Fuerte Metals Enters Yukon with the Acquisition of the Coffee Project

[Music] Listen, it's always a pleasure to get us across the table and record a conversation with Tim Orman because I have followed his career for, you know, since the beginnings of mining stock daily about almost 10 years ago. But he caught me by surprise here recently and CEO of Fortate Metals and they did a huge transaction acquiring the coffee project in Yukon. I did not have this one on my Bingo card, Tim. But my God, man, congratulations on this acquisition. Why coffee? Yeah, it was pretty interesting. You know, we, it was a funny story. I mean, I'd known about coffee. I went to school with Ira Thomas when she was an undergrad. I kind of followed that along and coffee seemed interesting. And then, you know, over the years, it kind of disappeared when Kamenak got swallowed up by Goldcourt and then Newmont came on the scene. I didn't really think about it much and then the guys at Trinity back a year ago said, "You guys want to look at coffee?" And I said, "Oh, yeah, I guess we could look at it if it's coming up for sale." Yeah, you know, don't know much about it and it's quite funny because our, our, our EVPX, Charlie Roncos, he had worked for Goldcourt until, until David Grofflo came in. And Charlie said, "No, I looked at that at Goldcourt. I didn't like it." And they said, "Well, let's look at it anyway." And the more we looked at it, the more we liked it. And we kept trying to think, "Well, we'll find something that's going to kill it. There'll be some issue, there'll be some metallurgy or environmental stuff or first nation stuff. Something's going to kill this thing." And we couldn't kill it. But we just kept looking at it going, "Wow, no, that works too. Oh, oh, look at that works as well." And this is really good over here. And we just got to the point where we were like, "We want to own this thing. We really want to own this thing." And it's such a nice deposit. Yeah, so three million ounces in their measure to indicate it. It's been classified to me. Newmer's times I've been up to the Yukon. I've flown over coffee, never been on the ground. But it's been told to me he's probably the best undeveloped asset in the entire territory. We can debate that or not. But tell me what you love about it so much. I mean, it sounds like he wanted to kill the idea, but you couldn't kill it. Pretty much, yeah. I mean, look, I've run Open Pit, Heatleach assets, as you know, at Fury Gold. And there we were operating at grade was probably 0.45 grams per ton, something like that. And people are building Open Pit Heatleach mines in the Andes at 0.48 grams per tonne grades. Coffee has a 1.15 grams per tonne grade. It's crazy. It's got to be one of the highest grade Open Pit Heatleach operations that's not operations, but development projects anywhere in the world. And with that kind of grade, you can, gives you a lot of leeway. You know, you're not running everything close to the bone all the time. You're not trying to squeeze every last, you know, penny out of the design. And you can, you can build it the way it needs to be built. And I think that's what the Yukon needs. The Yukon needs really good, strong economic projects because there's been a bunch of projects there that have not been all that successful. And a lot of them have been marginal economic projects. And I think that's meant that companies are, you know, running them very, very close to the bone. They're not spending the money needed. And in some cases, they've gone bankrupt. And I think that's, you know, that's not great for the Yukon. But I think this is going to be the one that people are going to point to. And that's our goal. That's our kind of vision of success is people say, well, yeah, you can actually do mining here properly. And you can succeed and you can create benefits for the government and for the local communities and the first nations. And you can, you can generate returns for your shareholders. And it all works. And that's really, you know, that's where I think coffee shines. It comes out of cost, right? So you had to raise just under was a $60 million Canadian. You talked about the institutions or the individuals or whoever came in and supported this. Were you seeing your track record from previous operations kind of follow you into this and giving you the blessing? Or did you have to go out and find a new book? No, it was, it was pretty organic the way it came together. I mean, we had put four or two together this sort of a year before really with the aim at bringing in the management team and the backer. So, was on and Trinity and Agnico were shareholders already. And because we knew that if we put those two things together, we'd find a project that we could work on and then we'd be able to make success of it. And so when, and I think, you know, not by any kind of design, but we could not have timed that announcement better. It was Denver Gold Show. You know, it's always a good time. Gold price was going crazy. People were trying to invest in gold stocks. There weren't a lot of new stories out there. That's the thing that was just kind of the same old stories out there. People were looking for new ideas. And then out of nowhere comes this project that no one's even really thought about for 10 years. And really the investors came to us. You know, we had, I would guess we had an order book north of 300 million for a $50 million financial. And yeah, the most, I'm sorry you had to cut me back. I know, right? And even management got cut back on that one. But not yet. It's a nice problem to have. I will say. I've struggled through the lean years where, you