Playfair Mining is an exploration company currently focused on a greenfield project in Ireland. They raised a significant amount of new investment earlier this year to fund exploration and reported the first set of results from the project at the start of December, 2016. Some called the results a failure, but my sense from a prior conversation with Mr. Don Moore, CEO, was that the results were in line with expectations. I guess it depends on your expectations.
To help get to the bottom of things, I got in touch with Mr. Moore again and prepared the following transcript from our conversation. In short, I think Don put it best when he said:
The market, generally, says "well, they don't have enough to tie it together". That's true, but the point they're missing is that we've confirmed the presence of a structure that runs for 4.5KM, has got gold in it, and no-one else knows anything about. Any individual that says they can judge what's in that structure by what we've done so far is kidding themselves.
Read on to find the full transcript from our conversation below!
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P: Nice to talk with you again, Don. Since we talked last, you have put out some news that seems to count as a failure in some people’s opinion. I can see where they’re coming from, but would very much like to hear what you have to say about it. Please tell me.
D: Well, we put out that release and it was a very general release as we don't have anything of economic consequence in the drilling, per se. What we do have is confirmation of what was - up until now - just a concept.
D: The concept is that the gold-bearing float we found out in the hills in Ireland came from a structure that was associated with a geophysical expression that we saw. These results reported the first set of drill holes ever put into the ground down there and the results confirmed that, yes, the geophysical expression is the structure and the structure is really well prepared for gold mineralization. We had gold in every hole, but not in any kind of fashion that would cause one to think it has any economic consequence quite yet.
D: We are now convinced that the structure is the source of all the float that we see scattered about over 1.5KM at surface. We are also convinced that this structure continues for a minimum of 4.5KM along strike. We use a graphite horizon to track it, which shows up really nicely on the geophysics. It’s quite a large structure to be poking at and we’ve just begun.
D: The first holes were drilled into the eastern part of the structure, where we found the float. We started there because we believe the float came off the structure. Now, these are the first holes to have ever been drilled here and they only cover a small part of the 1.5KM area where the float was found, let alone the rest of the 4.5KM! Until we put more fences of holes across the structure, no-one really knows where the best part is going to be. It's going to take some work, some interpretation, and some luck to find out just how much of this structure might be interesting.
D: These structures can be really prolific, but it's really difficult to narrow down the parts of the structure that are most significant. We already know it's 4.5KM long and having something of that size -- the possibilities are endless as to what might be there. At this early stage, it's impossible to tell you whether it' s going to be good or bad at the end of the day, but I can tell you with certainty that Playfair is going to take a good whack at this thing over the next bunch of years.
D: Now that this structure has been discovered and recognized as a gold bearing structure, there is going to be a lot of work done on it in the future. It's our hope that we're the lucky guys who poke the discovery of something significant on it because, once you have one significant spot, it's going to go on for a long time. This is a mesothermal or orogenic system, so it's going to go to great depths.
D: I spent a good deal part of my life in Red Lake, where the big mines are in structurally controlled environments, and I know that you can drill through them in a lot of different places and get nothing. The structure is here and we know we've got gold in every single hole. That's nothing short of amazing for where we started from.
D: The market, generally, says "well, they don't have enough to tie it together". That's true, but the point they're missing is that we've confirmed the presence of a structure that runs for 4.5KM, has got gold in it, and no-one else knows anything about. Any individual that says they can judge what's in that structure by what we've done so far is kidding themselves.
P: That was my interpretation of it as well. I was impressed to see all the holes coming with gold there, even if it was not sufficient to be economic.
D: Some of the rock looked so good, it was just prepared so well. It looked like a perfect home for the gold -- the fracturing, the silicone flooding, and the quartz staining. We were surprised because part of it didn't run anything!
D: The facts are that the structure is prepared and there is gold in this location. What happens when we go along it? Is the structure going to be equally prepared all the way along? Can't tell you. Is the alteration going to be important as we progress with the exploration? We would think so. Is the silica flooding important? Yes, we think it is, and that's why we are looking at the possibility of using something like IP to help us determine where the heavier sources of silica flooding are within the structure and where the sulphides may be more heavily concentrated. It's going to be confusing because of the graphite, but we have a handle on this stuff.
