programs on new projects within the pipeline. and of course there's going to be there's always a number of drill programs out there testing new targets and that's you know that's obviously the most exciting thing is drilling something that's never been drilled you always have the potential of making another discovery so that's going to be huge and then you know as Sumitomo moves up project forwarding in Quebec there's going to be some big developments there as well on the permitting side likely.

15:07Okay, well more to come and we'll try to touch base here a few times next year here Zach. Kennerlin Minerals does trade on the Venture Exchange with KLD and on the OTCQX with KLDCF. I'm also a shareholder of the company. It's good to spend some time with you this week Zach, it's been far too long.

15:27Zach Flood: Thanks a lot Trevor, appreciate it. More to come here from Zerg, so stay tuned.

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