It is my pleasure to share the transcript of an interview with Mr. Tim Warman, CEO of Fiore Exploration Group. Our extensive conversation followed along with the presentation deck available here, but should provide you with a lot of good information to help you wrap your head around the exciting developments happening at the company. Enjoy!

>>

T: The elevator pitch for Fiore is that it is a company that is well-financed to take advantage of the complete absence of exploration going on in Latin America right now. If you look at exploration budgets, I think they are down by 60% over the last five years. There is virtually nobody doing exploration. Even the majors are not doing exploration, except around their immediate projects. There are a ton of good projects out there that have essentially been orphaned.

P: And if I could interrupt you there, just to ask about the comparison with Arena Minerals. Saying that you are well-financed, and are focusing on one of many projects that Arena had before. If I can reflect back what I'm hearing that you are not only well financed, but I would say the word "focused".

T: Yes, we are certainly very focused. Not just on our Augusta Victoria project, but on further acquisitions. Arena is a major shareholder of Fiore, so they’re very interested in our success, and they’ve been very helpful in making introductions to SQM and ensuring continuity of that very important relationship. Arena is more are copper-focused, whereas we are sticking strictly to the precious metal space, which is really the space that I know quite well.

P: A follow-on question here, in the deck it seems like you have a clear vision of focusing on Latin America. Would you say that you still are looking at properties?

T: Absolutely. Pampas El Peñon is a great project, but nobody survives very long as a one project company. There are exceptions, sure, but it is tough. Particularly at the greenfield stage, before you have made a substantial discovery. 

T: Some of the companies that I have worked with in the past are companies like Aurelian. You could argue that Aurelian is a one-project company, but that is after working through a 100,000-hectare concession package with numerous showings and targets on it. We hit the big one. Once you find something really substantial, then it's probably not such a bad thing to be a one-target company. But at this stage we need to have multiple projects to work on. And I think it broadens your chances of success.

P: Thank you very much.

T: We are very acquisitive right now. Myself and my team have been spending the last three months since we got going with Fiore travelling all over Latin America looking at projects.

T: Would you like to go back to the deck or carry on with questions here?

P: Yes, lets get back to the deck after that first tangent there. Thank you. I promise, many more questions to come! 

T: We are a well-qualified company for this. We have the capital markets and fundraising power of Fiore Management Services. We've got myself and my exploration team, Vern Arseneau, are very familiar with Latin America. We've all worked there for several years. We understand the culture and how to get things done there. And, honestly, we've seen enough projects down there that we recognize when something is an old dog that has been tarted up and trotted out for the market for the fifth time. We know to avoid those ones. And we recognize ones that are real gems, where you think "Wow, I can't believe that's available." Or "That's something that nobody has ever looked at before.".

T: So, the experience is there. Vern Arseneau, our VP X, has lived in Latin America for twenty years, but it is still not the same as being from there. The guys at Arena, to their credit, were able to persevere and negotiate this very large land package with SQM. And a lot of other companies had failed in trying to do deals with them, but they succeeded and that's how we ended up with our Pampas El Peñon project.

P: If I can interrupt again. I appreciate the colour there. A comment you made regarding finding the real gems. I looked into the technical report there and noticed the history of Augusta Victoria as non-metallic in the ancient history, really. Then the single round of exploration done by SQM that was relatively unsuccessful. I wonder if there is anything you could speak to in regards to why or what it was about it that made you say 'despite the prior apparent failure in that exploration campaign, there is still something there that we want to look at'.

T: All companies have their areas of expertise. SQM is a fertilizer and chemicals company. They mine caliche for nitrates and lithium brines for lithium. They are not really gold or base metal explorers at all. They are getting better, they've hired some new younger people there. But at the time that they explored Pampas El Peñon they took a drill rig that was aimed at exploring for caliche, which meant that they could only drill shallow holes. Like 50M or 60M holes, which is not what you need to do to find these epithermal veins. A typical Yamana exploration hole, right next door, at the El Peñon Mine, may be 500M or 600M, maybe 350M at the minimum. Drilling 50M holes on a rig designed for looking for caliche is a good try, but not the right technique. And that's fine, it's not a criticism of SQM, it's just wasn’t their area of expertise.

P: My impression was also that the geochemical markers that you are finding or looking for in this area are difficult, at least to me.

