Marifil Mines Ltd
President: John Hite
Juan Costello: Good day from Wall Street, this Juan Costello with The Wall Street Analyst and joining us today is John Hite the president of Marifil Mines Limited. The company trades on the TSX venture, ticker symbol is MFM. Thanks for joining us today John.
John Hite: Thank you for having me Juan, it’s a pleasure always to talk about Marifil and our projects and our plans for moving forward.
Juan Costello: Definitely, and so starting off give us a brief history and overview of Marifil for some of our listeners that may be new to your story.
John Hite: Okay. First of all, my partner Dick Walters is a professional geologist who started work in Argentina 1991 and was the founder of Yamana Resources, which has now become Yamana Gold. And my involvement in Argentina began in 1999 when I went down there looking at the Los Aguilas nickel deposit. In 2003 Dick and I formed a company called Marifil Mines Limited with express purpose of buying up a company in Argentina called Marifil SA which owned a small portfolio properties. This project Marifil SA was put together by a geologist Daniel Buffone, who had worked for Dick in Yamana and Dick had trained him. Marifil purchased the property and we began trading in 2005. We subsequently expanded our property portfolio and now we have approximately 21 projects in nine different provinces. These projects total something in excess of about 550,000 hectares of land. We‘ve put three legs under our stool. Number one, we have non-metallic or fertilizer minerals and number two, we have base metals and number three we have precious metals.
Juan Costello: Certainly, so speaking of which…talk about your joint venture model.
John Hite: Our business model is to be a project generator. Dick and I and all of our geologists in Argentina have all found commercial deposits, as a matter of fact a number of them. So we know what to do there, but that’s our strength, is finding deposits. So we have decided as a corporation is that we’ll find things, put in value added and then farm them out to other companies. And this has worked pretty well for us. Since the founding we’ve raised about 6 million dollars but though our joint venture partners we have spent more than $50 million dollars. So we’re getting really, really good leverage for our shareholders.
Juan Costello: Certainly. So what are some of the operations that you have there specifically in Argentina which you had some high grade discoveries earlier in the year?
John Hite: We have several large projects and some of them are not only large but high grade. One of the projects that we like the best, our potash, our sulfur and our phosphate program. We’ve been very, very successful in this, we have identified six potash properties. We sold one of them to Allana Resources, we have five left. But we’ve decided that potash, sulfur and phosphate are really a little bit off field from our core businesses. So we’re going to spin those out in the new company called Marifil Fertilizer Company and we’ll dividend out shares to our shareholders of the original Marifil Company.
We’re talking now to several multi-national companies and one Sovereign Wealth Fund I think might be interested in this spin out. We really need a major partner because we think it’s going to take probably a billion dollars minimum to put a million ton a day potash plant into operation. Now we also have a phosphate program underway and we’ve already found some phosphate, nothing in commercial value yet, but we’ve identified a new area for phosphate. And there the capital costs are probably significantly lower…in general that’s our plans for the fertilizer minerals to spin them out.
Now our other, one of our other big projects is called San Roque, it’s extremely well located. Projects don’t get any better than this in terms of infrastructure. It’s in an arid subtropical climate, land is flat, there’s probably less than 200 feet of relief on the whole property. And because it’s a subtropical area you can work year round, no snow in the wintertime. Near the south claim boundary is a rail road and a paved highway, 65 kilometers away there’s an ocean port, 30 km away is a hydroelectric power line, and the property is in an area that’s unpopulated with no forseeable social or environmental problems. Infrastructure seldom gets any better than this. And the startling thing about the project is it’s very, very large. We have mineralization over an area that measures three kilometers by four kilometers. And we’ve only tested it from zero down to a maximum of about 200 meters in depth and even there the deepest holes we’ve drilled we’re still in ore grade mineralization in about a third of the holes, so this thing is big. We’ve got 108 holes in it and we’ve just started on it, but it’s already become so big that Marifil is going to need a major partner to help us take it through fruition.
So again keeping with our business model, we’re going to farm this out. We’ve got about four major companies already signed confidentiality agreements on it. We had a partner Nova Gold, who had earned a 49% interest. But Nova Gold has elected not to spend any more money on the project because Nova Gold split off into two companies, Nova Copper and NovaGold. The new NovaGold will only work on its Donlin Creek gold, project in Alaska and NovaCopper will only work on their Ambler District copper deposits.
Since NovaGold will not proceed they will eventually be diluted out of the project and/or be bought out. We might just buy them out on it if the price is reasonable.
More recently, on south end of the property we found kind of a different zone which is strictly gold, no lead, zinc on this one. And in this gold area it’s all oxidized from zero down to about 35 or 40 meters depth and looks like or maybe at least 150,000 ounces there that’s very amenable to heap leaching. Preliminary bottle roll test show more than 90% recovery of gold. And so that’s San Roque; again it’s a giant lead, zinc, gold, silver, indium property and we think it could be one of the biggest lead-zinc mines in Argentina for years to come as well as a major gold and silver producer.
Juan Costello: And how’s the infrastructure there in place?
John Hite: Again as I mentioned, it’s just fantastic you know. Railroads, paved highways, flat, water is nearby and labor is nearby. No foreseeable environmental impediments to this project whatsoever.