know, you were scraping for every dollar. And that was a nice change. Yeah, absolutely. You know, the Yukon, especially a place for me. I mean, I cut a little bit of my teeth and learned a lot from investing in Yukon, visiting Yukon. And, you know, it's a wonderful place for a mine, for for for my exploration. Obviously, it's has its challenges in the last year. Some neighbors close to the coffee, the casino project is deep in the asset process and permitting. So, at least you should have a little bit of a playbook here going forward, you know, with how you continue to develop. But, you know, the community of Yukon is really, really important. Like, this is a very proud community. Whether it's, you know, in Dawson or Whitehorse or whatever, but the First Nations obviously, very dynamic there as well. And I know you just got your hands on this thing, but talk about, you know, how you're kind of merging those two, you know, the new company coming in with the project everybody knows. And, and, and, and, and reaching across into those communities and making those relationships already. Yeah. So, I'll tell you one thing that helped enormously. And I'm actually, I think maybe I would have been less eager to do the deal if this hadn't happened. But, the two key people from the Newmont Kaminak permitting and First Nations, you know, community relations team have joined us. They've come over. And they are now our Jenny Geertz Center Vice President of Sustainability and External Relations and Jasmine Dawson, who's our VP of permitting and environment. And, they have a long history in the Yukon, they've worked at Minto, they've worked at Kaminak, at Goldcore, at, at, at, Newmont. And they have those relationships. Because the Yukon is not a big place. There's, I think, less than 50,000 people in the Yukon. And so, a lot of it is personal relationships. And they have those relationships, they have that trust. And we made a big effort to kind of continue that relationship and to build those relationships. So, you know, I remember thinking about, well, where should we be when we do the announcement on September 15th? And, you know, we could have been at the Denver Gold Show. And I'm sure we've, you know, we've got lots of, you know, free beers out of that one. But, but we actually went to White Horse. And the very first meeting we had on the morning of the announcement was with the Toronto question. One of the first nations that we have an agreement with. We met with the Chief, we met with several of the counselors. They just happened to be in White Horse for a breakfast meeting. So, sorry, for some meetings. And we had a breakfast meeting with them, had a really good conversation with them. We made it very clear to them that we fully intended to honor all of the agreements that Newmont had put in place and the Goldcrum put in place. We wanted to work with them. We recognized the value. And the fact that we were there meeting them before we met government, before we met investors, before we met anybody. I think we were trying to send that message. And then the next day, we got in a car and we drove five hours to the town of Beaver Creek, Yukon. And we met the Chief and several of the key people at the White River First Nation, which is another First Nation that we have an agreement with on the project. And we spent the night there and had a great couple of meetings with them. And again, same message. We are fully committed to working with First Nations because we get how important that is in the Newcoma. And I think that helped. Obviously, we've had subsequent meetings with them and we're trying to be honest and open and transparent with them. And I think that's the only way you're going to really succeed there. And the same with the communities. I mean, I did a couple of media interviews with CBC and the Yukon News when I was up there and met with the politicians. And we've gone out and met. And now we're all going up to the White Horse next week for the Yukon Geoscience Forum, which is going to be, I think, a lot of fun. And we're going to need a ton more people up there. And we're looking forward to it. New government, too. Yeah. Yeah. I've met the new premier. I met him prior to the election. Yeah. And I've actually met all the political parties there. Again, it's a small place. Coffee, coffee is, I think, is the last great divestiture of Newmont, I guess you could say. It cleans the board. We knew a lot of those projects that they were trying to offload. And coffee was the last one. I think coffee was the last one. I think they're all done now. Yeah, I think so. Yeah. So, talk about what you need to do next. I mean, it's not something you can just go and start mining. Unfortunately, you've got a lot of work ahead of you. So, what is the strategy now, Jim? I mean, it's close. I think to being able to go ahead and start mining then a lot of people think, but yeah, there's still a lot of work to do. So right now, the most recent economic study on this was the 2016 Camenac Feasibility Study, and that's out of date. And a lot's been done since then, and so it's not really that relevant except in its broader parameters. So we're gonna be doing a Feasibility Study. The plan is to have a Feasibility Study done by the end of next year, so the end of 2026. By that point, we should have all of the remaining permits in place, and we should be well in our way to having a mine finance package in place. And that will be one year. And that will let us, because all the engineering and everything's been done, all that test work. I didn't even know the permitting process was going on. So we are, yeah, they're through Yes-Up. They've