We had the good fortune to follow Exploration Insights editor Brent Cook around the floor at PDAC for a couple of hours two weeks ago.  Mr. Cook is one of the leading investment newsletter writers in the junior mining business.

As is often the case at PDAC, walking down the isles, attendees get pulled in lots of different directions.  Some friends we bumped into said we should visit Moneta Porcupine (ME:TSX) CEO Ian Peres at his booth. This was an excellent opportunity to watch Mr. Cook quickly try to identify fatal flaws in a company he wasn’t yet familiar with.

Moneta’s 4.3 million ounce Golden Highway project in Ontario sounded pretty good to Brent, but he wanted to know about grade continuity and cash position before doing some additional homework in reviewing the drill sections.

To find out whether Mr. Cook ended up buying Moneta Porcupine, you have to sign up to his excellent letter ($140/month here). What follows is a transcript of the first quick meeting between Brent Cook and Ian Peres.

Brent Cook (Exploration Insights) and Ian Peres, CEO, Moneta Porcupine, PDAC 2015

BC: All right so we just ran into two of Tommy’s merchant banker friends living in the Bahamas. They suggested we go see Moneta Porcupine so we are going to check it out.

BC: Howdy. Brent.

IP:  How are you Brent? Nice to meet you.

BC: How are you?

IP Good. I have seen you around quite a bit.

BC: This is why we are here he claims 4.3 million ounces I am listening what do you got? What is this actually all about?

IP: This is actually a PEA that was put together in December 2012. It was a gold price assumption of $1350 US and at the time we assumed a flat exchange rate. Putting this in context this is December 2012 and the cut-off was July 2012. Since then we have actually completed well over 50,000 m of drilling which is actually not included in the 4.3 million ounces or the current PEA. You put in context the current gold price with the Canadian dollar obviously coming off 22% you are talking about $1500 equivalent Canadian gold so that number is actually substantially better than what it is.

BC: What’s the grade?

IP: We are talking about a 1 gram deposit. We are talking about something which is an open pit that has got an underground component on something that is called the South West zone. The deposit is sitting in Timiskaming sediments and we have got fantastic continuity. We have got very good widths and consistent grade over you are talking about range from over 50 m to as much as 150 m of consistency .

BC: Of width?

IP: Of width.

BC: Ok. So that is what your open pit is going down on than. So 150 m of 1 gram material that you say has got really good continuity. It is not a bunch of sheeted veins?

IP: Not at all.

BC:  Your co-efficient to variation is?

IP: Good question. So in 2013 we went and drilled about 40,000 m and we drilled it on 50 m spacing because we had 100 m spacing so we had inferred category of ounces and we wanted to move that to indicated. As a result of doing that we confirmed that there is very good continuity and in many instances in going 50 m in we were actually seeing better grade. The internal modelling that we have done since the resource is suggesting not only are we seeing an improvement obviously in tonnage but we are actually seeing and an improvement in the ounces and we are seeing and a significant improvement in grade. Now why? A lot of the analysts and investment professionals will think that when you look at a deposit like this that we are smearing low grade. When you look at a deposit like this we are smearing low grade. The reality is that this is actually a low grade deposit and we have 1% of the population which is actually high grade. So we were actually smearing low grade into the high grade. With the 50 m spacing that we have done we can now confirm where the high grade lenses are properly isolate those and in doing that we are moving the deposit from 0.95 g/t which is what it was reported to as in December 2012 to almost 1.05 – 1.1 grams per tonne.

BC: This is a straight milling operation?

IP: It is absolute a straight milling operation. We have completed metallurgy on the project and we are seeing recoveries of up to 96% so we are seeing world class recoveries.

BC: Ok. I guess the PEA is on your website?

IP: The PEA is available on our website.

BC: Research reports on there?

IP:  Absolutely. Yes.

BC: A lot of sections?

IP:  Absolutely.  It is all available on our website.

BC: I like sections I want to see the continuity.

IP: Absolutely. Please take a look at that and we will see updated sections as soon as we have the internal model completed. You will see on the 50 m sections what the continuity looks like.

BC: Who did the resource report?

IP: It was actually P&E Mining out of Mississauga.

BC: I don’t know them.

IP: Smaller shop they are verygood on terms of the technical analysis.

BC: and the PEA as well?

IP: PEA as well.

BC: Really that is as far as I can go without going through the section by section by section.

IP: Sure.

BC: At 1 gram it’s close and everything has got to go right. You have got the Canadian dollar working for you. You have got the oil price working for you. Your access and that’s good. I will look at the sections.

IP: I would comment that one thing to keep in perspective is that we have 12 km of strike of the Dester proper coming through the property. We actually have got the Dester splitting up it sort of comes across and comes south in a north-south orientation and blows up to almost 2 km in vertical north-south width. We have got lots of structure coming through the property which is largely untested. The resource is sitting on 4 km of that 12 km strike. We think there is potential is for well over 10 million ounces on this project.

BC: Remind me your market cap?

IP: We are sitting at $10 million dollars right now roughly 5 cents.

BC: How much money you got?

IP: We have enough money for at least the next year.

BC: So what is that a million bucks?

IP: We are talking about $250,000 dollars. Our burn rate is very very low. I am actually the President and CEO my background I am a CA by training. My wife and I own  10 million shares that is cheques we have written. I do all the CEO work, corporate secretarial, CFO work, and investor relations and I work out of home. My background is investment banking and I know what it is to actually like to make sure money goes into the ground. You make money for the shareholders and you do it as quickly as possible. That is what our story is about here.

BC: All right thank you.

IP: Thank you very much Brent.

Discuss in CEO.ca live 

This is not investment advice. All facts are to be checked and verified by reader. This article may include forward looking statements and investors should take caution when reading these. As always please do your own due diligence.