Proactive investors

Additional information

Additional	Information
Market:	TSX
Sector:	Gold Mining
Epic:	GNG
News:	Latest news
Web Site:	Golden Goliath
Other Articles:	29-04-200916-04-200903-04-2009

Golden Goliath's President, Paul Sorbara, Talks to Proactive Investors

by Proactive Investors

So Paul, thank you very much for joining us for this interview.

You’re very welcome Harry, it’s a pleasure to be here.

Please give us a brief introduction to Golden Goliath, the company’s business strategy and what distinguishes Golden Goliath from its peers.

Certainly, Golden Goliath Resources is exploring for silver and gold and we are doing this in Mexico. Our business strategy is to develop our portfolio of prospects by applying modern exploration techniques to areas of old known mineralization - old gold mines that have operated there in the past and what distinguishes us most from our peers is that rather than having one or two properties under option from another company or from individuals, we already own 100 percent of an entire Mexican mining camp which is about 15 by 25 kilometers in size and it contains probably 100 old silver and gold mines that date back to 1736. This is unusual for a junior company to have a large portfolio like that, a large property package and its raised interest in our company from major companies around the world and that is one of our biggest distinguishing features.  Another distinguishing feature is the fact that well known companies such as Sprott Asset Management and Agnico Eagle Gold mines are our largest shareholders.

Why explore for gold and silver in North Western Mexico?

North Western Mexico is a fantastic place to look for gold and silver. It hosts the Sierra Madre Occidental which is a mountain range and the source of the largest exposure of tertiary rhyolitic rocks in the world. Since the time of the Spanish Conquistadors the Sierra Madre has produced about 40 million ounces of gold and one or two billion ounces of silver, so it’s a very, very rich area. It’s also an underexplored area and it’s an area where I have a lot of background – I worked in this area in Mexico back as far as 1980 when I was working for a large Canadian mining company which was based in Guadalajara. So it’s a fantastic target, it has good access, it’s close to North America and it’s an excellent place to work.

Talk us through Golden Goliath’s relationship with Agnico-Eagle Mines, Sprott Asset Management and Comstock Capital.

Agnico-Eagle Gold Mines is a medium to large scale gold and silver producing company based in Canada. They are well respected around the world and they are very well run and we are very proud of the fact that Mr Marc Legault, who is the Vice President of new projects, is a Director of Golden Goliath Resources. Agnico-Eagle Gold Mines is also a major shareholder of Golden Goliath Resources – Agnico owns about 14.9 percent of our stock and they happen to be developing their own project which they plan to put into production called Pinos Altos which is only about 60 kilometers from our property package in North Western Mexico.
As for Sprott Asset Management, they are a mining financing company, they are well known around the world, their gold guru – John Embry is quite famous. Sprott Asset Management is actually our largest shareholder – they own about 18.4 percent of our stock. The fact that these two companies, Agnico and Sprott own 33 percent of our stock makes it easier for people that are doing their due diligence, investors, to conclude upon golden Goliath’s potential, certainly as those two groups who are very smart - if they want to invest their money maybe others want to do that too.
As for Comstock Capital Corporation, they have now actually changed their name to Comstock Metals and one of our properties in the Uruachic Camp called the Corona Property is under option to them. They can earn 60 percent by doing work and paying us and then they can earn another 15 percent for doing a bankable feasibility study which gives us 25 percent and the ability to go to the bank for our share of the capital costs. Their work is going quite well and they’re looking to go public right about this time.

Does Golden Goliath plan to do beyond exploration and development and get directly involved in mining projects?

Not at this time. Our mandate really is to develop our portfolio properties and bring them up to the resource calculation or reserve calculation stage. We can deal with mining in the future but our mandate is really an exploration and development.

What is Golden Goliath’s financial situation?

Our financial situation is actually pretty good. Because we own all of our properties 100 percent we don’t have any payments to make and that allows us to keep our static burn rate quite low and we have about $1.5 million in the bank right now. That could last us a year and a half if we wish. The fact that we own the properties 100 percent also allows us the option of bringing in other groups to spend their money, such as Comstock. We have actually been offered additional financing very recently by a large company, but we declined at this time as it would be too dilutionary. But it is noce to know it is there if we want it.

