Mega Precious Metals Inc. (MGP-TSXV)

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June 26, 2009 Issue

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Focused On The Red Lake Area Where President And CEO, James A. Rogers Has Twenty Years Of Experience, Mega Precious Metals Inc. Has Acquired High-Quality, High-Margin Exploration Projects

Company Profile:

Mega Precious Metals Inc. is a well financed Canadian-based mineral exploration company with sufficient cash to carry out all planned exploration programs on properties in Northwestern Ontario, Nunavut and the Yukon. The Company is committed to an accelerated growth strategy, and is backed by a team of experienced mining experts and a strong financial position. The Company is poised for rapid expansion through quick response to new opportunities and changes in the market. Mega’s common shares trade on the TSX Venture Exchange under the symbol MGP.

James A. Rogers
President and CEO

Jim is a professional geologist who graduated with an Honours B.Sc. degree in Geology from Lakehead University in 1979. Since graduation, Jim has been employed mainly with major gold mining companies and has focused on quality control, production and exploration. Jim’s last 5 years have been in Red Lake Ontario both as Chief Geologist at the Campbell Red Lake Gold Mine and most recently as Regional Exploration Manager for Goldcorp Red Lake Gold Mines. Jim has been a passionate team player in the revitalization of the Campbell Mine and in the consolidation and development of an aggressive strategic plan to grow the Red Lake District as a profitable and long life asset for Goldcorp.  

From 1994 to 2003, Jim was the Chief Geologist at the Homestake / Barrick Gold’s high grade Eskay Creek Gold and Silver Mine in British Columbia. Quality control and the elimination of waste from the direct ship ore was successful growing profitable production and an ongoing exploration program that included metallurgical testing lead to the building of an onsite gravity and sulphide mill which successfully added approximately 3 million gold equivalent ounces to the Mine Reserves.  

Jim started his career with UMEX in Savant Lake and in Pickle Lake at the Thierry Mine, but most significant to his early experience were the 14 years between 1980 and 1994 that he spent mainly as Chief Geologist at the Dickenson / Goldcorp Red Lake Mine in Balmertown, Ontario. In the early 80’s, Jim lead the geology team that gained an understanding of the complex higher grade resources that when connected by trackless equipment and mapped in detail proved to have predictable geometries that created a solid production base of higher grade material to keep the mine marginally profitable. In the mid 1980’s Jim’s team drilled the first holes on 30 and 34 level into the now renowned “High Grade Zone”. In early 1994 before leaving for B.C. Jim successfully secured financial commitment from top management to test the “Campbell Like” area in a proper and committed manner.

Moving to Thunder Bay was a family decision and I am thrilled to be given the opportunity to work with people and on projects that will allow me to have fun and contribute to making mines. I believe that working with open communication, a sense of urgency, teamwork and framing opportunities within the big picture will help me to be a part of future success stories.

Mining
Precious Metals
(MGP-TSXV)

Mega Precious Metals Inc.
401-1113 Jade Court
Thunder Bay, Ontario, P7B 6M7 Canada
Phone: 807-766-3380
 

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published - November 2009

CEOCFO: Mr. Rogers, what is the vision at Mega Precious Metals today?

Mr. Rogers: The vision at Mega Precious Metals is to acquire and work high quality, high margin exploration projects. We are looking mainly for gold, silver, precious metals. We are focusing in Red Lake, in my 20 year career there I have learned a lot about the people and the rocks, so we feel we can make good deals, acquire properties and make mines there. We have a lot of ideas on how we can find and pursue economic opportunities by pulling people, partnerships and economics together.

CEOCFO: What are the basic projects you are working on?

Mr. Rogers: We have two projects in Red Lake; the Headway is a deep high-grade target that we hope will come together in a similar way to the Gold Eagle story. The other area that I call North Madsen currently consists of the Laverty and East My- Ritt projects.

The Headway project lies about 2 km south of Goldcorp’s High Grade Zone and is a target that I have had many years to visualize. When I was the chief geologist at Dickenson/Goldcorp back in the old days, we first identified the high-grade zone target by projecting east-west dilation corridors and north-south stratigraphy to where they intersected and that is where the high-grade zone was first found on 30 level. I still have the sample that I wrote the paper on that discusses how structures and patterns observed on the small scale define and may be the key to finding large-scale structures. Our Headway target is at the intersection of the deep-seated northeast trending Madsen/East Bay trend and east-west deformation zones. The Confederation rocks at surface have good structure but are poor hosts for gold but theoretically based on dip and plunge of the unconformity, we believe that the deeper Balmer rocks make excellent host rocks when in intersection with good structure and thus potential high-grade zones. We are planning to drill two, 3 kilometers deep holes to test that theory.

