John Kaminsky, managing director & CEO, exclusively joins Proactive Q&A Sessions™.
PROACTIVE INVESTORS: Welcome John.
First of all, how what attracted New Gold to farm-in to Rimfire’s Fifield tenements?
John Kaminsky: New Gold is a gold-producer and developer with a market cap. of CAD$2.7 billion, and it likes what it sees at Fifield.
New Gold is already familiar with NSW as it operates “The Peak” mine at Cobar.
The interest in the Fifield area is drawn through the geological similarities to their producing “New Afton” gold-copper-silver mine in Canada, which in turn has strong similarities to the Cadia and North Parkes copper-gold provinces, also in the LTZ, within NSW.
Mark Petersen, New Gold’s Vice President, Exploration, is on the public record stating:
“We are excited to work with the Rimfire team as the Fifield Project demonstrates large-scale, world-class discovery potential in a geologic setting very familiar to us.”
Rimfire believes that the presence of high grades of gold and silver (best intersection: 14 metres at 24.4g/t gold with 26 metres at 155g/t silver at the Sorpresa resource; and 4 metres at 6.5% copper at the Eclipse trend area) demonstrates the capacity of the Fifield area to yield impressive outcomes.
This has certainly been noticed by New Gold and others.
Can you outline New Gold’s deal and spending requirements, including the time frame, and do they have an option for additional investment?
John Kaminsky: During numerous detailed visits to Fifield we have established a very strong respect for the New Gold technical team and their ability to add value to our foundation at Fifield.
We look forward to working with them over the coming years.
The deal has some exceptional terms, not seen in other farm-in arrangements noted in the market, and affords Rimfire great flexibility.
Firstly, an investment of A$0.5 million was made directly into Rimfire.
Additionally, New Gold must spend A$2 million within the first 12 months, with no withdrawal rights.
It must then have spent a total of A$7 million within the first 3 years to earn a 51% interest, or withdraw with no interest.
During this period of 3 years, New Gold will provide 15% of expenditures directly to Rimfire, to spend at Rimfire’s total discretion.
This is a huge compliment and in recognition of Rimfire’s world class work to date.
This gives a capacity to prospect new mineralisation discoveries at Fifield, in parallel with New Gold’s work in the project area, during the partnership.
New Gold can extend their interest in the Fifield projects, with additional expenditure of A$5 million giving an interest of 70% (for an aggregate spend of A$12 million).
Should the Sorpresa gold-silver resource be part of a mining operation an additional payment of A$5 million would flow to Rimfire.
Rimfire also has the option to spend an additional $3 million on its own account as a credit to the project area, this enables flexibility for completion of some Sorpresa scoping work, if appropriate.
The emphasis of the deal is to get dollars spent into the project, and maximise the potential for multi-million ounce gold equivalent discovery outcomes that can go into development.
Moving to the company's Sorpresa gold silver discovery, what are the next exploration steps and ultimately what is Rimfire's strategy at the project?
John Kaminsky: Sorpresa represents “proof of concept” that greenfields high grade gold-silver deposits can be found at Fifield, previously undetected, and at surface.
We have drill tested less than 10% of the known available Sorpresa style geology.
We believe that considerable discovery growth opportunity exists in the “7 kilometre x 2 kilometre Sorpresa Corridor”, and this will be pursued in the New Gold partnership.
Our vision is to see Sorpresa included in a larger resource inventory, through additional discovery, and for this to be brought into a mining operation in due course.
We will also look closely at the existing Sorpresa resource, and assess its economic merit.
What is Rimfire’s funding position and where will this be allocated in the near-term?
John Kaminsky: Rimfire retains a very healthy financial position by comparison, in the junior resource sector.
With A$3 million in cash, plus a substantial funding stream available through the New Gold partnership, it enables the focus to be on the project outcomes, rather than attracting capital.
Expenditure priorities will be determined with New Gold, aiming to complete geology and area interpretations, through an initial review.
This is well advanced and overlays a solid foundation already in place.
District wide surface sampling will be ongoing, whilst conducting more geophysics, including detailed Magnetics/Radiometrics, possibly EM/IP, and gravity.
We have a known association to mineralisation at Fifield with some of these techniques already.
This process will generate the priority targets for testing with revers circulation and diamond drilling.
We already have some targets drill ready with permits issued.
The areas of focus are likely to be the 7 kilometre x 2 kilometre Sorpresa Corridor including Fortuna Area, and the Copper Corridor at Eclipse-Yoes Trends to Ben Hur area.
The objective is to deliver a major opportunity for Copper-Gold discovery.
Finally, why should an investor consider adding Rimfire to their portfolio?
John Kaminsky: Fifield is within the LTZ, and is the right location for world class discoveries.
This is Rimfire’s and New Gold’s view.
It should also be noted that our immediate district will attract significant investor interest in the coming years, with possible development to the north of Rimfire, including nickel, cobalt and scandium plays, through CleanTEQ.
Rimfire has an established discovery track record with Sorpresa Gold and Silver Resource providing important validation for proof of concept for high grades in greenfield discoveries at Fifield.
There is a solid leveraged upside position to the discovery potential.
Rimfire has a strong funding and financial position, through its partnership with New Gold, a well-credentialed mid-tier gold-copper explorer, developer and producer.
New Gold provides a great due diligence proxy on the large potential we both see at Fifield.
New Gold’s obligation for a A$7 million required spend to earn any interest in the project, sets the commitment bar very high at Fifield.
The partnership agreement structure offers no downside for Rimfire shareholders and de-risks the way forward for investors.
The regular anticipated newsflow, and Fifield’s history of producing noteworthy results should provide the catalysts for stimulated interest in Rimfire’s progress for a number of years.
PROACTIVE INVESTORS: Thank-you John.