Juan Costello: Good. And so what are some of the trends that you’re seeing in the sector and how well are you positioning the company to be a unique player in the market?
John Hite: Well, first of all as I said, we’ve got three legs under our stool. We’ve got non-metallic and fertilizer minerals as one leg, we’ve got base metals as a second leg and gold and silver, precious metals – gold, silver and indium and also platinum as our precious metals leg. So if the economy sinks, people will be buying gold and silver, and we’ve got high-grade gold-silver projects. If world economies grow, then people are going to need the base metals, lead, zinc, copper, indium and also of course people have to eat every single day and our fertilizer projects are going to fill that niche.
Juan Costello: Well, good answer. And perhaps you could walk us through your background and experience John and talk a little bit about the management team.
John Hite: Okay, I’d be happy to. I’m a professional geologist. I graduated from the Colorado school of mines with a professional degree in Geology and I have a Masters in geology from the University of Arizona. I worked throughout my career for major companies such as McIntyre Porcupine Mines in Canada, Homestake Mining Company and Cyprus Mining Company. I went on my own in 1978 and in 1987, I discovered the Vancouver Stock Exchange and I have been running junior companies from Vancouver Stock Exchange now the Toronto Venture exchange ever since. And during the course of my career, I found at least five or six major gold deposits. Also my partner Dick Walters as I mentioned is also a professional geologist and he graduated from Washington State University and spent long period of his career working for St. Joe Minerals and has worldwide gold experience. He founded Yamana, and finally Dick has also been responsible for number of deposits.
Pedro Vera is our exploration manager in Argentina; Pedro was, formally exploration manager of Patagonia for Barrick Gold. Daniel Buffone is President of Marifil SA and Daniel Buffone is a geologist who was trained by Dick under Yamana. We are small and lean; we generally operate this from within our houses but we do have a small office in Mendoza and a small office for corporate affairs up in Vancouver.
Juan Costello: Good and what are some the goals and milestones that you guys are hoping to accomplish over the next year?
John Hite: Okay that’s a good question Juan. First goal were hope to accomplish perhaps this month is we have a porphyry copper project in Salta Province that looks very exciting. We’ve put some news releases out on it. We’ve had some trenches in the area with big intervals of very high-grade copper. And one of the five largest copper producers in the world is signing an agreement with us. We hope to be able to announce that over the next 30 days. The second thing we are doing is working on a spin out of our industrial minerals, mostly fertilizer minerals. We’ve got one or two companies who are interested in this and we think that’s one of the things we hope to accomplish within the next six months.
Our goal is to find a joint venture partner within the next 90 days for our San Roque project so we can start work on that one once more. In addition, we have at least 15 other projects, we have a porphyry copper project and several epithermal gold projects which look very promising. I’m looking for partners for those. We have a high grade copper, silver project called Toruel; it’s a vein situation but I’m confident this year we will find a partner for that. And we have a NI 43-101 resource on at our Las Aguilas nickel project and again we have an Australian Group who wants to sign a CA and start working on that one.
So I’m hopeful that over the next few months we will be able to change these confidentiality agreements into operating agreements and move forward. For example two years ago Marifil took in over a million dollars in property payments. And then last year was named 2010 and 2011 where, you know 10, 11 and 12 were kind of disasters for the mining business and then we lost some of our joint venture partners but now that business is picking up we expect to recreate our successes and move forward. At the end of the day what we are really doing is moving forward is to make Marifil a hybrid royalty company if you will, whereby we will have royalties coming in from net smelter royalties from some properties and in other properties we will maintain a significant property interest either a working interest or carried interest.
Juan Costello: Certainly and as far as investors in the financial community are concerned John, do you believe that the MFM story and your message and outsider are completely understood and appreciated by them and they have not already wish investor better understood about the company.
John Hite: Well I think two things have happened here recently. Number one is this week this past week we completed a one million dollars private placement with Sprott Securities and Rick Rule and I think that over the coming months here Rick Rule will start mentioning our name at investor meetings, the fact that we have a tie end with Rick Rule and Sprott Securities is going to give great comfort to a lot of share holders. It’s going to increase our exposure and I think that throughout 2012 I’m highly confident here that our share price which is right now hit a low of five cents will really, really appreciate particularly when our stories better know about the large and high quality resources that we do control.
Juan Costello: Well great and so once again joining us today is John Hite president for Marifil Mines Limited. The company trades on a TSX venture ticker symbol is MFM currently trading at five cents a share and before we conclude here John to briefly recap some of your keys points, why do you believe investors should consider the company as a good investment opportunity today?
John Hite: Three things. Number one Rick Rule and Sprott have invested a million dollars in it, which is a vote of confidence. Number two the stock price is low so investor downside is almost nil, when you buy a 5 cent stock there is very little downside. And number three we have large high-grade projects that are generating right now a lot of interest in the industry.
Juan Costello: Well we certainly look forward to continue to track the company’s growth and report on your upcoming progress and we’d like to thank you for taking the time to join us today John and update our investor audience on Marifil.
John Hite: Thank you Juan, it’s my pleasure.