Bayfield Ventures Corp
James Petit, CEO
WSR: Good day from Wall Street. This is Juan Costello, Senior Analyst with The Wall Street Reporter and joining us today is James Pettit, CEO of Bayfield Ventures Corp. The company trades on the TSX Venture, and their ticker symbol is BYV. They are exploring for gold in the Rainy River, and Red Lake districts of Northwestern Ontario. Thanks for joining us today James.
James Pettit: Thanks Juan, thanks for inviting me.
WSR: Anytime now. Starting off, talk about the exciting news of your 20,000-metre drill program on your Rainy River property.
James Pettit: About three years ago, we acquired three blocks surrounding what is now the Rainy River Resources deposit; one to the west, two to the east. As it turns out, one of the blocks, the Burns Block in particular to the east, is tied right on to where they’re going to build their pit. Their pit design actually incorporates a piece of our Burns Block because two years ago they had optioned this block from us, drilled a few holes, the market collapsed in ’08, they wanted an extension on the option agreement, went back and forth, and they finally said, we don’t know what the market is going to do, you guys can have the property back. As they found out last year, the market came hurrying back, their stock came from about $0.75 to $6, and we now have the Burns Block back, and what looks like the extension of their main deposit zone, that’s called the ODM17 gold zone, we’ve gone in this year and drilled a few more holes just to confirm that we’ve got this extension happening on our property, and we have done that.
So what we’ve done is gone out and raised, just recently another $4 million, and have announced a 20,000-metre drill program, which is pretty unusual for a small-cap junior like this to be able to that, and this financing incidentally was basically sold out in about an hour and a half. In all my years in this business hadn’t seen anything like that happen so fast. The appetite was tremendous, and it’s simply because of a location, location, location. We’ll go into this property and run a grid, and we’ll just drill it right off and as we continue to expand on that zone, Rainy River owns the land to the north of us, and to the south of us, which they’ve not drilled and they haven’t drilled it primarily because we own that block, and if they build up that resource around us, it’s going to drive the price of our property up. So we’ll go in and drill this, we’ll drive the price of our property up, and at some point they’re going to have to come to the table. And, in the mean time, I wouldn’t be surprised that all of Rainy River themselves becomes a take-over target to one of the majors.
Our other blocks, there’s the B Block, it’s just slightly to the north of the Burns Block, it’s also on strike with their northern section of their open pit. We’re going to prove that up as well, and then off to the west, about a kilometer, we’ve got another very large block that we will eventually get to, but we’re more focused on the two eastern blocks right now. Once again, it’s really nice to be close to an existing or developing deposit, but this is like right over the top, we are literally attached to their open pit design, which bodes well for the future. And when you’re drilling 20,000 meters, it will take good part of a year, and you’ll have some real steady news flow, which bodes real well for the junior markets, these junior companies need news all the time or as often as possible. This is going to afford us to do that. And, you just mentioned we also have a property, we have an interest in a property in Red Lake, and our partner in that property happens to be Gold Corp. They are in charge of it, they are in control, so we basically have to sit back and wait for them to make decisions on the property. We own about a 25% interest in it.
WSR: As far as the way that the company operates within the sector, alliances and strategic partnerships are pretty important part of the business model?
James Pettit: As a junior, yes. You have a choice to either raising the money and going out and doing it yourself, and hoping down the road you get taken over and in this particular case, this is the prime example of that. Most juniors start out on their own and they try to find an area they can have some success in to attract another company to come in and possibly spend more money in the form of a joint venture or they just continue to do it themselves, and if they’re that fortunate develop a deposit, but we all know that it’s a very rare event that these juniors actually get to that point, a very high-risk business. Your business model is either going to be one of generating projects you spin off to other companies or develop a project that’s — what was called in the old days, you can find a new mine in the shadow of the head frame of an old mine, and so you want to be close to where there is known gold, and develop something on your own, and hopefully get taken over at some point down the road, that’s basically where we’re at right now. We’re so close to this known deposit, and we’re going to prove up that it extends onto our property.
WSR: So you think now the company is becoming pretty well positioned to capitalize on some of the recent gold trends and numbers?
James Pettit: That’s part of the reason this financing sold out so quickly. People are now seeing gold actually do what they’ve been talking about for the last ten, 15 years, gold is going to go higher. Gold is going to go higher, and even from this level it looks like, based on everything I see out there in the marketplace, gold will go higher. That will eventually lift the junior markets along with it, it’s a boats float concept, rising tide and the boats go up with it. Gold will move in an upward direction, eventually it drives the prices of the big, large-cap companies with it, and then eventually the smaller cap companies follow.
