I had the best conversation on August 10th, 2017 -- you will have to read it to believe it.

For almost 2 hours, Mr. Allan Cramm and I discussed everything Anaconda Mining (TSXV:ANX). Mr. Cramm is currently the VP of Innovation and Development at Anaconda Mining, but was formerly the Vice President & General Manager of the Point Rousse Project. That project is nearing its 10th year of operation and Allan is still involved, but has recently been turned loose on some epic opportunities facing Anaconda.

My favourite project so far is "to develop, prototype and optimize a new technology to mine steeply-dipping narrow gold veins, that cannot be mined cost-effectively with existing technologies". The company received significant research funding for this project. It was announced June 21, 2017.

If you read this transcript, then I trust that you will come to see that the depth of access and quality of story at Anaconda are outstanding in the Canadian junior markets today.

Find more on Mr. Allan Cramm on the company's website here: http://anacondamining.com/about/team/

Peter Bell: Hello, this is Peter Bell and I'm here with Mr. Allan Cramm from Anaconda Mining. Allan, hello.

Allan Cramm: How are you doing, Peter?

Peter Bell: Wonderful, thanks. A real treat to be talking to you.

Allan Cramm: I'm looking forward to it, too. I've seen some of the interviews you've done with Dustin and they are great. Thanks for all your support of the company. This is the first time that we've actually talked and we have a lot to talk about. I am happy to share some of our achievements with you.

Peter Bell: And who better to do it than you? I was pleased to hear about you for the first time in news releases this year. The company announced that you received an award recently. Congratulations!

Allan Cramm: Thanks, Peter. Some of this really caught me off guard, I've got to say. I was humbled, to be honest, about the recognition I have received.

Peter Bell: Any idea what happened there? Was there any particular achievement on your side, or is it more a recognition of long-term service?

Allan Cramm: Well, I guess it was a recognition of my service and interest in this industry. I grew up in Baie Verte, which is a mining community. Unlike most of Newfoundland, which is predominately fishing and forestry, Baie Verte is a mining community. I'm the fourth generation in a mining family here and we may well have been miners before we came here.

Allan Cramm: My son and daughter are in the industry now, as well. They are the fifth generation. We've had quite a history in mining.

Peter Bell: Thank you, that is great to hear. I'm looking at Baie Verte on Google Maps here and I can actually see a dot for Anaconda Mining across the water there. I think that is a new dot from the last time I looked at this.

Allan Cramm: It may be, Peter. We've been very active at working to increase the profile of the company.

Allan Cramm: My father and grandfather and great grandfather actually worked in mines in the area. Have a look for a place called Betts Cove on the map -- about 50-60 kilometers from here. My great-grandfather worked there. My father & Grandfather at Tilt Cove, a large base metal mine on the other end of this geological belt.

Peter Bell: The regional geology here is just so interesting, and all the towns and everything. It's great to hear that Baie Verte is still alive and thriving.

Allan Cramm: Yes, it is quite interesting on many levels. To the geology, Baie Verte is located directly on a major geological structure that extends from Newfoundland to Carolina. It's part of the Appalachian trend.

Peter Bell: Yes, thank you. I have heard about this before and it is just fascinating. Even that you can see the Moho discontinuity at the Gros Morne National Park. Wow.

Allan Cramm: That's right, Peter.

Allan Cramm: Back in the mid '80s, there was an exploration boom triggered here by the recognition of the similarities between the geology of the Baie Verte peninsula and that of the Mother Lode Belt of California.

Peter Bell: Really?

Allan Cramm: It was a booming exploration period in the mid '80s to the mid '90s. There was 35 gold showings on the Baie Verte peninsula prior to the mid '80s and that grew to 150 within a few years of aggressive exploration.

Peter Bell: Really! I know that Anaconda owns some property on that peninsula. The Thor deposit at Viking was particularly interesting to me, if I recall that correctly. I've heard some stories there but certainly not enough of them. Now, you mentioned the California gold rush and the Mother Lode deposit. What a great comparison for Newfoundland. I had no idea that was a fair comparison.

Allan Cramm: Absolutely. I have seen some photos that demonstrate the relationship between the Mother Lode Belt of California and this area of Baie Verte. It's unbelievable. The geological similarities are quite striking. The only thing we don't have are the grapes.

Peter Bell: Ha! Thank you, Allan. We will have to look into growing some grapes in Newfoundland. I've always wondered about integrating some food production into an industrial site -- just imagine a hot house at the mine site. I am looking at the Mother Lode deposit on Wikipedia now and I see mention of the crystalline gold structures. Is that particular feature seen at Baie Verte. I wonder what other similarities there may be.

Allan Cramm: It is a combination of things. The crystalline structure you mentioned is one comparison to the Baie Verte area, but there are other similar features. The geological structures here are very evident and the relationships at that scale do certainly have similarities with gold deposits in the Baie Verte gold occurrences.

Peter Bell: OK. If you can get a copy of that old diagram and a geologist who can walk us through it all, then I'd be keen to hear about it.

My first introduction to Anaconda came about in November 2016, when I met Mr. Dustin Angelo at a conference in Vancouver. He is the CEO of the company and has been for many years now. I think he is doing a great job. When I met Dustin, the company didn't have a booth at the conference but he was there. He was very discreet, but I made an introduction to him through Mr. Don Moore. Don runs a public company that owns a property on the Baie Verte peninsula -- Grey River, I believe. Anyway, I was very pleased to meet Dustin specifically because he didn't have a booth. I like to find stories that are lesser known -- before they are headline news amongst the speculators in this junior mining niche.

And I would just point out that contrast. Anaconda is not making headlines amongst the newsletter writers, but it is making headline news here in regional newspapers and national news. I believe your research project certainly deserved some national attention, whether it got it or not. I imagine that there will be some international news coverage coming for Anaconda as you continue to execute very well on an ambitious business plan.

Allan Cramm: We're pretty excited about a number of the things we're working on. A lot of the initiatives are certainly not traditional.

One of significant development that we became involved with in the last year was the export of waste rock. This was just an incredible opportunity for us and it has worked so well. It has reduced our costs. It has created around 50 positions in our area. And it is environmentally friendly! In terms of today's interest and dedication to the environment, that goes a long way to help you survive over the long-term as a mining company in Canada.

Peter Bell: 50 jobs is a big deal for a town like Baie Verte. The population there is approximately 1,500 people. It could potentially have a very substantial positive impact.

Allan Cramm: Absolutely. Our workforce on the site here has increased by nearly 60%.

Peter Bell: Wow. What a growth rate. And that's without incurring additional cap-ex. You've actually reduced op-ex and grown your workforce at the same time. That's pretty neat.

Peter Bell: When we were just passing the hour mark in my first interview with Dustin, and I flipped through the presentation deck a bit and noticed a slide saying that there were 47 prospective target areas on the Point Rousse project alone. At the time, I was taken aback. We had talked about things for an hour and I realized I didn't hardly know anything about the potential there! And to hear you briefly mention what happened at the Baie Verte Peninsula in the 1980s with 150 prospective targets being identified. It's stunning.

Now, it's good to have 47 targets but you have to prioritize. Anything you could tell me briefly about Point Rousse, beyond the waste rock stuff there, is the exploration plans?

Allan Cramm: Prior to the mid '80s, there were very few gold occurrences at Point Rousse or this region. Subsequent to that, Point Rousse contributed a significant percentage of the new 125 gold showings. Several of these have been mined, as we have done at Pine Cove. As you know, we're moving through mining Pine Cove right now. It was discovered back in the mid '80s, sat idle for 25 years, and is now a very active producer.

One of the things that makes it difficult for the industry to recognize the potential in small areas like this part of Newfoundland is that there are not many active mines. This leads to the perception that there are probably few deposits. We are working to change that Point Rousse in operation with Pine Cove celebrating its ninth birthday.