D: Basically, it's going to be a cat and mouse game with the drill. We're funded for at least another leg and we're fortunate for that. The gold market for the last 5 or 6 weeks has been a dull place to be --the only excitement has been on the downside. Looking into the New Year, I don't have any guesses for you on gold but it's still in that long-term bull market. It hasn't violated that long-term uptrend but, my lord, it's awfully close! Enough to make an old guy like me squeamish! The long-term is intact, but the pull-back is also intact. The pull-back that started in 2011 is still unbroken. We are still in that pullback stage. Is it going to break out of there and give us something good in the next year? I'm not prepared to guess, but in the meantime we're in between those two opposing lines - the long-term uptrend line and the interim downtrend line, which is now kind of a long-term downtrend line itself! It started back in 2011, so we're coming on 6 years!
D: For Cloonacool -- we're confident that the structure is there. Neil uses the word "proven" -- we've proven that the structure is there. And what it's going to be like along strike, we just have to drill holes. And with this size, Peter, we still have a chance to hit it large here but we're going to need that element of luck. Nothing will change that.
P: The thickness of the structure seemed impressive to me.
D: It's really a strong structure. It's well prepared -- it's brecciated, it's fractured, it's got silica flooding, it's got all the things we're looking for.
D: When these things are formed, there are a whole variety of things that happen. Part of it is the preparation of the structure and part is when the fluids coming are coming through relative to the presence of structure. If the fluids are there before the structure is there, and that's probably what happened with part of what we are looking at now. There are multiple pulses of these pregnant solutions coming into these structures over time. Any of these structures are the same, in that regard. Nothing happens in one fell swoop. It's all a series of events and sometimes the order of the events determines what part of the structure is going to be good and what is not.
D: I listened to a presentation when I was a young broker up in Kirkland Lake, a highly-respected geologist by the name of Len Cunningham, about the Upper Beaver deposit. It had been mined, at that time, for probably 30 years. It was a copper deposit with a gold credit. He made a really great presentation on how it all lined up. At the end of the presentation he said "And now that it's pretty well mined-out, we still can't tell you why it's here or how it got here." That's really stuck with me.
D: I know at Hemlo, which is one of the great discoveries in North America, the early guys were horsing around with a small deposit. The guys who had it at the beginning didn't have the benefit of the knowledge that we do now -- how important the structure is, how important the alteration is, what the different types of deposits are. They struggled through all those years trying to take a small deposit and make it bigger. Most of the time, the grades fell off as they drilled the thing off to the east towards this big dyke so they figured that was the end of it. Then, Dave Bell went to the other side of the dyke, put in 8 holes, and opened the whole thing up.
D: And here's another thing that stuck with me about those 8 holes at Hemlo: the top four holes, the 50-degree holes, all had anomalous gold and nothing else. If he had only drilled those holes, then history would have been different. But he drilled a 70-degree hole that hit 0.3 ounces or 0.4 ounces and that's what kicked off Hemlo. It's coming on 35 million ounces of gold that has been mined there. So, I've got this idea in my head that "anomalous gold means the fluid has been through and that there is gold going through somewhere down there".
D: I'm not a geologist, but the straightforward point of view is that the structure is there, it has been prepared well, and gold has gone through it at some points. At this stage, we know nothing else than it is a great place to look for gold.
P: Good for you! Keep up the good work.
D: Peter, we thought we hit the homerun when we saw all that preparation in that one part of the structure that we were looking at there. When it didn’t have gold of consequence in it, it was a let-down. But, really, we should be happier than anything because our concept has now been demonstrated to be valid. We've just got to keep drilling. We're going to concentrate on that 1.5KM of the structure that is proximal to the float and we'll go from there.