finished the Yes-Up process and got their approval in 2022. Oh, I did not. So that's the one that Casinos just started. Yeah, so that's done. And the quartz mining license and the classy water license were applied for in 2023. Now that process has been slowed a bit by the whole Eagle debacle, but that's starting to speed up again. And so we're looking to get those permits next year. And we're also looking to get road permits, because we want to start building the Northern Axis Road next summer as well. So get the road built, do some of the early works that were permitted for, get the Feasibility Study done, get all the permits done, get mine financing in place, the goal, and it's probably fairly ambitious. The goal is early 2027, let's make a construction decision, and if it's positive, let's start building that summer. Wow. So it's actually a lot closer than people think. I mean, Galtcore and Galtcore probably invested over $300 million into the project in the 10 years that they had it. And that it's not so much the money, it's the time that it saves us. That 10-year window where all that kind of grind of engineering and test work and permitting and negotiations and everything went on. Yeah. We're benefiting from that. So I mean, anything with the drill, where are you going to plan to do in 2020? Yeah. So we are going to drill. We're going to have a fairly healthy drilling program this summer. We're actually balancing about how many beds do we have in camp? And how many people can we get? And of course, we've got the jawl just want them, the engineers want them, the construction guys want them. So that's a bit of a balancing act right now, but we will be doing drilling up there. It's unlikely that we'd get drilling done logged into the labs, assays back, remodeled in time to make it into a Feasibility for the end of the year. It's just the timeline doesn't work. So, but what I'd love to be able to do is come out with the results of a Feasibility study at the end of next year. And then early in the following year, go, oh, and by the way, remember that Feasibility, well, we've just added another half million or million ounces to the MNI. So that's the goal. There is always have something moving forward there. Yeah. So how much cash do you now have in the bank? Do you have enough to get you through that updated? We definitely have enough to get us through the updated technical report and do a lot of the drilling we want to do. If we want to build that road, if we get the permits for the road, we don't have enough for that right now. But there is government money available. There's something like half a billion dollars in the resource gateway funds available to fund exactly this kind of thing, roads into resource rich areas. So there's potential to use some government money. There's potential to go back to the market to raise a bit more cash. I don't think we need huge amounts of cash, but we'll see how it goes. And again, there's no point in raising money if we don't have the permits in hand. So that's going to be key. You-- Right before this, you sold one project, El Cofre. Yeah. Are there other projects that are in the portfolio now that you can leverage for a sale and bring more cash, or is that even on the table? Yeah. We have two projects in Mexico right now, Christina and Yacquara. And then we have a really interesting project in Chile that's super early stage, like not a drill hole in it, called Pleus Aton. That's a big copper porphy project surrounded by a tech new-mount copper gold porphyry JV. That one, I think-- I'd like to get a partner in on it. It's expensive to work in Chile and the Andes on a big copper porphyry. I mean, one hole's hundreds of thousands of dollars. So we'll keep looking for a partner on that one. In Mexico, we're just finishing up an internal resource estimate on the Christina project. That's our precious metals project in Chihuahua. And then we'll see where do we go with that. It's a cheap place to drill. We can always-- if we want to do some work down there, we can. It doesn't cost a lot. It's not a huge distraction. There's a whole separate team that runs the Mexican exploration thing. And then Yacquara, that one we need to figure out what to do. That's a copper project. Interestingly, right beside Manera Alamos is Santana. Mine, like literally right beside it. So I don't know. Maybe there's something to do there. But we'll see. There. OK. It's-- you know, you can't paint me more of a mine builder and operator, not necessarily a one who wants to be exploring. Is that fair to say? I mean, most of my career up until Fiori was as an exploration geologist and going out and looking for things and finding things. Yeah, but did it suit you? Did it suit you, Tim? You know, I'm wearing a suit now, right? Yeah. I mean, I got to admit, I fell in love with the whole producing side of things when we had Fiori gold. And it gets so neat to go down and watch a mine evolving. And sometimes I'm like a little kid watching those big yellow talker toys drive around and think, wow, this is all working. Yeah, it's very cool. I'm extremely happy for you. I'm extremely happy that Yukon gets you. You know, you get to kind of work with them. I mean, I think it's going to be a match-- a very productive match, I think, for everybody up there. And so congratulations so much. And I hope we can continue to follow the story of 2026 that seems to be great. Thanks, everyone. All right. Fortain Metals does trade on the TSX venture with the symbol FMT and on the OTC QB with FUEMF. The information presented should not be considered investment advice. 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