General Metals Corp Expands Gold Projects in Nevada

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General Metals Corp
(OTC BB: GNMT)
(Frankfurt: GMQ)
Rob Carrington, CEO

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Corporate Profile:
General Metals Corporation (OTCBB: GNMT, Frankfurt: GMQ) is a production oriented junior mining company engaged in the evaluation, acquisition, exploration and advancement of gold exploration and development projects. Our “flagship” project is our advanced stage, Independence Project, stiuated in the prolific Battle Mountain Mining District of north central Nevada. In addition the Company holds other exploration stage properties Nevada. General Metals controls 100% of The Independence Mine, located in the Battle Mountain Gold District of northern Nevada and forms an island in Newmont Gold’s land holding at it’s Phoenix Mine, www.newmont.com.

TRANSCRIPT:

WSR: Good day from Wall Street. This is Juan Costello, Senior Analyst with The Wall Street Reporter and joining us today is Rob Carrington, CEO of General Metals Corp. The company trades on the Bulletin Board, ticker symbol is GNMT and on the Frankfurt Exchange, ticker symbol is GMQ, and they are a junior minerals exploration and development company. Thanks for joining us today Rob.

Rob Carrington: Juan, thank you very much for having me.

WSR: Great, anytime now. Starting off, give us an update on your Independence property. I know you had a 43-101 completed there last month.

Rob Carrington: Right. The Independence property is in the Battle Mountain Mining District on the Battle Mountain Trend in central Nevada. It’s one of the more productive gold trends in Nevada and certainly one of the more productive trends in the world. Independence hosts two different kinds of mineralization. There is a Surface Oxide gold deposit that is conceivably heap leachable and to be mined by an open pit and then there is a high-grade underground Skarn target in there that’s at depth below the Surface Oxide. The Oxide was the main focus, well, both of them were focus of the 43-101, we just finished. The Oxide currently contains a drill-indicated resource or actually measured and indicated resource of 210,000 ounces of gold. We also completed — too late to get included in the 43-101, but it’s completed a large diameter column test on 4-inch crush door, which is very, very crush ore. We were able to point 5% extraction of the gold on that. Most people feel lucky if they can get 75% on a minus 1-inch crush. So the operating cost at Independence are likely to be extremely low. I believe that this will become a very profitable low-cost gold mine in the very near future. We are looking to move the drilled resource into a reserve as fast as possible. Ideally, we will be completing a feasibility study on this by the end of 2010 and should see a production on this sometime in late 2011 or early 2012. The Independence Skarn is certainly a nice bit of blue-sky and upside for our investors. The drilling in the Skarn identifies an unconstrained resource of 790,000 ounces of gold with an average grade of almost 0.2 ounce. The interesting thing about the Skarn is, if we raise the cut-off to a quarter-ounce of gold, we are left with 400,000 ounces of gold at 0.4-ounce average grade, which is a very high grade. It’s a nice piece of deposit. So, I think in the future, we will see that developed and become a rather large underground mine. There is room to double both of these targets with additional drilling on the property. The general business plan of the company is to get these properties or get the Surface Oxide into production as fast as possible and then use cash flow from that operation to complete the exploration on the Independence property. Once we are a producer, there is a whole host of financing opportunities that are available to a producing company that just are not available to a junior explorer, such as General Metals is right now. And going forward, we are currently working on another possible acquisition, which in a perfect world, would see General Metals with two operating heap leach gold mines here in the State of Nevada. Ultimately, we would have annual production that would probably be approximately 100,000 ounces of gold. Now that’s, at this point in time, that’s anything, but a guarantee. So we are working on a very interesting second half of this year and commensurate with that, I’m also looking at the possibility of completing an IPO on General Gold, which is a wholly-owned subsidiary of General Metals. General Gold would probably IPO on the Toronto Big Board. We’d look at completing the IPO after we have at least one mine in production that should give us a premium on the market and would be a very nice bonus for all of General Metals shareholders. Project like that would add a substantial amount of values to General Metals and General Metals would at that point then have a hard asset that they could actually increase their share price and also superior future financing with to continue to grow General Metals.

WSR: Well, definitely.

Rob Carrington: To say in a nutshell, that’s basically what we are doing.

WSR: Okay, well, good and so what are some of the other factors that you feel, Rob, makes General Metals unique from some of the other players in your sector?