Talk us through recent exploration activities and results at the San Timoteo, Las Bolas and Corona Prospects please.

San Timeteo, Las Bolas and Corona are all properties within the Uruachic Camp which I mentioned is 15 by 25 kilometers. The town of Uruachic was founded in 1736 and it lies sort of in the middle of this area. The San Timeteo area is just north of Uruachic, there are numerous old workings there. In the last year and a half we have put in about 55 drill holes and we have developed and rehabilitated a major underground tunnel called San Martin. In San Martin in the underground workings we got a 10 meter section grading 6.7 grams of gold and 142 grams of silver and 8.5 metres averaging 1.14 grams of gold and 429 grams of silver. Another 20 meter section grading 5.96 grams of gold and 202 grams of silver and then a 4.5 meter section with 1.1 grams of gold and 1545 grams of silver. So this is very high grade material, this is what the old timers were mining. We have done surface drilling as well – we got 21 meters of 7.1 grams of gold equivalent, 4.6 meters at 267.6 grams of gold. Another 4.65 meters of 73.8 grams of silver and 1.6 grams of gold; so we’re getting excellent drill results from the surface and direct sampling from underground on San Timeteo. We are now looking for an underground drill so we can go in and drill those underground zones and follow them out to their completion in order to do our resource calculation.
At Las Bolas which is about 8 kilometers south west of San Timeteo, there are two areas of different styles of mineralization; a lower area close the river called manto style mineralization or horizontal blankets of mineralization and that’s about a 500 by 1000 meter area where we have 1.85 meters of 366 grams of silver and 1.15 grams of gold. We had a 0.15 meter section in one of these mantos that actually found 3090 grams of silver and 9.87 grams of gold and other similar sort of intercepts in this flat lying mineralized area. Further up the hill where the mineralization is more inclined and is structurally hosted there are many, many old workings. We have done a total of about 36 drill holes in this particular area. We got 6 meters of 328 grams of silver in one of those holes, we have underground sampling for instance at the Frijolar 2 (7.36) tunnel that we opened up this year with 56 meters at 343 grams of silver. Surface sampling of new road cuts has also returned values over 2,500 grams of silver per tonne. At Las Bolas there are many, many underground workings, too long to list all here and all the results. But it’s really a treasure house of gold and silver and when you add the two different zones together we are talking about an area that is 500 meters wide, 900 meters long and has a 400 vertical meter extent of mineralization so there’s great potential in that particular area and again we are working on a resource calculation.
Over at Corona, which is about 15 kilometers north west of Las Bolas, Comstock’s done detailed stream sediment sampling, chip sampling and they’ve got excellent numbers from the surface of 8.7 grams of gold over 5 meters, 814 grams of silver over 8 meters along with 22 grams of gold and 667 grams of silver over a half meter. They have now outlined a target area that’s about 6000 meters long and 200 meters wide with a 20 meter depth on it so they’re looking for a near surface gold and silver deposit. They’ve complete their fieldwork and now they’re in the process of taking Comstock public.

What can we expect from Golden Goliath in the next 12-18 months?

In the next 12-18 months we’re going to be working on our resource calculations, we’re going to have to be bringing in that electric underground drill for the San Martin tunnel and we’ll probably want to use it also at Las Bolas. The Las Bolas tunnel itself is a little bit narrower so we’ll have to do some underground flashing in order to make it a little wider in places in order to get the drill in and out. In both of these areas there is more detailed mapping and sampling underground needed to add to the resource calculation.

How is satellite technology helpful in identifying possible targets for Golden Goliath in the Uruachic district?

