Source Exploration
(TSX.V: SOP)
Brian Robertson, CEO
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Source Exploration Corporation is engaged in the acquisition, exploration, and development of mineral properties. The Company is in the process of exploring and developing its mineral properties. In January 2008, the Company setup a wholly owned subsidiary Roca Verde Exploración de México, S.A. de C.V. (Roca Verde) in Mexico. On March 4, 2008, the Company and Roca Verde, the Corporation’s wholly owned subsidiary in Mexico, signed an earn-in agreement with Sterling Mining Company (Sterling) and Sterling Mining de Mexico S.A. de C.V.(Sterling Mexico) regarding Roca Verde’s right to acquire interest in San Acacio project.
TRANSCRIPT
WSR: Good day from Wall Street. This is Juan Costello, Senior Analyst with the Wall Street Reporter. Joining us today is Brian Robertson, CEO of Source Exploration, and the company trades on the TSX Venture and the ticker symbol is SOP. Thanks for joining us today, Brian.
Brian Robertson: Thank you very much. It’s a pleasure to be here.
WSR: Getting right into it, let’s talk about the commencement of your diamond drilling program at the San Acacio silver project.
Brian Robertson: Certainly. The program just got underway last Friday, and it’s basically a 2,500 meter program and we are looking at the extension of the ore zones or the mineralization at depth on the San Acacio property. This is an important program for Source and we want to see if we have the downward extension of the mineralization that was mined previously on the property.
WSR: So give us a little bit of historical context on the property.
Brian Robertson: This is a property that goes back some time in history. It actually goes back to 1546 when the Spaniards discovered a property at Zacatecas in Central Mexico and actually their mining was going on or certainly some work was going on by the indigenous people in that area recovering native silver prior to 1546. Extensive mining carried out in the 1700s. This was certainly one of the richest, most prolific veins in the Zacatecas area. And so there’s been — it’s seen some extensive mining — basically, mining development took place down to about 330 meter level. That’s near the bottom where the Purisima drainage tunnel is located. There was difficulty mining below that level because of drainage issues, and keep in mind that this was back in the 1700s where they did not have the technology of pumps that we have today. So there has not been mining below the 330 meter level and that’s the area that we want to look at.
WSR: Great, and so today how is your relationship with the citizens of Zacatecas?
Brian Robertson: It’s actually quite good. We are working with a local firm in Zacatecas who are quite familiar with the people in that area. We’ve had some delays on land rights issues. We have resolved some of those; some of them still remain to be resolved, but are certainly moving forward and we are now at a point that we can start the drilling program.
WSR: So talk about some of the market trends right now as far as silver and how well positioned Source Exploration Corp. is to capitalize on them.
Brian Robertson: I think there is a very unusual situation out there right now for silver and certainly for precious metals. Obviously there is a lot of interest coming into precious metals and silver is a very unique market. It’s not as large as the gold market but it has some very unique features into it. We’ve seen significant increases in both gold and silver prices and a lot of people believe that there is certainly more leverage to the silver price and to the gold price and I certainly believe that to be true. In terms of Source Exploration, we have an excellent property, a long history of mining. There’s been over 180 million ounces of silver mined on this Veta Grande vein system. We also have a very small market cap basically — 23 million shares market cap, and that of course provides a lot of leverage to silver and for development and drilling program at Zacatecas.
WSR: What makes the company unique from some of the other players in your sector?
Brian Robertson: I think we have a unique property. This is certainly one of the richest, most prolific vein system in the Zacatecas area. We have a small market capitalization. We, I believe, are certainly underpriced in terms of share price in the market. We have been affected by the downturn in the market and some of the delays in getting this program underway. There’s been a lot of activity recently because of the start of the drill program and I think we can look forward to some results from this program.
WSR: You took over from Abraham Drost about a month back as new President and CEO of Source Exploration. So perhaps you can walk us through your background and experience as well as that of some of the key management team.
Brian Robertson: My background is very strong operating background. I’ve operated mines in Canada as well as overseas. I’ve been involved in both open pit and underground mines, built mines. I’ve operated large open pit operations and involved in various deep shaft sinking operation in South Africa. Recently, I was President of Nuinsco Resources and Victory Nickel; spent two to three years in those positions. I’ve been involved in a number of other companies and involved as a Director on other companies. So we are fortunate that we have a very experienced group on the Board. Abraham Drost is continuing as a Director for the company and he brings a lot of experience in this property. Ewan Downie is a Director of the company and he has extensive experience in exploration companies. We also have financial people on the Board, Robert Tyson. We also have people who are operating mines in Mexico, Wayne Moorhouse. So we have a, I believe, very well-rounded Board and a very strong management group.
WSR: What are some of the goals that the management team has set in place for the next year?
Brian Robertson: Our primary goal right now is to do a drill program at San Acacio on the Veta Grande vein system to look at this extension to depth of the mineralized areas. We are also looking at the open pit potential in this property and we are also looking at the possibilities of production from the material that’s available on surface. So those are the key areas. We are also looking at other properties both in that area as well as in other areas.
WSR: In terms of M&A, would the company look for some acquisitions over the course of the year?
Brian Robertson: That’s certainly part of our program and we’ll continue that. We’d like to see things that would sit well in this Zacatecas area. We think that that’s an outstanding geological area to be working in, but we will also look at our other opportunities that are outside of that area.
WSR: In terms of investors, Brian, do you think that right now, investors understand the general direction and message and story of Source Exploration?
Brian Robertson: I think the message is starting to develop in the sense that we’ve started the drill program. There are obviously other things that we are working on and as we move forward, there will be news coming out on that, but I think there has been a long wait to get this drill program underway and now that has started, people are starting to see some of the momentum.
WSR: Great. Well, once again, joining us today is Brian Robertson, new President and CEO of Source Exploration Corp. The company trades on the Toronto Stock Exchange Venture — TSX Venture. Ticker symbol is SOP and currently trading at $0.25 a share. So, before we conclude Brian, just to kind of rehash everything, what are some of the key reasons why investors should consider Source Exploration Corp. as a good long-term investment opportunity?
Brian Robertson: I think for a couple of key reasons. One, the fundamentals are right. There is strong interest in silver. We are very focused on silver. Number two, we have an excellent property at San Acacio, and number three, we have a small number of shares out, so there is obviously some leverage in any new discoveries that we come up with. And, as I mentioned, we are reactivating this in terms of work that’s being carried out and we’ve got some plans for moving forward.
WSR: Great, and we certainly look forward to continue to track the company’s growth and progress as well as report on your upcoming progress on some of the projects and I’d like to thank you for taking the time to update our investors today, Brian. Always good to have a source on.
Brian Robertson: Thanks very much and it’s been my pleasure.