 

The North Madsen projects are proximal to the old mining that was done back in the 1930’s. They mined approximately 680,000 ounces from the granodiorite host rocks. We have a number of showings on our project; we just released some news on our Laverty Dyke Zone, which works out to about 400 ounces per vertical meter. The channels average grade is in the 3.6 grams range over 6 to 10 meters wide, 210 meters long. We are starting to find a number of things that we believe could be high margin open-pit type zones. With Goldcorp Inc. in the area, the capitalizing of a separate mill would not be necessary. We have a couple other big anomalies to test, we have some good numbers, 7.7 grams over 11.2 meters and 21.5 grams over 3.1 meters to follow up on as well and numerous geophysical targets that look similar to these targets. The vision is a center of gravity that includes a half-dozen pits in the 50 to 150,000 ounce ranges, adding to that by consolidating the ground around us and pulling together a million-plus ounces of high margin open pit ounces.

We also have our Blue Caribou Copper Property in Nunavut which has an NI-43-101 resource of 2.8 million tonnes of 2.8 percent copper 0.06 moly and an ounce silver. There are infrastructure issues there but we believe if we can come up with 20 to 30 million tonnes in terms of the size that the deposit could be economic. There are synergies and partnerships with the other companies, first nations and the government that can help to enhance the economics of the region.

CEOCFO: What is the financial picture like for Mega?

Mr. Rogers: At the end of August we had $10.5 million. We are currently doing a flow-through financing, so by the end of October we will have approximately $15 million in the bank; about $8.5 of that are hard dollars and $6.5 of that would be flow-through dollars. We expect our spend in 2010 to total approximately $7m with at least $5.5m of that designated to be spent in Red Lake on both the Headway and the Laverty East My- Ritt projects.

CEOCFO: Are you looking for additional properties?

Mr. Rogers: Yes we are still looking for additional properties. We have picked up a couple grassroots projects; one in Birch Lake and one in Dryden. These are early stage pipeline projects where our exploration will consist of airborne geophysics and prospecting. In addition to claims adjoining our current projects we are also looking for a project that have a resource but still require underground advanced exploration to reveal the projects full value. My experience in complex vein deposits is that 70% of the gold is often found in 30% of the rock. You need mine opening and good solid mine geology to find and understand how to properly define the ore geometry and properly conduct a resource calculation; these mines are made, not found.

CEOCFO: Is it easier to find projects these days?

Mr. Rogers: There are many projects out there. I mean you still have to be fussy about it, but there are a lot of opportunities. There are many juniors that have been beaten down that are sitting on some pretty good ground, and because they have been beaten down they are unable to get financing.
 

CEOCFO: What is your two-minute take on the financial situation, the price of commodities and where you fit in there?

Mr. Rogers: Commodities are looking good. Certainly, we have been through a crash, but I think in all honestly that has cleaned out a lot of the garbage that has been out there. Gold is money; certainly all of the bailouts in the US are going to come into circulation at some point in the next couple years inflation, the falling American dollar are all going to contribute to precious metals becoming more of a solid base for investors as real money.

CEOCFO: Please tell us about yourself and the management team; it is a solid, experienced group.

Mr. Rogers: We definitely have a very solid and experienced group. Our management team consists of Jim Rogers, Gord Yule and Steve Filipovic.   Our board consists of Ewan Downie, Abraham Drost, Richard Patricio, Michael Sweatman and Mario Stifano. Combined we have many years of exploration, leadership, financial and mine development success.

I have thirty years in the business consisting mainly of twenty years in Red Lake and nine years at Eskay Creek Mine. Most all of my early years were spent getting dirty underground and learning the rocks. My more recent experience has been learning more about economics, people, partnerships and how to make mines. I am new to the junior space but I feel that my experience and desire to execute are strengths that I bring to the table.

Ewan S. Downie, President and CEO of Premier Gold Mines Limited is chairman of our board. Mr. Downie is President and CEO of Premier Gold Mines Limited. Ewan’s career was highlighted in 2007, by the $367M acquisition by Zinifex Limited of Wolfden Resources, a successful company in which Ewan founded in 1998. Prior to this, Wolfden Resources was the recipient of the 2004 NWOPA "Discovery of the Year" award for the discovery of the East Bay gold deposit, and again was honoured in 2005 for the discovery of the Bonanza gold deposit, in the burgeoning Red Lake gold camp. Additionally, Mr. Downie was the recipient of the prestigious PDAC "Bill Dennis Prospector of the Year" award for being a part of the team that discovered the West Zone deposit at High Lake.

Gord Yule, Vice-President, Exploration is a registered Professional Geoscientist (Ontario) with over thirty years' experience in the Canadian Mining Industry having taken numerous projects from "grass roots" to advanced exploration and development both as a regulator and as an explorer. He has an Honours Bachelor of Science in Geology from Lakehead University and is a semi-finalist in the Goldcorp "Gold Challenge", in the Red Lake Gold Camp.