Rob Carrington: I think one of the things that makes General Metals unique is that there is a tremendous amount of very skilled technical expertise that’s been behind the company from day one that doesn’t really show on the list of officers and directors or key employees on the company’s website. We were very fortunate to have some extremely qualified consultants, Sam Nunnemaker and Jeff Rassuchine. They have worked extensively on the Independence property. They have extensive experience throughout the great basin in Nevada and in fact they have a lot of international experience. Both these gentlemen have discovered mines. They have helped to build mines. Samuel Nunnemaker was Vice President of the US for Inmet Mining. Jeff Rassuchine was Manager for Phelps Dodge Corporation here in Nevada. So the company is extremely fortunate to have those gentlemen as consultant. And in addition, we’ve been restructuring our Board to transition the company into a producer. We have announced Paul Wang as a member of the Board. Paul is a long-time banker and specializing on natural resources. He was a senior advisor to W.R. Grace & Company. He has been a senior advisor to Deutsche Bank, Bank of America, almost every major bank there is, specializing in natural resource acquisition and financing. And Monday of this week, we announced that Mike Powell from the Bay Area of California has come on our Board of Directors. Mike is a very successful venture capitalist. He is focused in historically in biotech and IT companies, but his expertise is largely in spin-outs and IPOs, and I believe that with Mike and Paul’s experience in the financial sector, General Metals would be poised very well to go forward, finance itself and to finance General Gold through its IPO. These two gentlemen, I count on helping to grow the company very rapidly and I believe we will be able to put quite a bit of money into the company quickly. I think for our existing shareholders, it should be a very exciting time. For people interested in becoming shareholders, certainly right now, General Metals is a very undervalued stock. I have my own personal opinions what the stocks should be worth in or why it should be worth that and needless to say, it’s a lot higher than what the company’s current market value is. I believe, you know, as we sit right now, we are probably undervalued by a factor of about ten and once we get at least one mine and hopefully two mines into production, we will be looking backward on a multi-dollar stock.

WSR: So Rob, what do you think that investors are missing from the General Metals Corp story, which if, they better understood would result in a higher valuation?

Rob Carrington: Well, I think one of the things about General Metals is the Independence is truly a new discovery. It’s not somebody else’s old gas stock that we picked it up and polish the apple up and try as though it was a new thing. So it’s really a brand new from the ground up discovery. General Metals has completed a 124 drill holes. Every hole hit gold mineralization, every hole hit mineralization over mineable widths of mineable grades, and it has just phenomenal metallurgy to achieve 91.5% extraction on a four-inch crush is almost unheard of. And I think you’ll see that we’ll achieve the economics of a mine that has ore that’s probably twice their grade simply because that the rock breaks to four-inch very easily where the gold is easily recoverable. We have no encapsulation problem, but the ore body has incredibly high continuity and a section from the far south end of the drill pattern is almost identical to the section of the north end of the drill pattern that makes for a very low cost mining. We don’t have to worry about large amounts of internal pollution. It’s just all in all very nice. And I think, perhaps one of the things that market has missed and really we didn’t have it until recently was the 43-101 report because it takes a lot of effort to produce an initial 43-101 report on a property that really has no prior resource or reserves. And General Metals just finished that as you noted this last month and that’s the first time in General Metals’ history that the market has a metric by which to measure the value of the company. Certainly, if you look at the value of the resource that was established in that 43-101 report, the company’s stock is really undervalued.

WSR: Well, good answer and so what are some of the other milestones and goals and objectives that the team is hoping to accomplish here over the course of the next 12 months?

Rob Carrington: Really one of the things we are going to be working on is getting the company financed. Now that we actually have a resource and we have Paul and Mike on Board, I think we’ll be able to finance the company fairly easily in the near term. Then over the next three to perhaps four months, we are looking at updating a 43-101 report. There, as I indicated earlier, was this large diameter column test that did not make it into this report. There were also 44 drill holes that were completed after the cut-off date for this 43-101 and so we’ll see an incremental increase in the grade and the number of ounces in that resource. Then over probably the course of the next 10 to 12 months, we are looking to completing a feasibility study. We have another large diameter column test from an underground bulk sample that the company collected. That column leach test would go into the feasibility study. We are going to be doing some geo-technical drilling to look at how steep we can actually build the pit wall because in a pit of this size, every degree that we can steep in the pit wall up will save the company about a million dollars on its development cost. So it’s worth couple of drill holes to save that much money. And once we have the feasibility study, then we’ll be looking for a production financing to get the property into production, as I indicated by end of 2011 or first quarter of 2012. We already have most of our permits in process, all our baseline studies are completed. So we are well on our way in moving toward production. We certainly haven’t let the fact we didn’t have a published resource of understanding on the way of other progress. Basically, by the end of this year, we should be looking at an updated 43-101 and a feasibility study.

WSR: Well, good and so once again joining us today is Rob Carrington, the CEO of General Metals Corporation. The company trades on the Bulletin Board, ticker symbol is GNMT and on the Frankfurt Exchange, ticker symbol, GMQ. Currently trading at $0.04 a share; market cap is 8.32 million. Before we conclude, Rob, why you believe that GNMT, why does General Metals Corporation represent a good long-term investment opportunity?

Rob Carrington: I think because we are really a near-term gold producer. We are looking at gold production certainly within 18 months, hopefully a lot less than that. And if some of our listeners would like a few other opinions on the company, Thom Calandra of Stockhouse, the writer of Ticker Trax has been following the company. So we have some pretty interesting newsletter writers following us that just started recently. So we are going to see a lot more interest coming from the marketplace there. But the real future interest should be because we are a near-term gold producer. We are going to transition from being a prospector to a producer and that will increase the company’s value substantially and also as I indicated, we are working on a second acquisition that is also near-term production.

WSR: Well, we certainly do look forward to tracking that as well as continue to track the company’s growth and upcoming progress, and I’d like to thank you for taking the time to join us today and to update our investors on General Metals. Good to have you on Rob.

Rob Carrington: Juan, thank you very much.

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