Satellite technology is useful at least to a certain degree. We’ve just finished actually doing what they call ASTER survey (Advanced Spaceborn Thermal Emission and Reflection survey). So they’re looking at using satellite technology at the reflectivity of minerals on the surface to identify clay minerals that are generated from alteration processes that helped also to do the mineralizing event. It’s good for zooming in on a larger scale looking at target areas; individual drill hole targets are too small really to determine directly from space images and that’s what’s done on the ground. But a very, very good first step.

What are the mining business and fiscal regimes like for a Canadian company operating in Mexico?

Actually the fiscal regime is essentially the same as in Canada – Canada, Mexico and the United States are all part of the NAFTA free trade agreement. Canada has a reciprocal tax agreement with Mexico, so it’s really no different for us working there or working here. They have a value added tax same as we do; here we call it GST there they call it IVA. It’s 15 percent in Mexico and we do get that money back from the Mexican government believe it or not! We apply, we have to have audited financial statements but we’re very fiscally responsible we supply all that data and the Mexican government gives us that value added tax back. So doing business in Mexico is fine I’ve had no problem at all. I don’t have any problems with mining property expropriation; more property has been taken away in Canada than in Mexico. It’s a very safe place to work and easy to get along with... you hear a lot of things about bribery and corruption; I don’t think it’s any more corrupt than Canada or the United States. We do not pay any bribes and never had a real problem with it.

What would you like better understood about Mexico and the Mexican way of doing business by the investment community in North America?

Well I think that was partly covered by my last answer but I just want to re-iterate that property titles are very secure in Mexico, our lawyer in Mexico is actually the former Ambassador to Canada and his office secures all of our titles and keeps records of those titles in Mexico. As I said, you don’t have to deal with corruption, you don’t have to pay bribery or anything like that. It’s a very safe place to work. I think the most important things to know is that your titles are secure and the Mexican government plays straight with you. If you make a discovery and you want to take it into production there’s no problems, they’re not going to take a cut for the government. There’s no percentage of anything that goes to the government other than your taxes, which you would be paying here or paying there.

Do you have to be mindful of community relationships or social licence in Mexico?

Yes I think you have to do that anywhere in the world, it’s only common sense. In Mexico it’s particularly important because all throughout Mexico there are groups of individuals who live and farm on land and those groups are called Ejido and ejido lands are owned communally by that group, the surface rights that is, they do not own the mineral rights. In our case in the Uruachic camp some of the ground is privately owned and some of it is ejido ground but we get along extremely well with the ejido groups. We have no problem with them, they are very much in favour of what we are doing. They do no have the right to stop you from going and exploring on their ground but we pay them a small amount every month just for the right of access, just to help them out in their community, such as by building much needed roads, and to foster better community relations and so on. I do know of other companies in Mexico that are having problems with their local ejido group but we treat ours with respect, they know me quite well, I speak their language and we employ a lot of them. We are the biggest employer in the town and so they are all very much in favour of us finding and developing a new mine in their area because they all know that they will have a better standard of life. So I think it is important that you get along with those people and not only do we get along with the ejido but we get along very well with the local police authorities and the president of Municipality. They are all very much in favour of what we are doing and it makes life a lot easier for us.

What are your thoughts on the stock market in general and the TSX-Venture exchange in particular?

Well I’ve been looking out of my window and I haven’t seen anybody jumping of any of the local buildings lately but the market as everybody knows is very bad. I do follow my friend Ian Gordon, the longwave analyst, who predicted the current credit crunch and financial problems years ago and according to Mr Gordon we are now entering the winter phase of the Kondratieff long wave economic cycle. The last winter phase was also known as the great depression of the 1930s and I believe unfortunately that’s where we are heading. That isn’t necessarily bad for gold and silver though, as those metals tend to do very well in that type of scenario, whether it’s an inflationary depression or deflationary spiral. So the bad times might just be starting for markets in general, but I think the good times for gold and silver are also just starting and I think those metals will do quite well.
There’s a lot of people on the TSX that are into gold and silver and I’m very bullish on those. Ian is not so bullish on copper and other base metals but also at the same time, china has just announce this giant new infrastructure programme, they’re going to spend about $600 billion so that’s another market for copper and steel and a lot of the base metals.

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