T: The classic model for these low-sulphidation epithermal veins is that they are often associated with arsenic and antimony anomalies. We've seen that in lots of other deposits, including Fruta del Norte in Ecuador. The real key is being to able recognize where those patterns are, how they relate to the structure in the area, how they relate to geology in the area, and then how they relate to the geophysics. We went in and did a geophysical survey a month ago that is to guide us in terms of the larger-scale structure. Being able to put this together just requires a team with the experience in this kind of deposit before.

P: Great, thanks for bringing us back on topic with the deck here too.

T: The other thing that is useful here -- the fact that no-one is doing exploration doesn’t just mean that there are a lot of good properties that are available, it means that costs have come down tremendously. Our all-in contractor costs for RC drilling are under one hundred dollars per meter. You compare that with five, six years ago and people were paying, in some cases, over five hundred dollars per meter. It's really come around. And not just contractors, but the availability of rigs and the availability of geologists, good geologists. You're not having to take whoever you can get, you can get really experienced people. It all makes exploration much more efficient, as well.

T: I mentioned that we are well-cashed up, the most recent numbers we’ve released in our presentation are $13.5 million.

P: To clarify, is that after the recent financing?

T: Yes, it is.

T: If you look at what our expenditure commitment is to earn in to 100% of Pampas El Peñon, it's $1.8M USD worth of work and one more payment of a half million dollars. Then the project is ours. We are more than well-financed to carry that out. If we start getting some success at the drilling, as we expect to, then we will be able to expand the drilling program without going back to the market.

T: We can make deals for other projects, again, without having to go back to the market. What little competition we have for projects right in Latin America right now, they quite often have to be offering 'well, we will give you this deal, but it will be contingent on us going back to Vancouver and Toronto to raise a couple million bucks' whereas we just say 'sign us up and we can write you a check tomorrow.'

T: I think we are really well positioned in that sense. There you go, that's page one.

P: A round of applause for you. Good work so far. Thank you!

T: I told you a bit about myself. I'm on the Board of Continental Gold, another world-class deposit right now. I was President of Dalradian, one of the best un-developed projects outside of Latin America at the moment. I was also CEO of another company in Argentina called Malbex, which was a great technical success. We discovered what ended up being Barrick's Alturas deposit, except that we had the ground on the Argentinian side and they had the ground on the Chilean side. Unfortunately, there was a lot more gold on Barrick's ground than there was on our adjacent ground. A technical success, but you can't win them all.

T: We've got guys like Paul Matysek advising us. Paul has obviously had a very successful career buying and selling at the right time. He is a key asset for us.

T: Fiore, you don't really need to say a lot about them, about Frank and Gord, and their ability to fund success. 

T: And then our board. Four very experienced people who bring a lot of different aspects from the hands-on CEO and geologist like Peter Tallman, the lawyer Robert Pirooz, the corporate finance expert Geir Liland, and the markets expertise with Harry Pokrandt. They've been great.   

T: Next slide, investor information. We are sitting somewhere around a fifty million market cap, give or take. The share price is floating around sixty cents the last few days. We have 98 million shares outstanding, fully diluted 108 million. We don’t have a big disconnect between the outstanding and fully diluted. Eight million options outstanding.

T: Right now the market is waiting on news and that's what we're hoping to give them in the next few weeks as we start the drilling program.

P: I hear you saying 'no warrants', any comments on historical cost base of various insiders given the history of the company with the recent reboot.

T: The shell that we took over, Rouge, was really just that. It was a shell that Frank, Gord, and Bryan, cleaned up and changed the name to Fiore when we brought the new projects in. There was an initial round of about five million at twenty-six cents and another round that came to eleven million at fifty-five cents. Those are the levels that people have put money into the company at. It is running a bit above the last issue price.

 T: In terms of the property itself, you would be hard-pressed to find a better location. Antofagasta is the main mining center in Chile. You drive into that town and every second truck is a mine truck. There are mine contractors everywhere, mining contractor offices. You know, it's like Timmins but on the waterfront. Multiple flights a day in there from Santiago. It's very easy to get to. You can actually fly there directly from Lima, as well.  

T: And then a network of paved roads that radiate out into the Atacama desert. We are almost walking distance from a paved highway. It's a highway that heads out into places like La Escondida and the El Peñon mine. There are power lines, a railway, and a desalinization pipeline right beside the highway. You can drive from the hotel in Antofagasta to the project. I think it took us about an hour and forty minutes when we were out there last week.