We learn a tremendous amount of information related to the geology as we mine the Pine Cove pit. In terms of our known resource at this time, the deposit extends down about 170 meters below the surface. And most of the deposits in this area have only been drill tested down to about 300 meters. Compare both those numbers with the depth of mines elsewhere. I visited several gold mines in northern Ontario recently, specifically the Timmins area. They mine down to 1,500 meters below surface.

Peter Bell: Wow.

Allan Cramm: We're only just looking at the surface in our projects. We do not know what could be happening below our current operations. There were 150 gold showings on this peninsula, particularly in this area. They have the potential to contribute to a major understanding of the gold -- the origin of the gold in this region.

Peter Bell: I look forward to the day when you grab the world's attention with all of that, Allan. And the potential for exploration drilling from the bottom of the pit at Pine Cove is so exciting. I can imagine how you can drill test immediately below the pit. And all the local targets, as well. Very interesting.

Allan Cramm: Yeah. I look at Pine Cove pit right now as a big-screen TV. We have four major screens that are several hundred meters squared. We see 160-200 meters into the earth as we mine it. We get to understand how the geology is related here. We see features in the mine, every day, that are unexpected. It helps the geology group understand how everything is working here -- how did the gold appear here? How does it change over space? It's really helping us to identify new targets and understand what we could encounter there.

The prolific mining areas in Newfoundland, Canada, started with a single deposit. Every single one I can think of started with a single deposit and grew to multiple deposits, multiple mines. And California is no different. Even Timmins started with one at some point. There are currently 8-10 mines operating in the Timmins area, I believe.

We made a great new discovery at Argyle and we're continuing to understand better what the geology is like here.

Peter Bell: This analogy of looking at the side of the pit as a widescreen TV, what an interesting idea. It makes perfect sense. I have even created animations of technical graphics in my research. And I have seen animations of the limit order book from Nanex LLC that are pretty interesting.

To hear that you're seeing new things every day is great. I wonder if you can record some video of the wall as you mine it. I imagine that you could analyze the video using software that identifies and calculates statistics on variations in the wall. Digitizing some of the info regarding what you are seeing in the large-screen TV that is the pit wall.

And you could even post some of those videos of the wall on YouTube. Who knows what someone may be able to tell you about the geology based on a sufficiently rich set of images of the pit wall as it is mined. That's just great, Allan. Thank you.

Allan Cramm: Well, you're welcome Peter. Thank you, too, for all the ideas.

Our understanding of the geology of this pit started with the exploration drill holes. We actually drilled a lot of BQ diameter core, which is a little smaller than what is conventionally used for drill core these days.

Peter Bell: Yes.

Allan Cramm: We have a mill building here. It's 50 meters long. I use it to help people understand the scale of the challenge of exploration drilling. If you stand in the middle of the mill building and hold a can of soda out in front of you, then that is about the size of a core sample. That's the scale of what we had to use to assemble an understanding of the Pine Cove pit. And now that we have mined it, we understand it much better.

Peter Bell: Just one Coke can, eh?

Allan Cramm: Yes.

Peter Bell: You mentioned 50 meters -- how does that compare to the initial size of your wall at the Pine Cove pit?

Allan Cramm: Our pit is several hundred meters in all directions on the upper benches. gradually getting smaller as we reach the lower parts of the deposit.

Peter Bell: OK. Thanks.

Allan Cramm: We basically have the diameter of one Coke can extending from one side of the mill to the other. From that, we have to assemble a 3D solid of the shape of our ore body to help us mine. It's a challenge.

Fortunately, we've adapted to using the latest technology, such things as blast movement monitoring, so we can actually track the trajectory of rock during blast detonation, to ensure we capture every ton of ore. We don't want to dig a ton of waste by mistake. It's really lowered our dilution by about 15%.

Peter Bell: Really? That sounds like a substantial impact.

Allan Cramm: It is, absolutely.

The way grade affects us is like what they say about advertising for a business, "When business is good, you don't need to advertise. When business is bad, you have to advertise." When your grade is good, you don't need all these optimization techniques. When your grade is low, you need to apply every single skill you have to maximize it.

That starts in the mine. We use blast movement monitoring with GPS on all the equipment. We have GPS on the excavator. We can actually excavate our blast in 3D using GPS technology.

Peter Bell: Really? Does that 3D model have some information about the shape of the deposit from past exploration drilling? I wonder if you are doing ongoing exploration drilling within the pit as you mine it.

Allan Cramm: We have the ability to display in 3D, all geological sample data results and structural mapping. We continue to look at the mine on a daily basis, mine and exploration geologist particularly, to better understand the deposit in an effort to extend on this current mine or to help in the discovery of a new one.

Peter Bell: Thank you, Allan.

Allan Cramm: The geologist here in our office in Baie Verte can actually monitor the excavation, virtual excavation, from his/her desk.

Peter Bell: That's right. I've heard that you completed a comprehensive automation campaign recently -- last year, I believe.

So, you first map out where you think the ore is in the pit. Then, you have "blast control" when you are pitting, which gives you a good sense of where the ore comes down off the wall. You can tell when the excavators are in the ore, then can track it through the truck to the mill with GPS.

Allan Cramm: Yes, exactly. And then we get into the mill. There, we are monitoring with a new PLC that we've custom designed for our application here. We've been able to capitalize on small things, like the impact of our crusher on our throughput. We know when our crusher is actually crushing we can optimize the throughput.

We maintain a large stockpile in our crushing shed of about 500 live tonnes. When the shed is full, we stop the crusher and let the shed discharge some ore. Then, we start up again. Sounds simple enough, right? Well, we've found that it makes a subtle change in the physical properties of the ore when we're actually running from the stockpile. The ore goes slightly coarser. We've been able to adjust with our PLC to reduce the throughput when that occurs. Little things like that have contributed to a 40% improvement in throughput over the last four years.

Peter Bell: Right, this was a major accomplishment for the company. Good work. I believe you are at around 1,300 tonnes per day now, approximately?

Allan Cramm: That's correct.

Peter Bell: I recall that number from my first conversation with Dustin. He was clear that it was a milestone for the company. He also described how the front end of the mill was running at capacity, but the back end still has spare capacity. There is potential to even put higher-grade ore or concentrated material from a satellite deposit directly into the back end of the mill, as I understand it. All that ties in with theme of optimizing existing assets.

Allan Cramm: You've got it, Peter.

In our operation at Pine Cove, we are doing approximately a 3% mass pull so we're moving about 40-45 tonnes to the leach circuit. Our leach circuit probably has a capacity of 100+ tonnes. Theoretically, we could maintain our current front end at 1,300 tonnes and add to the leach process an additional 30-60+ tonnes of concentrate.

Peter Bell: Yes, and there are several good candidates for where Anaconda Mining could locate such a concentrator. When I first met the company, the best candidate for that was your Viking project in Newfoundland but I think that has changed since.

Allan Cramm: Again, you've got it Peter. And it's a grinding mill -- it's a crusher and a grinding mill. We're using column flotation cells, which have a really small footprint. It's pretty rugged and very simple. It is a relatively simple design and our guys have mastered the availability and recovery rates.

Peter Bell: Ah, this word "rugged" -- I would expect no less from the Newfies! Thank you, Allan.

And I wonder about the continuity of the team responsible for those optimizations, Allan. Do you still have the people, do they have the capacity, and is it their job to attempt to repeat the success you had at Point Rousse in Nova Scotia there at Goldboro. It's early days, but I wonder if you will build a new team there. You may have a limited footprint there, as you may be able to operate a concentrator at Goldboro from the office at Pine Cove. What a great situation you have there.

Allan Cramm: It's an interesting question, Peter. Our experience building a team at Anaconda has been quite unique. In 2008, our entire workforce had very limited experience in mining or processing. There was one or two people who had experience in mining, including myself.

The team we assembled initially at Pine Cove was full of young people. Our average age in those early times was about 40. We had twenty different 20-year-olds working with us at that time. The young people were everything from engineering graduates and geo scientists, to mill technicians, and maintenance people. We had a really young workforce and we worked together to optimize our knowledge. We trained each other and, at the end of it, we have created a top-notch crew. They are incredible.

