By Peter @Newton Bell, 28 October 2016

You’ve probably heard the saying that it is important to find a junior mining company with a management team that has a record of success doing what they are currently attempting. Well, I had a conversation with Mr. Tim Warman, the CEO of Fiore Exploration, recently and found out a tidbit of information along those lines that you might find intriguing.

Mr. Warman told me that he led a junior called Malbex Resources from private start-up to takeover by Barrick. The way Tim put it was: "… we discovered what ended up being Barrick's Alturas deposit, except that we had the ground on the Argentinian side and they had the ground on the Chilean side. Unfortunately, there was a lot more gold on Barrick's ground than there was on our adjacent ground. A technical success, but you can't win them all." This becomes all the more interesting when you discover that Mr. Warman is currently leading Fiore Exploration's activity at the Pampas Augusta Victoria project, which surrounds Yamana's Pampas Augusta Victoria mine. The Pampas Augusta Victoria mine is part of Yamana's Pampas El Peñon mine, which is one of three cornerstone assets for the major gold producer.

Fiore is certainly in the right neighbourhood for a massive discovery. Again, Mr. Warman said it best: "We've got a great starter project. You can't ask for more than a drill-ready project right next to an operating mine. And we're well-financed and well-positioned to continue doing what we're doing. We think we will be successful at it." After learning about the company, I am inclined to agree!

The company is a young one. It was recently a shell, named Rouge Exploration, but was relaunched with the help of Frank Giustra, Gord Keep, and Brian Paes-Braga. That is a strong list of backers, in case you don’t already know. 

Mr. Warman said: "There was an initial round of about five million at twenty-six cents and another round that came to eleven million at fifty-five cents. Those are the levels that people have put money into the company at. It is running a bit above the last issue price." I am encouraged that the shares haven't run wildly ahead or fallen substantially since the last financing -- it seems to suggest a degree of restraint that is lacking amongst some gold juniors these days. That said, I think Fiore's shares have the potential to run substantially as the story develops and becomes more widely known. 

The company acquired the Pampas Augusta Victoria project from Arena Minerals a little over two months ago and has been busy at work since then: "We've carried out a geophysical survey over both concession areas. We've gone through all the data and reviewed it and come up with our drill plan. Very soon we are going to have a drill turning on the project. The plan is to have about 8,000M budgeted in the first phase of the drilling program. If we get the success that we are hoping for and expecting, then we have a lot of capacity to expand that program. Bring in other rigs, drill more meters." Again, I encourage you to dig into the details here and educate yourself about everything that they have been up to.

The company has a clear vision that is well suited to their team and current market context: "The elevator pitch for Fiore is that it is a company that is well-financed to take advantage of the complete absence of exploration going on in Latin America right now. If you look at exploration budgets, I think they are down by 60% over the last five years. There is virtually nobody doing exploration. Even the majors are not doing exploration, except around their immediate projects. There are a ton of good projects out there that have essentially been orphaned," says Mr. Warman. This strikes me as a clear contrarian strategy from management that has the potential to payoff substantially as the next phases of the gold market cycle present themselves.

Fiore has ambitions beyond the current, starter project as well. Mr. Warman said that "The plan is to add at least one new asset in the fourth quarter, before year end. Ideally, we would like to add more than that, but will commit to having at least one." They have cash on hand to make such acquisitions immediately and have proven their ability to secure good deals with the terms they face to acquire 100% of the Pampas Augusta Victoria from Arena Minerals.

In case you weren't excited yet, allow me to share a short excerpt from our interview that should convey some of the excitement that Mr. Warman has for the project: 

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T: One of the interesting things is that, when I first walked over to that outcrop, there was a drill pad on it. I thought "Oh, rats, it's already been drilled." And I started looking around to see where the drill collar was. Typically, they leave a big bit of tubing in the hole so you can find the collar again. I was looking around and I couldn’t find one. And I asked Vern, "You know, where's the collar on this? Did they cover it up?" And he said "No, they put the pad in but they never drilled it."
P: Oh, wow. So, you went and drilled that yourself?
T: Well, we will.
P: Great! Was this a rock chip sample then, in the picture?
T: Yes, you can see it outcropping all over surface.
T: In fact, it's kind of neat. You can see the red colour when it's nice and fresh -- when you break it open. But when it weathers in the desert, you get this desert varnish on it. The other picture there, that's the same rock.
P: Oh, no! (laughs)
T: You get this kind of brown varnish on it. If you're a geologist and you've got your eye out, then you can see it fairly easily, but it doesn’t scream out like the red stuff does.
T: This is the stuff that any geologist would say "I've got to get a drill hole under that."

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I encourage you to sign up for email updates and reach out to the company for more information. You can also look forward to the full transcript of our interview on CEO.CA here soon.