WSR: What do you believe makes Bayfield Ventures unique from some of the other juniors out there in your sector?
James Pettit: Location, location, location is one — that’s three things sorry. The other is, having an ongoing story. This story will be carried forward over the next year with 20,000 meters of drilling; I mean that’s a lot of drilling. That will take at least 12 months to do, and that’s what these companies thrive on, they need news flow. News flow drives the market, news flow will drive the stock price as well as gold price is going up, and then also whatever happens to Rainy River that will also affect our stock price.
WSR: Can you walk us through your background and experience James, as well as that of some of the key management over at Bayfield Ventures?
James Pettit: I’ve been in the business for about 15 years, primarily on the finance, management side, raising capital, corporate governance management that side of things. Since about ’95 I guess, is about when I got into this and it was my father-in-law who was a big mining executive back in the 60s and 70s up here in Canada. He pulled me into it. So I just kind of came across naturally on the finance side, my relationship — the other fellows on the Board, Don Houston, was born and raised in Red Lake, he’s been a mining contractor most of his life. In other words, he can oversee all the drill programs, the physical programs and all that, and he knows just about everybody in the business in this neck of the woods. Amanda Chow, she’s a CMA, she’s a Certified Management Accountant, shares her time with another group called Hunter Dickinson and us. She’s very knowledgeable on all the new financing rules that we’re faced with right now that was a big transition. So it’s good to have her on side, because of her knowledge base there. Don Myers is Corporate Communication; he oversees the whole aspect of the business, which is IR and what not. We can keep things fairly lean and focused here, it’s not a big overhead, there’s not a big monthly drain. We keep our geologists in the field, we’ve got an office in Red Lake, that’s only a couple of hours from Rainy River, Bob Marvin, who’s our Chief Field Geologist, and Dave Busch is our Senior Consulting Geo, he’s a bit of an expert on this type of geology, so he is a tremendous guy to have on hand.
WSR: What are the some of the specific goals and milestones that the company hopes to accomplish over the course of the next year, I know you went over some of them at the top?
James Pettit: We want to see this drill program through to the end, and that’s what the money was raised for, was to do it all. On the Burns Block, we want to see the extension of that ODM17 zone come right through, we’re already into it now, and we actually started drilling last week, and the first hole is probably two-thirds done, we’re starting in the southwestern corner and we’re going to work our way right eastward across the block. As far as milestones go, we want to just keep proving this thing up as we head eastward. Now that can hopefully put pressure on may be Rainy River, just start taking a serious look at what we’re doing here, and who knows what can happen there, I know that they’re being looked at by the Barricks of the world and Agnico-Eagles and that sort of things, so as far as those milestones are out of my control, all I can do is maintain what we’re doing and stay on track, and convince them eventually to do something because it’s going to end up being part of their open pit.
WSR: When it comes to investors and the investment community, James, do you believe that they understand the company’s message and ultimately your upside potential?
James Pettit: I hope so. It’s not a difficult one to understand, it’s all about location, and obviously now drilling, we’re getting results. We do see the zone coming through our property. So from a junior investment point of view, we do have a very good strategy going forward in the near-term and you can almost say we have an excess strategy too, I mean we will get bought out, no way around it.
WSR: Anything that you believe investors are missing from the story?
James Pettit: No, we’ve got enough property here that we could end up finding a whole new discovery on our own. Now we do know on the B Block, there is some base metal evidence up there that could surprise everybody, that’s great. Now what we’re looking at is gold. So there’s always room for surprises down the road, things you don’t plan on.
WSR: Joining us today is James Pettit, the CEO of Bayfield Ventures Corp, which trades on the TSX Venture, ticker symbol; BYV, currently trading at $0.41 a share. We were just discussing their recent 20,000-meter drill program on their Rainy River gold property in Northwestern Ontario, as well as the closing of a $4 million financing. Before we conclude, James, why do you believe that investors should consider BYV, Bayfield Ventures as a good long-term investment opportunity?
James Pettit: It’s still got a very low market cap, relatively speaking it’s just under 15 million, that’s quite small to have four million in the till and a tremendous drill program ahead of it, with some very good news flow coming out. That’s pretty much everything you look forward as an entry point into a junior.
WSR: We look forward to continuing to track the company’s growth as well as report on your upcoming progress, and I’d like to thank you for taking the time to join us today James, and to update our investors on Bayfield Ventures.
James Pettit: Yes, thank you very much Juan.