T: We've got an operating mine right next door. I can literally walk to the edge of the property boundary and just about look down into the pit of the Pampas Augusta Victoria zone at Yamana's El Peñon mine. They have three cornerstone mines. The Malartic mine in Quebec, the Chapada mine in Brazil, and the El Peñon are the three big mines for Yamana.

P: If I could ask about that, the El Peñon mine is a large complex. It stretches across ten kilometers or more?

T: Oh, more. There are three main deposits at El Peñon. There is the central El Peñon deposit, which has the mill and tailings complex and everything. Off to the west, they have one called Minera Florida. That is an underground mine. Again, it had a small open pit at the beginning, but now they are going underground there. They truck that ore over to the El Peñon mill complex. Further to the north they have the Pampas Augusta Victoria deposit, which is the most recent discovery. We are immediately adjacent to that. Again, they put in a small open pit. I think that open pit is pretty much done now and they are mining from underground and trucking the ore by road, about 30 kilometers, to the El Peñon mill.

P: If I could also ask about the fact that they may have exhausted the open pit. At first blush, that seems a bit concerning to me. But as I think more about it, I realize that we are dealing with deeper epithermal deposit so moving underground makes sense. That’s really where we should expect the mine to produce it's richest ore over time. Any comment on having exhausted the open pit there?

T: These are vein deposits. They are quite steeply dipping vein deposits. So, economically, you can only go so far with an open pit mine. You really need to get underground on them. Yamana's strategy has been, I think the mine has been operating almost twenty years, they start off taking the near surface stuff in an open pit and then push that down as far as they can economically, which is not very far. And they do that so that they can mine while they are developing to go underground. Some early production.

P: A rolling start, maybe?

T: You can't generally mine narrow vein stuff from an open pit. At least not very deeply.

P: Thanks, I was a little confused that there was open pit activity there at all.

T: They are really just starter pits to get at the shallow stuff.

P: Any comments on the grade of the ore that they are moving 30KM there?

T: I don’t have that at my fingertips, but it is high enough that they are able to truck it 30KM to the mill. I don’t think Yamana reports the grade separately from the three zones.

P: Yes, I can understand that would be a bit obscure and hard to get information.

P: We may get into it later, but there is also a strategic question that occurred to me regarding the potential for you to act as a feeder for Yamana. Just what the relationship might be between Yamana's Pampa Augusta and your operation.

T: Sure, we can touch on that now.  

T: Look, there's no secret that Yamana had been very interested in these concessions. It obviously makes sense -- they are right adjacent to their own concessions, right adjacent to their own open pit -- but, for whatever reason, they were not able to come to an agreement with SQM and Arena was. We've been talking to Yamana. They were interested in introducing themselves when Fiore took over. I know some of the guys from my there from my days at Aurelian, so that relationship was already there. We will keep chatting with them.

T: Unless we find something really substantial here, it probably doesn’t make sense to build a second mine adjacent to the existing one. Without trying to be too cute about it: the nice thing is that, as a junior explorer, you never want to have a discovery without an obvious buyer. And we have got an obvious buyer.

P: (laughs).  

T: Our relationship with Yamana is fine, it is quite cordial.

T: You can see the deal terms that we did to get the project, earning 100% interest. We issued about nine and half million shares to Arena, about five point three to SQM. Both those companies are still significant shareholders of Fiore. Seven-hundred and fifty thousand in cash, I think there is still five-hundred thousand left to be paid at the end of the option period. And then a $1.83M USD exploration expenditure. We will hit those targets fairly easily. That's by July of next year. In fact, I expect we will probably spend the money on the drilling program well before that.

T: Assuming we find something, they are pretty good option terms.

P: Agreed. Do you have to shut down for any period of the year?

T: No, it's low elevation. I'm told that in the coldest days of the wintertime, you might get a half-centimeter dusting of snow, but that's really it. It's dry desert country.

P: That seems to be a big deal as I understand that some others in the area are at much higher elevation, if that's correct.

T: I've never driven out all the way to Escondida. It's one of those 'keep meaning to do it' projects, they're about thirty or forty kilometers to the east of us. They are definitely higher up than we are. Really, you need to start getting above 3,500M before you start running into any seasonality. We're nowhere near that, I think we are down around 1,800M.