What we're doing right now is to research what helped our guys become so proficient in those early days. We are seeking to identify techniques or aspects of our training that worked or poorly. We'll get plenty from the guys here about what we did wrong and what we did right.

We're going to develop a training program for Goldboro, as well. It'll follow along the theme that we use here, which is to customize training to fit our application. We could actually have people from Goldboro work here for a period of time to understand our culture and how we do things. We could train them very well in the existing work environment at Pine Cove.

I think I would put our guys up with the best in the country when it comes to working in the mineral industry. Their commitment, their interest, and their safety are exceptional. I've been in mining all my life and we have one of the best operations that I have ever seen.

Peter Bell: It's the only story of its kind that I've encountered, period. I've never heard of a junior putting together a mining team in 2008 that stayed together all these 10 years later.

Allan Cramm: Yes.

Peter Bell: I've never heard of such a young, well-trained workforce in the Canadian Maritimes, either! Anaconda Mining is stunning on many levels. Documenting your business processes is going to be important in the information age, so it is good to hear that you're researching your training. I'm afraid that ties into something I encountered about expert systems while preparing for this interview.

I was on Google scholar for narrow vein mining techniques, and one of the papers that I saw mentioned some cool buzzwords. They described some special neural net and "fuzzy expert systems". I had to laugh for a second -- I have never heard of fuzzy expert systems before. The paper was from 2014 in an engineering journal of some kind.

First time I've heard of fuzzy expert systems, but I do have a lot of respect for expert systems. That is a technical term, as you know Allan, that refers to a topic area in engineering. It refers to attempting to replicate the human decision making process with computers. It comes to my mind when you describe how you want to document your training process at the Pine Cove pit, mill, and port. Three legs of the stool for you there, Allan.

Allan Cramm: Thanks, Peter. That's great. You know, one of the things that we're trying to take advantage of is web-based information. It's so accessible and is particularly important for a young workforce.

Today, 80% of innovation is about adaptation. We have done a lot of adapting in the pit. We use existing technology in a modern application and we use it well. Even though we are so small in numbers, we certainly have big desire to capitalize on what we have here.

There's almost a sense of competition around our site for everybody to become better every single day through adaptation of new ideas. I've actually been sitting down with groups of two or three people at a time here in the Baie Verte office over the last month. I have shared a presentation on innovation with them. Particularly, innovation that we've done here at Pine Cove. Some of them know about it, but others may have forgotten about it or were latecomers to our operation. Some of these techniques we implemented were used at other mining operations around the world.

I try to encourage every single person here to consider ways to improve what we do. It'll pay dividends for us, I'm sure.

Peter Bell: From the early days, I always thought that Anaconda was not your typical junior mining company. To actually be in production and stay in production through 2008-2017 always impressed me. And to raise such little equity from 2011 to 2016 is just amazing leadership.

I always felt that Anaconda was run more like a major mining company. To hear you describe history of mining in the region helps me understand that better. And the innovation aspect you have described -- down to the documentation of training. Very sophisticated stuff that is important for success in mining.

Where does that corporate culture come from?

Allan Cramm: Well, I look at myself and I've always had an interest in innovation. Just doing things differently. Maybe it comes from growing up with a father that was always making up interesting tools and jigs in his garage.

A person's interest in innovation is like a seed, but it's not going to grow on its own. It needs the right conditions. If a seed is capable of growing a tomato is not given the right growing conditions, then it is not going to produce a tomato.

In our situation, we had the right combination of corporate leadership, corporate interest, and conditions on the ground at site. Somehow, everything just came together at Pine Cove and we now have a very fertile environment on which to grow innovation. It goes from top to bottom. We're all part of the process. Some of us are the fertilizer, the seed, the water, or we're the sun.

Everybody's got to a role to play. Although not everyone are innovative, they are often supportive of innovation. I can't play an instrument and I don't understand why. I'd like to, but that's not meant for me but I like music. For me, I'd like to go out in my shed and work on all kinds of things.

Peter Bell: Yes, what a person can do in a shed! Interesting contrast between you in your shed and your description of the company's success as a group effort. I hear shades of Ray Dalio in some of your comments, too. Have a look at his "Principles" book if you can -- quite powerful stuff from the world of elite hedge funds. Very different from a small mining operation in Newfoundland, but apparently quite similar in perspective on business management issues! Great.

Allan Cramm: Thanks, Peter. I will look into that.

Peter Bell: Lots of subtle details coming up in our conversation today, Allan. This is great, thank you.

Allan Cramm: You're welcome, Peter. You mention the history of Baie Verte again and it is interesting -- when I grew up there, I worked at a very early age in the major mining companies' sites. These were very structured work environments. I often share with people the details around that.

Our 2017 work environment here at this particular mine is vastly different than it was in 1977. I've seen the differences over 40 years.

Peter Bell: Thank you. And it occurs to me that your presence at mines in the area over 40 years reflects a strong continuity in the mining culture around Baie Verte. The community can be a powerful tool for sharing information like that, on and off the work site.

Allan Cramm: I agree.

Peter Bell: And are things better now than they were 40 years ago?

Allan Cramm: Yes, I would say they are generally better. We have had some surveys done recently to document that, but we don't have comparable information from 40 years ago. We can compare the accident and incident rates and they are much lower now as an example.

One of the things we did recently was to participate in the "Best Place to Work" survey. It was a confidential third part survey of employees and we had to have at least 65% participation to even go through the evaluation. Overall, we had 95% in agreement that the employees with Anaconda Mining Inc. fully understood the long term strategy of our organization.

Peter Bell: Wow.

Allan Cramm: Just quoting from some of these here, we scored 90% overall on our corporate culture and communications. 94% of our employees like what they did at work, "they felt that they were a part of a team." I think these numbers really demonstrate the kind of environment that we have here.

Peter Bell: I can't believe it. Good for you guys.

Allan Cramm: 94% said the relationship with their supervisor was positive, and that they were treated fairly. 97% felt they were treated with respect. These are numbers that most companies would die for.

Peter Bell: In any industry, let alone the mining industry in Newfoundland! It makes perfect sense to me.

Allan Cramm: Me too, Peter. 100% said they were "very satisfied with their employer overall". These numbers are independent. We did not collect these surveys from our staff.

Some teams win the Stanley Cup. You can win the Stanley Cup in one year but you've got to keep practicing to win it in subsequent years. Just because you were the best in 2017 doesn’t mean you’re the best in 2018. You've got to keep everybody motivated. This is a snapshot and it is very good, but we have to keep working to continue to achieve this.

Peter Bell: At this point in time, the valuation of the company is approximately $25 million.

Allan Cramm: Yes.

Peter Bell: When I first met Anaconda, it was $10-15 million back in November 2016. If I recall correctly. Since then, there has been an acquisition of Orex that brought the Goldboro property into Anaconda's portfolio. That was an all-share acquisition when both companies had similar valuations. Amongst your peer group in this range of market valuation, I am not aware of any other gold mining companies that are in production at comparable scale or quality.

I'll briefly mention Mr. Dave Garofalo, CEO of Goldcorp.

I saw him speak recently and was surprised by some things he said. One of the things was that majors need to partner with each other and with the juniors to help fill the supposed shortfall of new gold discoveries to sustain the gold mining industry. It was a great talk and it occurs to me that the operational excellence you're describing here at Pine Cove is something that they would value. The world is your oyster as far as joint ventures go, in my opinion.

Allan Cramm: It's interesting you say that, Peter. Despite our small size, we've had inquiries from the big producers about our operation.

Freeport-McMoRan, for example, contacted us after they realized that we were actually using technology here that they were contemplating. It was a flotation technology. They consulted with us to understand a little bit more about the process, how it worked for us, and what the availability was like. In fact, Goldcorp was another producer who contacted us. I thought that was a neat situation -- a company of 65 people being asked about mining techniques by a company of 30,000 or something like that.