Steve Filipovic, Chief Financial Officer holds an Honours Bachelor of Commerce degree, is a Chartered Accountant and has fourteen years of finance experience, the last eleven with publicly traded resource companies. Mr. Filipovic is controller for Premier Gold Mines Limited, and has been with the company since its inception in 2006. He was Vice President, Finance with Wolfden Resources Inc., became a Director and Chief Financial Officer of Zinifex Canada Inc. until his departure in 2008. Prior to joining Wolfden in 2004 Mr. Filipovic practiced as an Audit Manager with Ernst & Young LLP in their Oil & Gas group in Alberta and Mining & Metals group in Ontario. He held positions with Noranda Minerals and CIL Explosives prior to entering the finance profession.

Abraham Drost, Director has over twenty years' experience in the Canadian mining industry. He has a Masters degree in Mineral Exploration (1987) from Queen's University and brings considerable success in discovery, finance and mineral project development as former President of Sabina Silver Corporation, former President and CEO of Skybridge Development Corporation, former President & CEO of Source Exploration Corporation and President-elect of Sandspring Resources Inc. as it completes a qualifying transaction. Prior to this, Mr. Drost developed expertise in government and aboriginal relations, legal and environmental affairs with the Mines and Minerals Division of the Ontario Government.

Mario Stifano, Director is a Chartered Accountant with wide experience in corporate finance and business development. He has held senior positions at Noranda Inc., PricewaterhouseCoopers, base metal producer Ivernia Inc. and is currently Chief Financial Officer at Lakeshore Gold Inc.

Michael Sweatman, Director is a Chartered Accountant (British Columbia & Yukon) and principal of MDS Management Ltd., a Vancouver-based management consulting company founded in 1992. He currently serves as the President & Director of Pacific Coast Nickel Corp. and Chief Financial Officer of Marifil Mines Limited and Run Of River Power Inc. Mr. Sweatman has over 20 years of experience in public company management during which time he has served as a director or officer of several TSX and TSX-Venture listed companies.

Richard Patricio,Director is Vice-President, Corporate and Legal Affairs of Pinetree Capital Ltd., an investment and merchant banking firm listed on the Toronto Stock Exchange, and has several years of experience in the mining and resource industry. He is also a director of two other companies listed on the TSX Venture Exchange.

CEOCFO: What are the intangibles that lead to success?

Mr. Rogers: We are all about getting things done. We want to see things happen. You will see that when we say we are going to do something we are doing it. Certainly, Ewan is a great example of that in terms of what he has done with the companies he has had. Myself in terms of working with Senior companies, I was involved with the discovery of the high-grade zone. We made things happen, we kept the company alive during the lean years and Goldcorp is a thriving business today. At Eskay Creek Mine we looked very closely at the economics of the ore body and we managed to add about 3 million ounces of gold equivalent by looking at the metallurgy, questioning the process and changing the economics by understanding process. I believe that there are many ways to find and build economic models, we have to ask our selves what is working, what is not working, and how can we make it better.  I like to think out of the box or to build new boxes to think in, I see a lot of opportunity to make things happen.

CEOCFO: Would you tell us about the recent name change?

Mr. Rogers: Mega Precious Metals we feel is more reflective of the business goals of the company. As much as we are a merger of Skybridge Development and Mega Silver we really are a new company with a new team and a new focus on precious metals. We are currently focused on gold but are willing to look at other precious metals as well.

CEOCFO: Is the investment community paying attention?

Mr. Rogers: I think they are starting to. I have been doing a lot of marketing, but most of it has been introducing ourselves as a good management team with solid financial backing and an ability to acquire and work good projects. The main point to now has been talking about what we are going to do, get us on your radar, ‘watch us’. We have started to make some things happen and recently the fruits of our labor have started to come together at North Madsen. We announced one of our sets of channels and our first eight drill holes there. We still have another twelve drill holes coming and we continue to grow value on those properties. The recent Headway acquisition will get peoples attention as we hope it can be another “Gold Eagle”, in fact many of the same people are our share holders. Good things will come in time, a lot of people are watching us, so it is just a matter of us following through and producing what we said we would. We must do what we say we will do.

CEOCFO: In closing, why should potential investors pick Mega Precious Metals out of the crowd?

Mr. Rogers: Mega Precious Metals is a good investment because we have good people, we have adequate funding and cash to execute on our plans and we are in and focused on Red Lake. We can and will make things happen there! The North Madsen project should grow value and add methodically to our base asset value while Headway although high risk, has the potential for high-grade zones which could dramatically or even exponentially increase our current market cap.
 

We have a good team and healthy cash position that will allow us to leverage new opportunities to pick up other high value projects. I feel that because of my personal relationships with a number of people in Red Lake that we will find creative ways to collaborate and make value deals in Red Lake. Stay tuned we are just getting started!

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The vision at Mega Precious Metals is to acquire and work high quality, high margin exploration projects. We are looking mainly for gold, silver, precious metals. We are focusing in Red Lake, in my 20 year career there I have learned a lot about the people and the rocks, so we feel we can make good deals, acquire properties and make mines there. We have a lot of ideas on how we can find and pursue economic opportunities by pulling people, partnerships and economics together. - James A. Rogers