T: That’s the big picture, locally.  


T: El Peñon produce around a quarter-million ounces of gold a year. About 7.7 million ounces of silver. The mill is designed for five-thousand tonnes per day, but I read somewhere else that it is designed for forty-two hundred tonnes. Anyway, it's not running at capacity. The last few quarters they’ve been able to produce an equivalent of about thirty-five hundred tonnes, so they are running somewhere between 70-80% of capacity. That is obviously inefficient and they are quite keen to find new sources of ore for that mine.

P: Would you say that is the key driving force for why they are operating under capacity?

T: The key, I think, is probably that they've had some mixed exploration success within their own property. Everybody has been pressured to cut costs and the first thing that gets cut is exploration. That might just be a symptom of trying to cut costs by cutting exploration, but I don’t know. I'm not inside Yamana.

P: Well, we can leave it to me to speculate as to why they may be operating under capacity.

T: The geology, really the things that drive the mineralization in this area, appear to be the proximity to this big regional fault called the Dominator fault. You can see it as the dashed line that cuts through the map on page 9. Movement along that fault, particularly where you've got a big bend in the fault like that, that movement creates the open space for the fluids and intrusions that are driving the mineralization in these veins to move into the rocks. It really breaks up the rock and creates space. That’s a key driver for any mineralized system, you’ve got to create space for those fluids and mineralization to come in. We're very close to that.

T: The fault actually runs through the western part of our concessions, depending on how it is mapped. It is a big regional structure. At El Peñon and Augusta Victoria, the local association is with those rhyolite domes. Those domes come up and intrude the older, flat-lying, boring volcanic rocks that underlay most of the area. When you get these rhyolite domes coming up, these are basically little blobs of magma coming up into the older volcanic rocks, you often get a contrast in hardness and strength between these younger domes and the older volcanic rocks. When you get movement on the faults you've got hard rock and soft rock, and they tend break along the contact of the two. That’s where you get these veins in place, along the margins of these rhyolite domes.

T: When you're looking for mineralization, particularly gold mineralization in this area, you're looking for proximity to the Dominator fault. Then you're looking for these rhyolite domes. Then, from a geochemical perspective, you're looking for these arsenic-antimony anomalies that give you a hint there is something going on under the surface. Quite often these veins don’t come to the surface.

T: There's not a ton of outcrop in this area. If you go on our northern concession area, there is not any outcrop at all. It's all covered by gravel and younger sediments. On the western property, we do have some outcrop but a lot of it is covered. One of the reasons we want to use geophysics in this area is to help guide us. We can put drill targets in on the area where we have outcrop, but then we need something to guide us as we start to step off that. That's really what we're doing here.

P: Great, thank you. What is it that is the type of material that is outcropping on the western zone there?

T: You see quite a few outcrops of the underlying volcanic rocks. They're basically andesite, boring rocks, flat-lying, not particularly faulted or folded or anything spectacular. And then, in a few cases you get outcrop of these rhyolite domes actually sticking up out of the sediments where they have intruded the younger volcanic rocks. You'll see little hills of rhyolite sticking up. We collect rock samples all over them and along side of them. Sometimes we’re sampling float, or loose rock on the surface. Other times we actually bang it off the outcrop. That’s where we are able to identify these arsenic-antimony anomalies. 

T: If you look at the map on page 10, there are some yellow coloured rocks and those are the rhyolite domes. There is one on the south-east part of the western concession and there are a few others dotted around. They are basically in the south-eastern corner and over in the west-central part. Associated with those, we have some high arsenic-antimony anomalies.

P: When I was digging through the technical report, I saw a picture of a trench with some discoloration in the sand. A clear spot. And I wonder if that is something like what you are describing here.

T: The guys at SQM did dig some trenches there, but I am not entirely convinced that all the trenches went down to bedrock. They may not be seeing the underlying rock there. We're not using them all that much to guide us. We are using our own work that we've done there. 

T: If you look at slide 11, the photograph on the left hand side with Vern holding the red-coloured rock. That's something that really caught our interest. That's a jasperoid-breccia, a very iron-rich, silica-rich breccia. The clasts of pieces within that breccia are epithermal vein-quartz. Again, these just scream with antimony and arsenic -- a really attractive target.