Peter Bell: It's not the Twilight Zone, it's the junior mining industry.

Allan Cramm: Exactly.

Peter Bell: What was the name of that technique that you just mentioned -- the flotation technique?

Allan Cramm: It's called column flotation as opposed to conventional flotation, which was used historically. The columns allow you to change the geometry: instead of multiple rectangular boxes, the column flotation cells are vertical cylinders. They take up a lot less space. We've had great success with them.

Peter Bell: Are they in sequence? Does the geometry allow you to try different paths through the processing across the different columns?

Allan Cramm: I don't know about that. We have a couple of these actually in series and we're using the other ones in parallel.

Peter Bell: Cool, you can do both.

Allan Cramm: Yes.

Peter Bell: When they are in series, is it just the same chemical solution in each column, or is there some change?

Allan Cramm: There are some subtle changes. We typically add a little reagent bit in the last column, in our scavenger cell. We have also set up a scale version of the first column cell that helps us do more test work.

Peter Bell: Do you have a bit of a lab taking shape there at Pine Cove?

Allan Cramm: Yes, we have the ability to mimic a lot of our processes now. However, we still have a small footprint. There are some operations in the world where just the lab for a 55,000 ton a day plant would be the same size as our entire plant.

Peter Bell: And I've heard how Anaconda has automated a lot of the mining activities with a central control room that allows you to even operate remote sites. As in, crushing and concentrator operations located at other projects like Viking or Goldboro.

Allan Cramm: Yes, you've got it Peter. We have operators that can actually work from home and still operate the mill. That technology exists here at the site right now.

Peter Bell: Well, that is great. And the mine site is close to Baie Verte.

Allan Cramm: Most of our employees are within 30 minutes of work.

Peter Bell: Wonderful.

Allan Cramm: That's a great break. Compared to working in remote areas and staying in a bunkhouse. Our guys can be home if there is an emergency within 30 minutes. They're home every day at the end of their shift, as well. That's important.

Allan Cramm: For sure, it has been documented that motivated, empowered workforce will have 48% less accidents, and better productivity, and you feel better going home in the evening, so your home life is much better. There's a lot of advantages to that.

Peter Bell: Indeed. Thank you, Allan. All of this essential information is not something that most people who focus on your share price would know about.

What can you tell me about your background? I suspect that you have a fair understanding of geology, engineering, and business -- even if not music!

Allan Cramm: Believe it or not, I got into electrical when I first finished school. Then I got into surveying. I was a mine surveyor. That's really where it started in mining for me.

About a month ago, I was presented with honorary membership in the Professional Engineering Association of Newfoundland. It's been a long road in between.

Peter Bell: Congratulations, Allan. A tip of my hat to the tradespeople out there -- dream big!

Allan Cramm: Surprisingly, it's 40 years ago that I was first trained as an electrician and I still use a lot of what I learned then in my day to day work as an electrical installer.

Peter Bell: And this is where the continuity of knowledge contributes to the culture in the organization. You get so much from actually doing these things in a community where they have been done for a long time.

Allan Cramm: Yes.

Peter Bell: That's an interesting thing about a lot of rural communities in Canada today. I suspect there is some special knowledge in some of them, whether from farming or forestry or anything else. I wonder if that will be found useful in the 21st century.

When young people can be brought into the fold in these communities, they can help pass it down. As you say with your training as an electrician helping you as an inventor now. The thing we learn can serve us for the next 40 years of a professional career and have additional positive impacts on the community. Who knows, what the impacts are down the line.

Allan Cramm: I see this as a major succession planning exercise, where we try and integrate younger people into more responsible positions throughout the operation.

Peter Bell: A pointed question for you, Allan. As you attempt to increase production, are you expecting that you can sustain your level of success?

Allan Cramm: Yes, I definitely do. My role was initially the VP of Operations for Anaconda Mining responsible for the day-to-day operation. Now, I've moved into a new role -- heading up the research and development work we're doing. My previous role, particularly the production responsibilities, have been reassigned, and I'm still here, to answer questions, and I try to act as a mentor. Some people value that and I think it's important. This maintains great continuity

Peter Bell: Junior and major mining companies both suffer from lack of continuity in key people at times, whether self-inflicted or not. To hear that you're still involved, but are also able to take on new challenges is encouraging. Encouraging the intellectual aspect of the business is very important to help find new people. Can we please talk about these research projects a bit? Well done on the research funding you announced for the narrow vein project.

Allan Cramm: Thanks, Peter. We're pretty excited about that narrow vein research project. I spent quite a number of years involved in underground mining, as you may know. As I mentioned earlier, I was involved on engineering side, starting with surveying and moving on to supervision. During my time underground, I was underground nearly every day.

I worked at two mines in Newfoundland. At one mine, we actually mined some very narrow veins with 1.5-meter-wide development drifts in the ore, and did a series of cut and fill mining stopes. It worked very well, but I always thought there was a better way. We never did advance the mining of the narrow veins very much, but it was something that I always thought about.

Anaconda has two deposits within our claim boundary that are exposed at surface. They're in single narrow veins, but none of the existing mining methods work. The old pit would be vastly too much waste removal and conventional underground would result in the development cost outweighing the value of the mineral. I have been intrigued by ways to develop the deposit from surface, with minimal stripping and without extensive development. I have ongoing discussions and participation with Memorial University related to research on that idea. The university has become a contractor of engineering and testing services to Anaconda.

We were fortunate to get funding, slightly more than $2 million. Anaconda is supporting the balance of the $3+ million dollar project. It is, again, adaptation of existing technology. We're not thinking of reinventing the wheel entirely, but we're just going to put the wheel on a different vehicle.

We're excited about the possibilities to develop the two resources we have here, which are currently idle. Once we develop the technology, we would definitely be interested and looking for other deposits that fit with this mining method.

Peter Bell: Wow. This whole issue of technological innovation in mining is so interesting. What a great industrial setting for robotics. I have no idea what you are working on in this project and I can't wait to see what comes out of it. Whether it's research articles or trial production scenarios, it's just great.

I believe the single vein at Anaconda's Romeo and Juliet target were something like 30 centimeters wide. As in the news release.

Allan Cramm: Yes, they can be that small. Obviously, you can't go into those areas conventionally without much larger mining widths. If you go .6, then you double the dilution. If you go to .9, then you've tripled the dilution. The concept we are debating right now is how to access the vein in the dip direction and slash the ore in a secondary process so that you can take out that width.

Peter Bell: Sorry, please can I ask you to say that again?

Allan Cramm: Yes, of course. The idea is to actually develop equipment that can mine down the dip of the vein. Then just slash the vein in the strike direction to the width of the vein. Then, move the entire apparatus along strike to continue the process.

Peter Bell: Okay. You are setting up an apparatus at one spot on strike to drill down dip into a single vein that shows at surface, then moving it along strike and doing it again.

Allan Cramm: That's correct. This development could occur at intervals that are prioritized by apparent grade, width, and accessibility. All of this is part of the research program.

Peter Bell: And how wide would each development be along strike?

Allan Cramm: Each interval of development may be around 8-10 meters along strike. This is along a vein with showings at surface over 1 kilometer along strike.

Peter Bell: And it's anyone’s guess just how far down dip you will be able to mine to! And to be clear -- you expect to take out less than 1.5 meters of rock down dip, right?

Allan Cramm: Yes, it definitely will be less than that. Ideally, we will mine the thickness of the vein, I think.

Peter Bell: Sorry to interrupt, do you really think you'll be able to mine down to the size of the vein? No waste rock at all?

Allan Cramm: Well, not exactly no waste rock but I do think we will be very close to just taking the vein out. There are minimum levels, but recall that we can pick which sections of the vein to mine. I could see us mining at widths of approximately 0.5 meters.

Peter Bell: And are the veins at Romeo and Juliet sufficiently continuous to allow you to do this?

Allan Cramm: We have done a fair amount of drill testing at Romeo and Juliet to verify continuity. I think that we're pretty comfortable with it.

