Resource World Magazine

very strong people." Cunningham added, "The thing I always used to hear, and I do believe, is that it's all about people, people, people when reviewing companies. Now, I am hearing money, money, money. If a company doesn't have any money right now they are in trouble. I do think the sector will shrink; I think that is a positive thing." Unique Joint Venture Model: Miranda has also proven its ability to build solid relationships with mining companies. The company's recently finalized deal with Agnico-Eagle Mines Ltd. [AEM-TSX, NYSE] illustrates just how their business model makes for economically efficient project generation. Cunningham described the development of the partnership. "When we went into Colombia, we went there for the right geological reasons: it's a fabulous gold jurisdiction, it is underexplored and it is on the frontier. But, what we found was, though it was meeting our expectations geologically, it was much more expensive than we had anticipated. We started last year at PDAC working on a strategic alliance with Agnico-Eagle and we signed that alliance in February. It is a three exploration alliance for our Colombian program only. Essentially Agnico-Eagle is now funding 70% of our Colombian exploration and we're funding 30%. We are doing that at a $1.1 million budget per year for the next three years. So, in effect, they are contributing $2.5 million over the next three years without causing any share dilution. It's a great deal for us and it's a great deal for them." He added, "They can earn 70% in the project by funding the work to take it to feasibility. So, not only do we have somebody sharing in the cost of the exploration, it is essentially a built-in joint venture." A dozen or more of Miranda Gold's projects are in Nevada. Cunningham said, "Of that number, three or four of them are active joint ventures where we expect partner spending this year on drilling programs." Technical Exploration Approach: Also increasing the company's chances of sucAPRIL 2013 cess is what Cunningham describes as Miranda Gold's technical approach. He said, "Every full-time Miranda employee is a geologist. We have five professional geologists in the Elko office and three professional geologists in the Colombian office. Combined, they have been responsible for the discovery of over 60 million ounces of discovery (gold) with various major companies. Cunningham, a geologist himself, has over 38 years of exploration experience and Joe Hebert, B.S. Geo., Vice President of Exploration, has 30 plus years of experience. The company has a mix of young and veteran geologists. Cunningham said, "It's the younger ones that are looking at some of the really new, high-tech stuff like astral imaging where you look at satellite images and write algorithms to identify specific types of clays that might be associated with alterations. The younger geologists are quick to adopt the new technology and the older geologists are more field savvy. You need both. You don't find a deposit starring at a computer screen. A computer screen can tell you where you should go to look for a deposit." The Future: I asked Cunningham about his thoughts on future gold prices and their impact on gold miners and explorers. He said, "I think, this year, gold will break below $1,500, which is really going to dry up financing. I think it is going to take something catastrophic to get it back on track again. Once it goes under $1,500, most miners won't be profitable. Cash costs are probably running $700 to $800/oz and all in costs are running $1,400 to $1,500/oz. You saw that two weeks ago when Barrick put out their numbers. Gold will recover, but it won't happen overnight. When a miner's profit margin goes below zero they begin mining the high-grade portions of the mine, often to the detriment of the actual engineered mine plan. It only takes a year or two for that to really [impact miners]. It happened in the late 1990s when gold got down to $250 and nobody was making any money. It will rally. Commodities are cyclical. Developing countries like India and China are going to want more copper and Joe Hebert, Miranda's Vice President of Exploration at the Red Canyon Project, Nevada. Photo courtesy of Miranda Gold. more aluminum. It usually takes some suffering before it turns around." There were a lot of CEOs manning the booths at this year's PDAC. I asked Cunningham about that. He said, "I do all of our IR. We don't have an IR manager. When it gets right down to the bottom line, shareholders want to talk to me; they don't want to talk to IR…The letter writers, brokers and analysts tell their clients that the person you want to talk to is the CEO. I did the January Cambridge Conference, and I did the Cambridge California Conference." He said, "Attending these shows is part of our responsibility to the investor. I went to a dinner last night and sat at a table with 10 people; some of them are running $400 million funds; several of them own 5% of Miranda. You want to spend time with those people and you want them to know what you are doing." What can a company do to ensure they are around to attend next year's PDAC and beyond? Cunningham summed it up perfectly. "All we can do is make sure we are positioned correctly, that we're financed and that we execute on the business model that we told our shareholders that we are going to execute on. " n www.resourceworld.com 47

• Cover