Mark Campbell | The Rodruin Project Looks Like a Large, Bulk-Tonnage, Surface Gold Deposit w/ High-Grade Shoots

In this interview, Mark Campbell, Aton Resources CEO, provides an update on the Rodruin project (aka “Lost Mountain of Gold”).  At the time of the interview 36 of 50 reverse-circulation drill holes have been reported from the recent drill program.  Rodruin appears to be shaping up to be a large, bulk-tonnage, surface gold deposit with high-grade shoots.  Mark also shares regarding the numerous, and quickly coming, positive changes to the mining code in Egypt.

The Rodruin prospect was discovered in December 2017 by Aton geologists (see news release dated December 14, 2017), and is located approximately 18km east of the Company’s Hamama West mineral deposit. Field mapping and sampling has indicated the presence of ancient mine workings and extensive gold mineralisation over an area of at least 700m x 400m at surface. Mineralisation is associated with a sequence of carbonate and metasedimentary slate and greywacke rock types. Abundant visible gold has been identified in hand specimens from surface outcrops, and ancient dumps and underground workings, with individual selective grab samples assaying up to 321 g/t Au. The main series of ancient underground workings in the Aladdin’s Hill area has been sampled to approximately 40m below ground level, indicating continuation of the surface mineralisation at depth (see news releases dated February 6, 2018, March 5, 2018 and April 16, 2018), and drilling has now confirmed the presence of high grade gold mineralisation with individual samples returning assays of up to 221 g/t Au over metre intervals (see news release dated October 1, 2018). Drilling results released to date from Rodruin include intersections of 36m @ 12.47 g/t Au from 5m (hole ROP-003, see news release dated October 1, 2018), and 163m @ 0.90 g/t Au from surface (hole ROP-017, see news release dated November 12, 2018).    TSX-V: AAN   &  OTC: ANLBF


Bill: Happy New Year, and welcome back to another Mining Stock Education episode. I’m Bill Powers, your host. Thanks for joining me. Well, to kick off the new year, we’re going to be getting an update from Mark Campbell, the CEO of Aton Resources, on their Rodruin exploration program, as well as get an update on the significant progress that’s being made in Egypt regarding mining reform. Mark, Happy New Year, and thanks for joining me.

Mark: Well, happy New Year to you too, Bill, and thank you. We’ve had quite a very strong previous year, and Rodruin being the exciting new discovery that we’ve made. We had, when you think about it, back in December, the beginning of December of 2017, we had just found Rodruin, but it was so remote and so rugged that it was very hard to access. We had to build a road. So we built a four and a half kilometer road up the side of a mountain to get there. We’ve got a lot of ground, boots on the ground exploration. That has led us to being able to start our drilling program, which we began at the end of August of last year. We’ve drilled 4,100 meters, and we’ve had very good results.

There’s a press release that came out today on some more of the results from that drilling program. Again, it just keeps showing the extension of this mineralized footprint, and supports what we’ve been saying. That is that we’re looking for a large boat linable target that has good grades and high grade shoots in it. That continues to be the case. We’ve had one hole, which had 40 meters at one point, three grams a ton, gold, and 11 meters at 5.20 grams a ton. So we are getting some good grades, and these holes continue to be mineralized from surface. It’s very, very exciting. For a discovery of an area that really hadn’t been worked for 1,600 years or even known about, is even more extraordinary.

Bill: Absolutely. You’ve drilled with the current program, the reverse circulation program. You drilled 50 holes, 36 have been reported as of today.

Mark: That’s correct.

Bill: You even had some individual selective grab samples, as saying up to three-

Mark: Channel samples, yeah.

Bill: Yeah. Up to 321 grams per ton, gold. That would be your best one.

Mark: We have those. We’ve had those. Those are on the North ridge. If you think of looking at Rodruin like the letter “Y”, you have a central ridge that goes up, and then splits into two. You have the South ride and the North ridge, and this is where we found the ancient mining sites. Those on the northern side, where there again, is just extensive workings, ancient workings. We did take samples, one in a channel sample at 321 grams a ton. That’s correct.

Bill: And the footprint. You talk about the footprint that’s been defined so far, what size are we looking at here?

Mark: Well, we’re talking about 700 by 400 meters, down to a depth of about 200 meters. That is only in this first pass. A lot of the holes would have been fairly, within the same areas, but we’re going to come back now, and continue to expand our drilling opportunities, operations. We’ll also go now and start looking at putting some holes in on the northern side, the Northern ridge. One of the problems with the Northern ridge, and as I mentioned earlier, the terrain is very rugged. So it’s very steep in some places. So getting up there, right up to the top with a road will be very, very challenging.

Bill: As you build the road, then you’re going to be taking channel samplings and reporting those along the way as well.