One thing you might like, Peter, is that the potential to extend on the strike was there but there wasn't a great desire to do such because the current vein wasn't deemed to be economic when it was initially discovered. We've seen that not only at the Romeo and Juliet deposit and several other places at Point Rousse. To find more of something, particularly along strike, is not necessarily going to help make something economic, you know. If there were multiple parallel veins, then it would have been a totally different thing. Unfortunately, one single vein doesn't help you that much.

Allan Cramm: In Newfoundland, today, there is in excess of three million ounces of gold in the ground that is not being developed.

Peter Bell: Any idea how much of those 3 million ounces are in these narrow vein deposit types?

Allan Cramm: Not exactly. There are certainly some, but there are other conventional low-grade deposits that do not have the economics either. There are certainly a fair number of these narrow single veins that have relatively high-grade gold.

Peter Bell: And you are the only ones I've heard of who are considering going after them! I was pleased to hear this phrase, "adapting existing technology", even though I have no idea what the existing technology looks like! Anything you could tell me about things to Google there?

Allan Cramm: Sure, we're going to be using the Raise Climbing approach. That is going to be a big part of what we're doing here -- the Raise Climbing technology.

Peter Bell: Okay. Is that an industry standard technique or piece of equipment?

Allan Cramm: It's been around for a long time. It has generally been used in the underground as a bottom-up kind of approach. We're looking to use it differently.

Peter Bell: I am imagining a drill of some kind with a scooping apparatus.

Allan Cramm: Yes, it would be something along those lines. The drill is pretty simple. The challenge comes in with the rest of it, and that is what we're working on.

Peter Bell: I wonder what mining will look like in the future. There is a hope to remove people from dangerous situations with technology, but an experienced person is essential to mining. Whether it's on an exploration drill or in the control room for the mill, people are essential. The computers are essential, too, but I wonder if there aren't some good ideas sitting in the dustbin of history -- ideas that you could use in Anaconda. As such, I will actually be watching for some low-tech solutions from some of these research projects.

Allan Cramm: I have visited a few underground operations in the last couple weeks and things have not changed much. The last time I was responsible for an underground mine was 2004, 13 years ago, and not much has changed from then to the mines I visited recently. I was surprised, to be honest. It wasn't just one mine, either. I visited several mines and there wasn't that much change in terms of equipment. Safety has improved significantly.

When I come aboveground, it's a different story. I look around at the engineering office over the last 13 years and I'm blown away by the changes. Something as simple as a cellphone has changed everything. The capabilities of cellphone with GPS and the internet is just amazing. We're using drone aircraft now. We've never had that technology before. We're using equipment to monitor the blast movement, which didn't even exist at 13 years ago.

The software we use to model deposits has changed so much in the last 13 years, as well. Things have changed so much on surface and in the engineering office, but underground hasn't changed much at all. Surprisingly, it's still the same techniques. There's a lot of opportunity to change things underground, to use existing developments and adapt.

Peter Bell: I wonder if that is more due to the logistical challenges of being two kilometers down in the earth or the culture of the mining companies' underground operations.

And I wanted to ask about the rock at Romeo and Juliet around the veins. Do you believe that's likely to be sufficiently competent to allow you to get in there and mine the vein?

Allan Cramm: Yes, I would expect so. We've done extensive rock mechanics and drill testing. The rock is good quality. We're looking at the extension possibilities of that vein now in that region.

Peter Bell: Is there any variation in mineralized zone that would suggest some areas of strike are better than others?

Allan Cramm: There does appear to be a pinch and swell component to the showing of the vein at surface. We think that occurs underground, as well. It is a standard feature of the deposits here. The mineralized zone does hang on the footwall very well and the rock type is consistent.

Peter Bell: And how long is the showing at surface?

Allan Cramm: It has been traced for nearly 300 meters.

Peter Bell: That would seem to open up so much target area for you. And even more targets from other narrow vein deposits that have been orphaned in the area. With so many targets, you have to match the right target and the right technique.

Allan Cramm: The major discoveries in Newfoundland have, almost without exception, been follow up of surface exposures that were identified with geochemistry. Even with our drilling at Romeo and Juliet, we are just at the surface. These deposits can yield great amounts of mineralization at depth.

Peter Bell: And I wonder if someday, down the line, you can use these narrow vein mining techniques to help you do exploration drilling in the same way that you can drill from the base of an open pit mine. How deep are you thinking about taking these narrow veins compared to most exploration drill holes?

Allan Cramm: If you think back to 100 years ago, before diamond drilling, miners often used shallow shafts to get an understanding of a particular showing. Just as we look at the wall of the pit as we mine it, they would dig a shaft to get a cross-section of the rock at a surface showing. I know of as many as 20 shafts in this area of Newfoundland that were dug for exploration purposes back in the late 1800s.

Peter Bell: That's right. In the same way that the open pit gives you a large screen TV, some of these shafts are more like a mobile phone.

Allan Cramm: Except they didn't have phones, did they Peter? Sometimes, what's old is new again. It's happening all around us today. The taxi-cab has gone to Uber. It's the same vehicle, same function, but now done radically differently.

Peter Bell: I'm holding my breath for Uber to arrive in Baie Verte!

Allan Cramm: It's not here yet. I've used it elsewhere and it's just a like a taxicab. It's an example of someone thinking there has to be a different way or a better way. We're out there trying to do things better and faster.

Peter Bell: And all the disruption that ambition brings along. Just to mention it again -- you have the potential for good tonnage of ore from Romeo and Juliet with mining at intervals along strike.

Allan Cramm: Yes, and we have a processing plant in the area with capacity.

Peter Bell: Right.

Allan Cramm: You need an economic way to get it out from the mine, to get it to a plant, and to get it processed. If you don't have a plant, then developing a better way to mine the deposit is probably not your first priority.

Peter Bell: And that puts you in a unique position where you can invest in R&D to figure out how to do it.

Allan Cramm: That's right. We had the deposit, we had the mill, and the mill has some surplus capacity. It probably wouldn't require any additional people in the mill to use that capacity. If we could source another 200-400 tonnes a day of 8-10 gram material, then it would have a pretty significant impact on the economics.

Peter Bell: Would that tonnage displace stuff at the front end of the mill, or would that be able to go into the back end based on the higher grade?

Allan Cramm: It depends, but some of it could go in the back end directly. When we first started here, we did some whole ore leaching because of issues in the front end and we were getting good leach recoveries on the back end.

Peter Bell: Really?

Allan Cramm: Yes. We've learned a lot since then, in terms of how to grind the rock. We're taking our material down to 20 microns in the back end of the grind.

Peter Bell: Wow.

Allan Cramm: Yes, it is very small. It is basically the diameter of a white blood cell.

Peter Bell: That's a lot of grinding!

Allan Cramm: You know, people couldn't even measure that in the plant 20 years ago.

Peter Bell: What progress, eh?

Allan Cramm: It's amazing. I think we have facilitated a group of people that think about doing things differently and I expect everybody to be thinking like that. Everybody will have some good ideas going forward in how we can do things around here and I want to hear them.

Peter Bell: Good for you, Allan. You are the spirit of Anaconda!

I can't wait for the day when you're mining one of these narrow veins and get to a point where the vein seems to split or something unexpected that suggests much richer mineralization. As you said, most discoveries in the area were made by following up on surface showings.

Allan Cramm: Yes, that's right Peter. A little bit earlier on in our discussion, we talked about the relationship between the Baie Verte peninsula and the Mother Lode in California. Well, this is another similarity. There were 25 or 30 big mines that collectively put out about 8-10 million ounces of gold and went down 1.5 miles below the surface. They started with one discovery, I think it was called the Lincoln mine. That first mine that led to a different understanding and the discovery of projects like North Star, Eureka, and others.

Peter Bell: I've heard a bit about the Walker Lane in California and Nevada, even down into Arizona. And the Carlin trend up in Nevada, too. What a great area for mining. And Newfoundland is right up there with similar potential, based on the little geology I know of there.