T: From our point of view, we closed the deal just a little over two months ago. We've carried out a geophysical survey over both concession areas. We've gone through all the data and reviewed it and come up with our drill plan. Very soon we are going to have a drill turning on the project. The plan is to have about 8,000M budgeted in the first phase of the drilling program. If we get the success that we are hoping for and expecting, then we have a lot of capacity to expand that program. Bring in other rigs, drill more meters.

T: We are going to focus on the western area because we have physical outcrop there, but if we have some success there then we may try some drill holes in the northern target as well.

T: That's really it. We're doing a lot of project review right now. I've lost count now, but we've seen well over twenty or thirty projects. Some of which we have visited, others we have looked at on paper and decided are not going to work.

T: The plan is to add at least one new asset in the fourth quarter, before year end. Ideally, we would like to add more than that, but will commit to having at least one. We're going to get drilling on Pampas El Peñon.  

T: We've got a lot of good relationships in Latin America. Both my and Vern's experience down there. Being VP Corporate Development at Aurelian, I got to know the corp-dev and exploration people at virtually all the majors. A few of them have changed, but I still know most of them, can call up and they will actually take my phone call. It gives us an ability to get projects that are non-core or too early stage for them.

T: We've got a great team with a successful track record. First-mover advantage sounds a bit cheesy, but we're really one of a few people even looking down there.

T: We've got a great starter project. You can't ask for more than a drill-ready project right next to an operating mine. And we're well-financed and well-positioned to continue doing what we're doing. We think we will be successful at it.

P: Indeed. Thank you very much, Tim.

T: No problem. If you want to dive into questions, then feel free.

P: Truth is, I've hit you with most of the ones I had as we went. Let me go back and see -- no, I think I have asked most of them. But if I could ask you to say a few more words about that iron-rich rock.

T: Sure, these jasperoid breccia are often associated with gold and precious metal occurrences. The fact that this thing outcrops right on the property and has elevated levels of arsenic and antimony, it just screams to be drilled.

T: One of the interesting things is that, when I first walked over to that outcrop, there was a drill pad on it. I thought "Oh, rats, it's already been drilled." And I started looking around to see where the drill collar was. Typically, they leave a big bit of tubing in the hole so you can find the collar again. I was looking around and I couldn’t find one. And I asked Vern, "You know, where's the collar on this? Did they cover it up?" And he said "No, they put the pad in but they never drilled it."

P: Oh, wow. So, you went and drilled that yourself?

T: Well, we will.

P: Great! Was this a rock chip sample then, in the picture?

T: Yes, you can see it outcropping all over surface.

T: In fact, it's kind of neat. If you go back to slide 10. You can see the red colour when it's nice and fresh -- when you break it open. But when it weathers in the desert, you get this desert varnish on it. The picture on the right there, that's the same rock.

P: Oh, no! (laughs)

T: You get this kind of brown varnish on it. There's a better picture on it in slide 13. If you're a geologist and you've got your eye out, then you can see it fairly easily, but it doesn’t scream out like the red stuff does.

T: This is the stuff that any geologist would say "I've got to get a drill hole under that."

P: Any comment where on the concession area that was located?

T: Oh, yeah. If you go back to slide 10 and look again at the western slide there, you'll see a label that says "PEP West Exploration Target". There are a bunch of circles there and the bright red ones are the big, screaming arsenic soil samples. That's right in where the breccia is. Right where those two big red dots are there.

P: Sitting on top of a vein structure.

T: Well, we hope so.

T: It's exploration ground. You've got to put the drill into it to see what's there. But we like what we see so far.

P: There is mention of five drill targets. I guess that is obviously one of them.

T: Two of the drill targets are outcropping. The rhyolite dome and this breccia area. And then the other three are strictly off geophysics. They are things that look like the targets we have at surface, geophysically. But, because they are undercover, all we really have to go on there is the geophysics. If we hit on the outcropping ones, then we will certainly step over and stick a hole or two into the ones that don’t outcrop.

P: Wonderful, thanks very much for playing along here. Thanks for all the information. I feel like I don’t need to use Rick's 8 Questions, to tell you the truth. I've got lots of good content here. Using the deck will give me a lot of picture excerpts to help make the article engaging on the site.  

P: Thanks again for participating in this interview, Tim. I hope it can help educate some people out there about the great things that you are up to. All the best for you and the company.

T: You’re welcome. Thank you as well, Peter. Goodbye.