Mark: Absolutely. We will take that. We’ll sample all the way along, as we did on the South ridge. We’ll build drilling paths, and then we’ll move the rig over there to start drilling some holes there. I know a lot of people ask us why we’re drilling RC, and not diamond. We will come back and drill diamond. There’s no doubt about it, but with all the voids and the ground, the consumption of water will be just enormous. We would have to truck the water in, in the tanks, then we’d have to pump it up four and a half kilometers, all which are doable, but you’d just be using a lot of water. We want to have really good targets that we feel A, we want to understand the structure better, and also B, give us the best bang for our buck because it’s going to be expensive to drill with that water consumption.

Bill: When I spoke with your exploration manager, Javier, he said that you could do the RC drilling to about 300 meters, I believe.

Mark: That’s correct, yeah.

Bill: With like 500 PSI of air pressure, which is significant.

Mark: Oh, yes, it is. I mean, it’s got a very large compressor on it. So it’s got the oomph to do it. The real reason that we haven’t gone down that deep is they only had 200 meters of pipe. Once there is some more pipe in some of those holes, we can extend.

Bill: Yeah, that makes sense. I mean, if you’re going to spend the money, haul the water out there to do diamond drilling, you want those clearly defined targets that are not going to hit the ancient voids, where the ancient mine workings because you’ll just lose all your water in those.

Mark: Oh, you will hit them, but the fact of the matter is that you want to make sure that what you’re drilling is worth spending that money, as opposed to spending a lot of money trying to figure out what you’ve got. It’s easier to figure out what you’ve got with RC without having to worry about the water, and then come back in a much more targeted approach to drill the diamond.

Bill: The deepest known mineralization intersection so far would be 200 meters?

Mark: 200 meters. That’s correct.

Bill: Okay. We’ve got a 700 meter by 400 meter footprint.

Mark: By 200 meter depth.

Bill: Okay, and 200 by depth. That’s the model we’re working at. We have some significant high grade samples. I believe that first exploration hole that you released on November 12th, that was at 163 meters at 0.9 grams per ton, gold. That really got the market excited.

Mark: Yeah, I mean, I think, as I said, I mean, it’s without a doubt, the excitement is that you do have this wide mineralization. Most all these holes are mineralized from the surface, they. As I say, you’re getting good grades plus some high grades shoots in there. Plus, we have some good results in zinc, and some in silver as well. It’s so far so good. Certainly, every time we look at these SAs, I mean, it’s the hits just keep on coming. It’s quite exciting.

The other thing we’re going to do, coming back in the New Year, we don’t talk about this much, but we do have 17 other targets. At some point, we will want to take a break to just figure out what we’re doing at Rodruin, refine our drilling model, and then go back. But in that interim, instead of just having a rig sit around, we can go out, and put some holes into some of these other areas just to sort of start developing the value in our exploration portfolio.

Bill: Those 14 other holes that are still to be, the SAs are still to be release, should we expect those in the next month to two months? What’s the timeframe on those?

Mark: No, no. We should get those out by the end of the month.

Bill: End of the month, okay. Then the next potential drill program would start what time in 2019?

Mark: Well, to my mind, our target in this would be somewhere around the middle of this month. The rig’s on site. So I mean, it’s just a matter of getting the crews back in and the geologist. We’re just, at the moment, refining where we want, what our program’s going to be because we need a bit of time to mull some of this stuff over, and then we’ll come back.

Bill: And so, 2019 will be focused again on Rodruin.

Mark: Yeah, Rodruin predominantly with doing some other work. There’s also our Hamama development project. We will probably have to go back in there and drill some RC holes in Hamama West, just to list our resource from inferred indicated.

Bill: Now also what’s exciting as you and I were chatting is what’s going on in Egypt concerning mining reform. Can you speak about your first hand knowledge of the developments here?

Mark: Sure, sure. Yeah. I mean, as we’ve discussed in the past, Egypt had a very, very draconian, if I could say, mining regime. This goes back to 1982 when, although there was no activity here, the government decided to say, “Well, okay, oil and gas are extracted. Mining’s extracted therefore, if it works for oil gas, that framework is going to work for mining.” But that’s not true because even though they’re extractive, that’s where they begin and end in similarity. It’s like trying to compare Uber to British Airways. I mean, they may be in transportation, but they’re completely different businesses.

What has happened in the last year, which is very exciting, President Sisi said, “Look, why is there only Aton Resources here and Thani Stratex here, and then one mine, Sukari? It’s the last mine built in 90 years or plus. What’s going on?” The minister of petroleum is a very smart guy, said, “Right.” So he got in Wood Mackenzie, said, “I don’t know anything about mining, but I know some people who do.” Wood Mackenzie had sorted out the Ecuadorian mining industry, and so they brought them in. They gave them an overview of what was wrong. They’ve given them what they need to do and what is important, and how to get the balance between what the government wants, and what industry wants. I mean, nobody in these things ever gets everything they want, as much as I’d love to get everything I want. But to get the balance right, so that you do attract investment.