Allan Cramm: I think that we have the potential to grow the entire industry here. Newfoundland is quite stable, politically. It is very pro-mining, particularly in the area around the Baie Verte peninsula. This has been a mining center going back to the 1800's. I think there's been a mine operating every decade since the 1800's.

Peter Bell: Wow.

Allan Cramm: There have been a couple blips in it, but I think you can trace a mine operating in every decade for the most part. It has been a good work environment, too. At least, it can be.

I encourage all the younger people getting into it, to make it their industry -- put their name on it. Especially in terms of safety and environmental considerations.

We've all learned better environmental practices and continue to do so. Anaconda has researched better environmental practices since we started at Pine Cove. We're doing an extensive research project on our tailings to repurpose it for agriculture or industrial purposes.

Peter Bell: Really?

Allan Cramm: Yes, we're actually growing grass in the tailings. It's probably as good or better than what you would grow on a compost soil.

Peter Bell: That's amazing.

With so much history of mining in the area, you've probably seen all types of people from the mining industry. It's one thing to talk about all the good things that you will do, but the history of mining is not always a pleasant one. There have been a lot of negative impacts in the past across the board. I appreciate you guys actually walking the walk and working to do things better.

Allan Cramm: And we do get recognized for it. We may not appear in the papers or the radio or TV all the time, but we get recognized by the industry associations and amongst the people in Baie Verte. As you said, Baie Verte is a town of approximately 1,500 people and the entire Baie Verte peninsula has got about 8,000-10,000 people. It's a small community, but tightly knit.

I grew up here, so most people recognize me and recognize where I work. Almost without exception, they're complimentary on what Anaconda is doing for the region, in terms of its commitment to the youth and our social conscience.

They recognize our involvement with the recreation, particularly our big commitment to provide free swimming lessons in Baie Verte. We're making it possible for every kid on the peninsula to learn to swim for free.

Peter Bell: And if you're living by the ocean, then you really should know how to swim. Very good choice by Anaconda.

Allan Cramm: The kids appreciate it. I run into kids and they recognize Anaconda because they know Anaconda through swimming.

Peter Bell: And some of them probably know it through Twitter, as well!

Allan Cramm: Sometimes I wonder if I'm the only person who is not on Twitter.

Peter Bell: That would be just fine if you were, Allan. Don't worry about the social networks online, you are plugged into the right social networks out in Baie Verte.

Allan Cramm: That's right, Peter -- it's an older type of social system out here.

Peter Bell: What's old is new again! Can I ask about your involvement or your thoughts on Goldboro, generally?

Allan Cramm: Goldboro is a growing thing for us. We've matured as an operator and producer, and Goldboro is a good match. It's located in another historic mining area. It's likely to be predominately underground and I have a lot of underground experience, so I will be involved. I am happy to offer to help out in any way I can. Anything to make sure we do everything possible to make that project a reality.

One thing we are considering at Goldboro is to move the ore to Newfoundland, particularly while we develop some of the site infrastructure. Our project at Point Rousse is located on tidewater, as is Goldboro. Having tidewater accessible at both locations presents a lot of opportunities. We're looking at the best ways to capitalize on that.

The local community at Goldboro is strong. I've been there on several occasions and had some of the residents express their pleasure about our intentions to develop a project there. They referenced having grandchildren working outside the province, who they wish could back to Nova Scotia and have a good life. Maybe we will create that opportunity for some people.

Peter Bell: The exodus of young people from Newfoundland to Alberta that has occurred through most of my life may be slowing and I have always believed it would reverse course. It is great to hear about similarities between the community at Goldboro and Baie Verte.

Allan Cramm: We have a very stable workforce with very little turnover in our operation. It's been that way ever since we started, but even more so in the last 4-5 years. We have benefited the community at Baie Verte to a great degree. People go home every night and we have an opportunity to make the town the best possible town to live in. I involve myself with some volunteer activities to help make Baie Verte a great town, and I encourage everybody to do so.

We have a lot of people who volunteer, such as the fire department, coaching, and so on. It helps create the kind of town you want to live in, the kind of place you want to work in. I often tell the team here that they have more control over their destiny here than they would at a 600-700 person project.

Peter Bell: Yep.

Allan Cramm: We know when someone don't make it in to work here any day. When they don’t Others generally pick up to cover up for them. We don't have a lot of extra people. Everybody's contribution here is so important on a daily basis.

Peter Bell: A smooth operation at a small scale is a good sign. It is all so exciting from my perspective as someone who is looking at the stock. A lot of these issues around social license to mine are absolutely critical to being a successful mining company, but they don't mean much for the stock per price today. That's OK because I am out here on the hunt for these sort of opportunities. To be able to put it all into perspective with you is just great.

Again, it comes back to this feeling I had that Anaconda was being run like kind of a senior mining company. I see that history now in the region. Even the name, Anaconda, is historical. Anaconda Copper was a very large American mining conglomerate in the 20th century.

With all that history, it's unique to have a gold-producing junior with a micro-cap $25 million valuation trading on the TSX Venture. Hasn't done much equity financing over the last five-plus years because they've been bootstrapping off production from this small mine in Newfoundland that nobody really thinks much of because it's small and low grade. But you are making it work!

Allan Cramm: We've had some great hockey players in Baie Verte, you know. Just fantastic hockey players when they're on the ice in Baie Verte. They shine in Baie Verte and everybody watches them. When they move on to bigger communities and bigger ice rinks, they don't shine as much, but when they play on home ice, they get every fan around. Anaconda is like that, a bit.

Peter Bell: There's not a lot of love out there for the mining sector right now, so if you can get that attention on home ice then you must be doing something right.

There is this concern out there that Anaconda is just a junior producer with a small, declining asset base -- hence the cheap valuation in the markets. However, I always thought there is more going on than that. My impression was that Anaconda was run more like a producer than a junior, specifically because of its limited use of equity financing from 2011-2016.

Now, I find myself wondering what would take Anaconda to a $250 million valuation. You are a growing concern, after all. What kind of a production scenario or asset base would it require for Anaconda to get there? Regardless of the gold market, it's starting to take shape for me here a little bit after talking to you for around 90 minutes here today. What a great chat. I do hope some of the Bay Street analysts find it useful.

I'm not a financial analyst myself, but I think Anaconda is on track for some great surprises. It's always great to expect a surprise.

Allan Cramm: I hear you, Peter. From the outside, you can see a truly well-oiled machine here but things are different on the inside of the company. If you were to walk in and try to recognize different people's roles just by looking at them while they were working, then I think you'd have a hard time actually telling them apart. Everyone is committed to get the maximum through the mill and the maximum from the pit, regardless of what their role is. If it means helping out someone to lift a cable, then that's what people do.

If you were to walk through here, I think you would agree that there's something different here. There's a different chemistry, and most people recognize that when they come to visit.

Peter Bell: You may not want to comment on it, but there has been some discussion online around share ownership in the company by management and directors. I wonder about share purchase arrangements with the staff, if there's a culture of being a shareholder in the company.

Allan Cramm: You know, we've done some work around that. We've used other ways to incentivize people that seem to have gotten a better response than stock options , but maybe we should consider it again.

Peter Bell: I always wonder about analogies between tech companies and junior mining companies.

Allan Cramm: I never thought of it like that before, Peter.

Peter Bell: The big part of tech companies is share-based compensation, not just for the executive team but the technology workers throughout the staff.

Allan Cramm: Interesting. We have fairly openly discussions here about ways to recognize our people's achievements and how to do so differently than traditional means. We continue to look at that. And we often explore different ways to engage vendors where we take the risk. The companies that do exploration take the risk and the vendors stand to be rewarded if we're successful, but they don't always share the risk.

Peter Bell: Indeed. And you guys have put together a pretty nice property package around Baie Verte there.

Allan Cramm: Oh, yes. We have a significant land holding here. We're learning detailed information specifically about these types of deposits by mining at Pine Cove. We've done aggressive exploration in other areas at Point Rousse, as well.