D: Keep in mind that we're talking about a 3-dimensional thing here. That structure goes to depth. I come from Red Lake and I lived in Kirkland Lake -- for whatever reason, a lot of these structures have juicy stuff at depth. I've always been inclined to want to go deep. We can't do that now, but our belief is that we can go up and down this thing with shallow holes to get a reasonable shot because the float came off that interface. The float didn’t drop from above, it came from the rock that we're looking at. We are satisfied that float came from this structure -- we looked into all the other options , like "did it come from 20 miles away with a glacier?" We were always pretty confident but now we're even more confident. We're close to the source of where it came from.
P: Well, that was a question for me -- what's up with the shallow holes? I hear you speaking to it now and what you said make sense.
D: It's just the fact that we know that float came from surface, so we don’t have to go digging deep to find out where it came from. That stuff came from up close. Once we get two or three sections across the structure, we will have a much better understanding. It's just too early to understand what we're dealing with here.
D: We're looking at IP as something that may help. We're not convinced it will, but it may. In the meantime, we've got the benefit of knowing that float came from there. It is the carrot that leads us on.
P: You mentioned cash earlier. Do you have enough for another round?
D: Yes, we have enough for another round -- we just don’t know how big yet. We will know that here in the next week or two. We definitely have enough to back and drill more. We don't have to go to the market to get more money before we go back. Thank goodness for that. It's the combination of the gold market and a lack of recognition between the difference between a grassroots exploration program like we're conducting and drilling off a deposit. We're trying to figure out where we should be even be looking for the deposit! There's very little to help us. We knew that geophysics was of no use at Curraghinallt, at all. They just had to drill. We knew that going in. With the peat and everything, the geochem is not really that helpful. We're dealing with a new environment. For this stage of the game, we're pleased.
D: We've been reminded -- don’t get too excited when the rocks talk, wait for the assayers to talk too!
P: I'm sorry to hear that you got let down there. That's tough.
D: Well, it's just life in the business. The thing is that we have this big structure to look at. I can't tell you if it's all going to be prepared that way. Nobody knows.
P: Nope.
D: Regardless of what all the soothsayers say, we've now got the structure to take a shot at.
P: Is that not the first set of holes you put into Cloonacool?
D: Yup, first in history. All of mankind's time, all the dinosaur time, and all the rest of it. These are the first holes.
P: Wow. Well, the results seemed like some kind of a success to me just based on that.
D: For where we're at, we're pleased. We're going to be a heck of a lot more pleased if we can nail 22 meters of something good!
P: Wouldn't that be nice! I appreciate talking with you about it here today.
D: I do thank you, Peter, for chasing me down. I've been negligient getting out there enough.
P: Nope, I don’t think you have to be out there all the time. If you have a few people who really know what's going on and are with you, then that's worth a lot more than a bunch of people who will trade out of the stock the next day.
D: John Kaiser put out note on Discovery Watch last week and Gwen wrote a nice little piece as well. I think Eric Coffin will likely write something, too. They've been really good at recognizing what we're doing.
D: We got spanked for not putting out a table because people said "if you don't put out a table then there's nothing good in the drilling". In a sense, that was correct -- there was no deposit coming out of the drilling -- but we just wanted to make the point that we've got the structure with the gold in it! Puts us in a pretty unique position as a little company with something this big and significant. Wish us luck, Peter!
P: Good luck, Don!
D: Stick with us for the next year or two and you never know what will come of it. Kerry Knowles had just gotten out of journalism school and his first assignment was to go out to the Holiday Inn in Toronto to meet with two guys that were coming down from Northern Ontario -- one of them was Dave Bell and the other was Don Moore. Don Moore had written a release about this company called Corona and we sat down with Kerry his first story on what became the evolution of Hemlo. He followed it for his whole career as a journalist. There's not many that turn out like that.
P: There's really not. Thanks very much, Don.
D: All the best for the new year, Peter. Goodbye.
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Playfair Mining is an exploration company currently focused on a greenfield project in Ireland. The company has 51M shares outstanding with no warrants and a market cap of approximately $3M. At August 31, 2016, the company had a cash balance of $107K with current liabilities of $148K. The company raised equity investment of $785K in July, 2016, and $500K in November 2016. It spent $850K on exploration, and kept $200K as contingency and $235K as working capital. You can find out more on the company’s website here.