Egypt and the Arabian-Nubian Shield in general, but Egypt in particular is highly underexplored. There’s not a lot of data because when Nasser came to power, it just fell by the wayside. Oil and gas kept going, and expanded, and became a thriving industry, but let’s face it, I mean, Egypt’s been in the oil and gas business just slightly less time than The United States, so you’re talking about Shell being here for over 120 years. It is exciting that they have recognized this. They have become very proactive on it. We, at the American Chamber of Commerce in Egypt, which is the strongest lobbying body int country, we had a meeting with the minister, the Mineral Exploration and Development Committee. We had a meeting with the minister the other day, which went really well.

He has appointed a new chairman of EMRA. EMRA are the part of the Ministry of Petroleum that actually looks after hardrock minerals, so mining, industry minerals. Again, I met with him just before New Year’s, really, really exciting. Very, very open, very switched on, understands what is necessary to attract foreign investment, and is very keen to work with industry and listen to what we have to say, and create a forum to help him with this. Wood Mackenzie will be back this month. Again, back working on all of this. I think that all in all, the future here in Egypt is very, very exciting, which is very good for us.

Bill: Absolutely. That’s what I was going to relate it to. Aton, you mentioned, that you’re the only publicly-traded gold exploration company right now in Egypt.

Mark: Any kind of exploration company.

Bill: Then also, this would help the future development and ultimately production of any mineral project that you would progress to that point because one of the things you hit on with in our first interview together was that 50/50 mandated JV with the government, which is not attractive, and it hinders your ability to find a major miner, if you wanted a JV with a major miner. But that’s one of the things that should be removed with these reforms. Is that correct?

Mark: That’s correct, yeah. Also too, they’ll get rid of this JV, and they’re going to tax, rent, and royalty, a much more understandable and widely accepted framework. You’re absolutely right. It not only cuts into the economics between mining, and oil and gas are completely different. And so, it cuts into your margin. Doesn’t mean you couldn’t make some money out of it, but I mean, you really aren’t going to make a lot out of it. And that’s fine maybe for a small company, but not so hot for a bigger one. Again, this idea that you have to have, you want to bring in partners to help you develop these areas.

Mark: It’s the reason why Centamin is a mining company today, not through planning going back 20 years. It was down to the fact that everybody loved Sukari, and you could see what that’s become, and why wouldn’t they like it? But ultimately, people like Gold Fields, and Anglo, and I Am Gold, and people that looked at it, couldn’t work out how they make money out of it. Because even if you gave them 50% of yours, that’s still only 25% of the hole. It was long overdue that this is coming. They finally, you have a president, who is very pro-business, very pro-foreign investment. You have a minister who, again, is very, very much keen to see this sector grow and develop. Then, the chairman of EMRA, who is the third part of that stool, and he too is in that camp. You’ve got all the right ingredients to really make this sector fly.

Bill: When should we expect the finalization and official approval of these positive reforms?

Mark: They’ve moved very fast. I mean, one of the things, I’ve been involved with mining here now. This will be in 2019, will be my 24th year here, just in mining. Nothing ever happens quickly here. On the other hand, what I will say is that going from where we were at the beginning of March when they hired Wood Mackenzie to where we are today, for Egypt, is light speed. I would say that we’ll probably see a shorter rather than longer period of time, an announcement saying what their framework is. Then that’s when you get down to things like the executive regulations, which have a lot of detail. So what would rent be or what … By and large, I think that in terms of an overall strength and plan, I think that sooner rather than later, in terms of an announcement.

I mean, one of the things that was amazing is the minister got up at a business breakfast meeting, and said, “We’re going to get this done in three months.” They never say that. He said, “Look, we got it wrong. We’re oil and gas guys. We’re not mining people.” These are just so unusual for Egyptian ministers, sitting ministers to say publicly. It is a complete tectonic shift in attitude.

Bill: Aton trades on TSXV under the symbol AAN, and on the OTC, if you’re in The States, under the ticker symbol, ANLBF. You can find Aton on the web at That’s A-T-O-N There, sign up for the email list, and you’ll be alerted as soon as there’s a press release that comes out. Mark, any concluding thoughts or financing opportunities you want to let the listeners know about?

Mark: Well, I’ll tell you, we’ll certainly be coming back at some point for a financing. I mean, as a junior miner, if you don’t expect that, then you’d always be surprised, but we wanted to be sure that we had, before we do that, we like to give people at least some comfort. I think we’ve done that with the results at Rodruin, plus what we have at Hamama. I think also importantly is that this change in the mining regime and the interest. We already get calls now from people saying, “Can you tell me about Egypt? We’d be interested in looking to coming there.” I’ve met with small companies, exploration companies that have actually come here to meet with the government, and taken some data away, and what have you. In my mind, that is really, very, very exciting. We’ve got a lot of drilling to do. We want to drill 30,000 meters. We’ve got a lot going on in the coming year, and we think that between the two, it will be a very exciting time for Aton.

Bill: Well, Mark, thank you for joining me to start out the New Year. We’ll be definitely tracking this story and I look forward to having you back again to give us a further update.

Mark: Thanks Bill. I really appreciate and happy New Year to you too.

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