Peter Bell: I look forward to reviewing that in depth with Paul McNeil, Anaconda's VP of geology.

Allan Cramm: Yes, I am sure Paul would be every bit as enthusiastic as I am about this, Peter.

Peter Bell: Is he based in Baie Verte, as well?

Allan Cramm: He spends a fair amount of time here, but this particular week he's actually at our exploration office in St. John's.

Peter Bell: Right. Always great to hear about that office in St. John's, Newfoundland. Lynn Hammond is based there as well, right?

Allan Cramm: Yes, she works at that office. One great thing about St. John's is that you can fly close to our various properties. You can fly to Halifax and drive to Goldboro. You can also fly to Deer Lake, which is near the Viking Project. You can be at the Viking Project almost faster from St. John's than it would take to get to mine at Point Rousse.

Peter Bell: That's hard to believe. Would you say it again?

Allan Cramm: It's a 55-minute flight from St. John's to Deer Lake, and it is about 30-45 minutes from Deer Lake to the Viking project there. From Deer Lake to the mine site is about two hours.

Peter Bell: Great. How much of that drive to your Viking Project is on roads?

Allan Cramm: It is all on government maintained roads up to last four or five kilometers. They are actually quite good roads.

Peter Bell: Good. When Dustin first described the Viking Project to me, my impressions was that it almost served as an ace up your sleeve.

Allan Cramm: There's certainly a lot to learn about that project as we go forward. It's a whole new environment for us, too. It's certainly a different geology than this area, but we're learning about it every day.

Peter Bell: I don't recall the terms of the acquisition of the Viking project.

Allan Cramm: Yeah, I don't know all the details. Certainly, Paul would be more informed on that.

Peter Bell: Thanks. And it is a different geological setting at Viking than it is at Point Rousse, right?

Allan Cramm: That's correct. Viking, for the most part, is hosted within a granite, which is different from the rock at Pine Cove. There are certainly some differences. But, hey -- I'm not a geologist. When you get into the quartz vein, they all start to look alike.

Peter Bell: And when you're grinding them down to 50 microns, they really start to look the same! Was it 50 microns at the grind?

Allan Cramm: No, it was actually 20 microns in the leach.

Peter Bell: Wow. I wonder about sourcing ore from different locations and putting it into different parts of the mill. Do you have a sense of any curve balls that may throw you on the metallurgical side?

Allan Cramm: There are certainly some tweaks required, but we've been working with a couple of labs in New Brunswick for quite a while now and we know what their lab gets from our ore. When you go from a lab scale to plant scale, you typically expect changes: what happens at the lab doesn't necessarily translate into the mill.

Based on all our prior work with the lab, we know how the results in the lab scale up to what we are doing at the plant. We've done a fair amount of that kind of work using the ore that exists here. When we take ore from all the deposits and run it to the same lab, we can predict fairly accurate what results will be at the plant.

Peter Bell: Great.

Allan Cramm: Yes, it is quite an asset to have. When most companies go to a new project, they start from the lab and you don't have that experience with scaling up from the lab to the plant.

If we're going to be testing a new ore and we get a certain result in the lab, we can have reasonable confidence of what we're going to get based on our previous experience with the same lab and mill.

I think that we can still tweak it a fair amount. There are all kinds of reagents that can be tweaked and that is the whole idea behind our small-scale model operating plant. We will set it up to operate on existing ore and then we will know what results are good or bad as we process the new ore with the same reagents. We can experiment with different things using this small-scale operating plant.

And now that we are located at tidewater, we actually have to the ability to take Panamax vessels here. We're now shipping 60,000 tonnes of aggregates every week, basically from this Pine Cove down to Charleston. If you were to draw a radius of that distance centered at Pine Cove, then you could reach the U.K. If we can send aggregates out to the USA, then why can we not bring in ore from areas as far away as the Carolinas, or U.K., or Greenland? People in the global mining industry are starting to look at shipping ore differently. Moving product on the water can be as cheap as tailing storage now.

Peter Bell: Really?

Allan Cramm: Yes, certainly. It is interesting to consider the implications of that, eh?

By the end of this mine, we'll have a seven million ton tailings capacity with the open pit. We've got it permitted now so that two known deposits can use it for tailing storage. To build this type of tailings capacity in a green field location for those deposits would probably cost about $35 million.

Peter Bell: My guess was $50M.

Allan Cramm: Well, that's right -- it could be substantially more. I have seen it as high as $20 per ton of storage. For our pit with capacity for 7 million tonnes, that is a noteworthy consideration. At the end of the mine life, the Pine Cove Pit actually may become an asset for us in this way. Our ability to import ore on an international scale is exciting and unprecedented. It hasn't been done before in this part of Newfoundland, but it's a great idea.

For a number of years, a company called Crew Gold brought in ore from Greenland to Newfoundland for processing. We have quite a few more advantages now. For one, the process plant is near tidewater and that reduces the cost of transport itself. We have a deep-water port that can accommodate large ships which generally reduces ocean transport cost. We have to look at this concept more for gold processing. I appreciate its new for most people. However, there is iron ore going through Newfoundland all the time. There is iron ore from the mine in Schefferville that goes to Quebec over the railway and then overseas by boat. They are shipping run of the mine ore, which is not processed.

Peter Bell: Wow.

Allan Cramm: And that same ship is coming back empty. You have to wonder, right?

Peter Bell: And did you just say that they are shipping iron ore as whole ore?

Allan Cramm: That's correct.

Peter Bell: Interesting. I wonder if that reflects the legacy systems in place in the global iron ore industry. Iron ore prices were soft for many years and that discouraged a lot of new activity, but the old production systems stayed in place. The world needs iron ore and I suspect many mines are still going off inertia.

Allan Cramm: Well, that is an interesting topic. Nobody thought Jumbo Video was going to die, but it did. It's the same thing. You have to look at everything you do and see if you can do it differently and improve on it.

Peter Bell: Right. It's amazing to think that you're actually growing grass on some of the tailings at Pine Cove already. That fits so well with your possible plan to fill the Pine Cove back up with tailings from another mine down the line. That couples your technological innovation and your environmental awareness -- given your track record there, I would expect the permitting side of things would move smoothly. Particularly given the precedence of shipping iron ore in Newfoundland, as well. It's all moving in the right direction, isn't it?

Allan Cramm: Yes, I believe so. I'm confident that we're going to be doing some great things here and for a long time. I think our approach is totally different.

Peter Bell: One thing that occurs to me about filling up the Pine Cove pit with tailings is that you may find you don't want to fill it up when you start poking some holes down through the bottom of the pit. Maybe the Pine Cove open pit will have more life to it, yet!

Allan Cramm: Yes, we've hypothetically asked ourselves that question many times here. What do we do if we find something? We're going to ask ourselves that question a few more times in the next year or so, I would think.

Peter Bell: And again, and again, as long as you can. Like the dog chasing the car -- what do you do if you actually catch one?!

I think you sure have caught one here at Goldboro. From an operational perspective, it makes a lot of sense. The potential for shipping to Point Rousse and what you've mentioned about international shipping is just fascinating. The advantages of shipping are not something that I hear enough about from junior miners. I wonder if it's almost pivotal for a potential revival of mining in North America. That may be a stretch, but we'll see.

Allan Cramm: Indeed, Peter. I think that being on tidewater created so many opportunities for us. A driving force for us was the desire to maximize what we have with our plant at Pine Cove and continue to enable everybody to live at home.

Peter Bell: It's August 2017 here -- are you going 24/7, 365 at Pine Cove at this point?

Allan Cramm: Yes, that's correct.

Peter Bell: I believe that the throughput numbers were down a bit in one of the recent quarters, but they are variable and the trend seemed clear enough to me. Do you still think that you can maintain that throughput without exhausting the resource at the pit before expected?

Allan Cramm: Well, the miners continue to do extremely well there and we continue to see some pretty encouraging things there even still. When you get to the depth that we are at in the pit now, you get into a vicinity where there are fewer drill holes. The frequency of holes at these levels are just not as great as they were in certain areas above that. We're having really good results at these levels, particularly the last month or two.

Peter Bell: Are you doing much resource-definition drilling to kind of get a sense for things before you start mining?

Allan Cramm: Yes, we do a lot of that. We've adapted the existing production drills to do sort of a modified RC chip sample process.

Peter Bell: Of course, you have. That is great to hear. And you're finding that that works well?

Allan Cramm: Yes, it works very well. Actually, our process for analyzing all of that is working very well. I mentioned the 3D model of the excavation earlier and we have made a lot of progress on all that.

Peter Bell: I would think that your RC drilling to prepare for the pitting would be cheaper and quicker than full core drilling. Can you do assays of the chip samples at site?

Allan Cramm: Yes, we do that. We actually do what's called a bottle roll sample. We take a 100-gram sample in a bottle, add a leach tab and rotate it for about two hours. Then we measure gold in solution with the AA machine. Based on our lab work, we adjust it by about 5% to give us an estimate for the gold recovery after 90 minutes. We do verification assays offsite, but the bottle roll samples are quite a cheap and fast method to get a very accurate value for samples.

Peter Bell: Did you say that you're getting good recoveries after even 90 minutes in the bottle roll tests?

Allan Cramm: Yes.

Peter Bell: And how does that compare with the time to recovery in the columns?

Allan Cramm: Well, we actually use conventional leach tanks that have about 96 hours of retention time. We don't need that much, but we have it because the tanks are that size.

Peter Bell: So, is that where the extra capacity is in your processing at the back end of the mill?

Allan Cramm: Yes, that's right.

Peter Bell: OK. There is a difference between the timeline that you're using for your leaching versus the timeline that the tank is designed for, right?

Allan Cramm: Yes. We have four tanks and we actually use one of them just for preconditioning now. We don't add any cyanide or anything -- it's just air. We just add air in the first tank and are still getting recoveries within 1-2% of the final recovery value at the end of the second tank.

Peter Bell: So, that is where your potential to double capacity comes in.

Allan Cramm: Exactly.

Peter Bell: Amazing to hear about preconditioning the grinded ore with air. This is the same ore that you've ground down to 20 microns before. It sounds like a cheap approach to me, I like it.

Allan Cramm: And It keeps the tank in good shape, too. One thing you may not realize about it, Peter, is that it also provides us with a bit more capacity at that stage of the process. If we have some issue, such as maintenance on the grinding mill for instance, then we can continue to operate the back end of the mill at the same rate by drawing down stockpiles that are stored in one of these tanks. It provides us with surge capacity. We only use it from time to time, but it is very handy.

Peter Bell: Great. You certainly want to be on the right side of any surges or drops in process flow, wherever it may occur.

Allan Cramm: It was a long time before we realized just how sensitive the whole operation was to surge. If something happens in the plant on a Monday, then you'd better believe that it can have an effect on operations by Thursday. We realize that now. I don't think we ever had the ability to measure that effect as accurately as we do right now.

Peter Bell: You mentioned data and tracking the cascade of events from something that happens on Monday through to Thursday. I assume that is possible because of the automation at the plant. Now, I've heard Keith Neumeyer mention how beneficial SAP has been to some of his mining operations and I wonder if you have thought about using SAP or something similar?

Allan Cramm: Yes, indeed. We use the Surpac software for the geology and are using regular database programs for all the production stats. We track an incredible number of KPIs in our processing plant. We have linked up our PLC system to an historian, so we can actually go back and track the operating parameters from four years ago.

We track more KPIs in our plant here than any plant I've ever worked at. It's really beneficial for troubleshooting and optimization. We can monitor many operating features second-by-second and we can search through all past situations to help us figure out what may be going on at any time. We have really developed a good understanding of the plant from this detailed data.

Peter Bell: Your relationship with academic researchers and engineering consultants -- I feel like that's a dream scenario for your applied research.

Allan Cramm: We have very good relationships with Newfoundland Memorial University and the College of the North Atlantic, which is a provincial post-secondary institution that has fairly broad research capabilities. We work with those two groups extensively. We also work with RPC in Fredericton on research related to processing

In fact, we presented a paper last year at the Canadian Mineral Processing Conference that talked about our research using ozone as an alternative to destroy cyanide. The person who co-presented the research on our behalf was a 25-year-old engineering graduate Chris Budgell, a Mill Process Engineering Coordinator at Point Rousse.

Peter Bell: Wonderful. I was going to ask if you have the data and if you have the people to help you make sense of the data? It would seem that the answer is clear.

Allan Cramm: Yes, I'd say it is really a unique experience. It's almost like we're an idea incubator here. We've got the ideas and we know who to help us to develop them to find solutions or troubleshoot.

Peter Bell: Mining is a heavy industrial activity, but it's also a sophisticated activity. Science plays a big role in the long history of mining. The chemistry and everything is very important. It's great to hear that Anaconda is lined up on the right side of all that. It makes me think of what the majors out there are looking for in partnerships with juniors. If anyone from Goldcorp gets a chance to read through all this, then they stand to benefit from educating themselves about all the things that you're doing.

Thanks for mentioning that both Freeport and Goldcorp have approached you in the past to ask about your experience with that flotation technique. What a neat little detail.

Allan Cramm: Yeah, I thought so too. I was glad we could share some information with them. By the same token, we often bring retired miners or process operators to the project. We hosted a little event for retired miners here last year and brought some retired guys back to look at what we do today. It's great for them to see someone value them and we stand to get some great ideas from the whole thing. I believe that combining some of the old techniques with new technology could be very effective.

Peter Bell: As you go forward with all of that, I strongly encourage you to document as much of that as possible. In the same way that we've documented this call here today, there is potential to document some the old-timer's knowledge and stories. You never know what will come of it. We're in the information age now, right?

Allan Cramm: That's right, Peter. It has changed all aspects of our business, even our relationships with the university and the college. I actually expressed our interest for the university and college to actually consider us a classroom. All the access provided by the internet and everything makes it so that our mine site could actually function like a classroom. The university and college do this kind of thing more often now and it would be beneficial for us.

Peter Bell: What a classroom that would be. Whether you're out tromping through the field and hitting rocks with a hammer or taking readings from the sensors in the leach circuit, there is no shortage of things for students to learn about.

Allan Cramm: And this is a unique mine in Newfoundland. What we do here is particular to us, just like what another operator does at his site is unique to that site. We can provide students with great insight into what we do here. It can all be very current with the equipment and technology we use, which is certainly ahead of some of the equipment used by the universities and colleges.

Peter Bell: Yes, and you can buy that equipment with cash flow from operations rather than waiting for a government funding package to come through. It strikes me that there is a similarity between the universities waiting for government funding and the typical junior mining company waiting for equity financing. In each case, you are different. Anaconda certainly is a rare bird.

Allan Cramm: I think that eventually we'll be on the big ice surface at some point and people will really see what we're doing.

Peter Bell: And in the meantime, keep it under control and just deliver. You mentioned Point Rousse has been in production for nine years of production -- how long have you been involved?

Allan Cramm: I was the first employee here, actually.

Peter Bell: You yourself were the first employee at the Point Rousse project for Anaconda Mining?

Allan Cramm: Yes. My connection was that I was the General Manager for Richmont Mines when we processed a bulk sample from Point Rousse back in 2004. That was my first introduction to anybody with Anaconda Mining. In 2006, Richmont sold the operation, and I had a couple opportunities. I chose to come work with Anaconda and I don't regret it. We've had a lot of fun in the last 8-10 years, particularly since 2010. Every year is getting better and better.

Peter Bell: Wow, I didn't realize that you were the first employee at the current incarnation of Point Rousse. That is great, thank you so much. We're approaching the two hour mark and I am very grateful for all your time here today.

Allan Cramm: I appreciate it too, Peter.

Please note that I was not compensated to prepare this material. This interview was recorded on August 10, 2017. The transcript was reviewed by the company and was originally published to: