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Luminex Resources (TSX-V: LR) - Gold Miner With A Tight Shareholding Structure & Access To Cash

|About: Luminex Resources Corp. (LUMIF)
Summary

We discuss the Lumina Groups track record, highlights with an overview of Luminex Resources.

What is their strategy, model and thinking for building a large Gold & Copper producer in South America?

Enhancing their liquidity - how are they promoting this Gold company?

Joint Ventures with BHP, Anglo American and First Quantum.

We interviewed Marshall Koval, CEO of Luminex Resources (TSX-V: LR), a Gold Explorer and Developer in Ecuador. Part of the Ross Beaty Lumina Group, Luminex Resources has a very experienced management team with a track record of delivering returns to shareholders on Copper and Gold projects in South America, in the hundreds of millions of dollars. They have quickly established earn in deals with BHP, Anglo American and First Quantum which give them respected and well funded partners for their development programmes. And the association with Ross Beaty doesn't hurt either. 

Click here to watch the interview.

Matthew Gordon: We spoke back in May about Lumina Gold, but today we’re going to be talking about Luminex Resources.

Marshall Koval: Luminex Resources was the company we spun out in 2018 and we’ve got a large portfolio of assets, earlier stage exploration in Ecuador. A bit different than the Lumina Gold story which is a development project, but we’ve got large scale exploration properties for Copper and Gold as well, and then we’ve got some world class partners that we JV’d with to do some of the exploration and we’re doing a bit of work ourselves on our Condor project.

Matthew Gordon: So you’re referring of course to the Lumina Group. Why don’t you tell us a bit about that? There’s a bit of a track record. You’ve been making money for people. I think you’ve raised – you told me last time - $175M and returned $1.5Bn to shareholders.

Marshall Koval: Lumina Group was founded in 2003 by Ross Beaty who took a view on Copper. So went out and acquired a lot of world class assets and it was sort of an option play originally. And as time went on, you control these projects, you have work commitments and basically the long and short was raised about $175 million, like you mentioned, and returned $1.5Bn to shareholders.

Matthew Gordon: Obviously with Ross Beaty’s involvement that gives you access to capital and reputation as well, plus you obviously have delivered as a management team. With Luminex Resources, it’s a relatively small market cap right now. It’s early days. You’re also involved in Lumina Gold. Where are you spending most of your time?

Marshall Koval: Right now it’s been about a 50:50 split for me. We’re advancing the Lumina Gold Cangrejos projects towards pre-feasibility studies. So there’s a lot of technical, engineering work, fieldwork, so I’ve been working on that, but also I’ve been front and centre on all these deals with BHP, Anglo American, First Quantum, that we have joint ventures within Ecuador. The combined amount of those deals is about $140M committed to Copper exploration. So we’ve been running 2018 and 2025.

Matthew Gordon: Why have you spun out Luminex Resources from Lumina Gold? They’re both Gold companies.

Marshall Koval: Basically, our philosophy is we’re an exploration development group. We tend to try to acquire large scale projects like the Cangrejos project in Lumina Gold, and basically the idea is to add value, derisk these and move these on to somebody that would build the projects. It’s basically the same model as Lumina Copper.

So what we had is when Ecuador opened up their concession system and granted new concessions, we acquired – even though we’re a Gold company – quite a few Copper early stage exploration projects. So by spinning Luminex out, we have a core asset in the Condor project which has about 1.4Moz of Gold in Indicated and 2.5Moz in Inferred. But we also had these early stage Copper exploration projects, so rather than going to the market and deluding our shareholders, we went and did JVs with three major companies to explore these Copper assets.

Matthew Gordon: Let’s get into that because I can see Condor, Tarqui, Pegasus, and Orquideas. Do you want to break those down? I think what our audience is really interested in is what you’re thinking, what your strategy is. What are your plans for these?

Marshall Koval: So these Copper assets. We’re pretty opportunistic. We had a lot of information in Ecuador and when the concession system option came up, we acquired all these projects – Tarqui, Pegasus, Orquideas and Cascas. And then we did initial work ourselves. We have a team of over geologists in Ecuador, so we did a lot of the basic exploration work beyond what was already known about these projects. And we advanced them to the point where we actually didn’t go out and solicit companies to do deals. This was all inbound.

The first deal we did was with First Quantum on Orquideas and Cascas. Right now First Quantum is in the field. We’re the operator in he project but working closely with First Quantum. We’ve got five drill holes in and about 1500 metres of drilling, so far. So that deal with First Quantum we had to spend $38.5M over five years to earn 51% and they can earn an additional 19% if there’s a discovery and they carry us to a production decision.

Matthew Gordon: So they can earn up to 70% subject to them paying up for that and obviously getting through to construction. But what’s in it for you? You’ll get 30% of what?

Marshall Koval: There are two deposits – the Orquideas which is being drilled out and that’s to the north and then the Cascas to the south. These are large Copper anomalies we’ve identified with geocam and geophysics and they’re about 5km x 2km / 3km wide – both of them.

So basically if there’s a major discovery – and these are straight Copper projects, no Gold. Then we’ve got with Ross’ involvement in our group, if there’s a major discovery we can participate in the 30% if it gets to construction, or we have the option to sell out that portion. There’s a lot of groups – a lot of them are Japanese companies like Sumitomo for instance, that would look at buying a 30% interest in a major Copper mine. So it gives us leverage to the upside, is basically the idea with all these.

Matthew Gordon: So explain those numbers. So First Quantum put in $38.5 Mover the next five years. They get 51%. Are you putting in any additional cash?

Marshall Koval: It’s a straight earn in JV's, so after they spend the $38.5M they earn the 51% in the JV company, and then if they advance it through pre-feasibility, feasibility study and construction, we’ll carry it for the 19%. And then when you get to 70%, that’s where we would have to put our pro rata in.

Matthew Gordon: So that’s great optionality for you on that deal. That was the first deal. Let’s go to the second deal.

Marshall Koval: So Anglo American is a bit different approach. So on the First Quantum deal it was two specific deposits that had been identified. Anglo took a broader scale. So the Pegasus A and B is our largest land position in Ecuador. Let me just say this – we’re the second largest concession holder in Ecuador and the Pegasus A and B is the largest concession that we have. So we have about 135,000 hectares of mineral concessions and Pegasus is about 65,000 hectares.

So Anglo’s view is a bit different. They’re looking at a broader regional district sort of scale. There’s upper porphyry and some Gold showings that we’ve identified in the area. So Anglo’s approach is more systematic, broader regional scale exploration. So the deal we have with Anglo is they have to spend $57.3M over seven years, earn 60%. And they can earn an additional 10% if they carry us to a construction decision. So right now they’re in the process of a lot of field geochemical work, they’re getting ready to fly a geophysical over the entire land package to look at perspective terrain. And so that’s basically the Anglo deal. We’re really excited to have both these – and BHP too as part of.

Matthew Gordon: One, access to capital, but two, these are names that people trust as well. It lends some level of comfort to investors.

Okay, so that’s a slightly earlier stage project but again because we’re talking about seven years for this earning period and then you’ve got BHP.

Marshall Koval: So BHP is a deal we just closed in the last month. Basically BHP… So let me back up. Anglo is the operator on the Anglo deal. First Quantum , Luminex is the operator and on the Tarqui project, BHP is the operator. Tarqu’s on the area of Mirador, which is a Copper mine that’s in construction right now. So it’s in that ugly prospective Copper mill, and this is a small land package compared to the other ones. We made a discovery out there and it looks pretty promising. It’s some of the best Copper terrain that we’ve found in Ecuador through the work that we’ve done.

So the deal with BHP is they have to spend $42M over six years to earn 60% and after that they can earn an additional 10% by spending another $40M, and that should take you roughly through a feasibility study if there’s some discovery there. So basically that’s the idea. These are large targets, large anomalous areas that we found in the field. They were putting off risk to these first class partners to advance these projects.

These leads us – our primary focus after these three partnerships is our Condor project. Most of these assets are in south eastern Ecuador. The only one that’s stuck in the central area is Anglo American. You can see all of our holdings on Slide No 5. You can see where these different properties are in the country.

Let me just go back to Luminex. We just announced high grade discovery at Condor. And Condor’s interesting because it’s a large land package, the northern part of the property is a thermal Gold deposit and the southern part is Gold, Copper porphyry and we just made a high grade discovery at the camp zone and we’ve drilled four holes into it now. So that’s pretty exciting. We put a couple of press releases out in the last month or two, and we can get some details on that lately. Right now we have one drill at Condor and we’re drilling at Condor, but we think we made a significant discovery beyond the known resources that have been reported to date there.

Matthew Gordon: So these are all relatively early stage projects in the scheme of things, hence the market cap. Your market cap is quite low. I guess the BHP explains the bump in the share price this month. You went from $0.70 to $0.90. I think $0.92 today. So these partnerships that you’ve created, how long did they take to actually come into fruition?

Marshall Koval: These are big companies and these are complicated deals because basically you’re structuring the earning agreement, royalty agreements, KV agreement, assuming that you have a producing property. So there’s a lot of paper and there’s a lot of negotiations involved, but generally they’ve taken nine months to 12 months to go from initial interest to negotiation closing of properties.

I want to add one thing on the… It isn’t just these deals that have moved the share price recently. I think the discovery we made at Condor at the camp zone has also helped move the share price as well.

Matthew Gordon: Being what?

Marshall Koval: So basically what we announced were three drill holes in the camp zone area and to give you an idea – these are near surface out crops. Then we drilled down to 200 / 300m. To give an example, in the first drill hole we drilled we had a true width inter hole of 30m that was 4.77 per ounce per tonne Gold. The second hole we drilled was a similar sort of thing. 25m at 2.49 g/t and within that there was inter hole of 9.6m of 6g/t Gold. So if you look at the mineralisation there, it’s pretty wide zones and it’s got some similar aspects to mineralisation that we see up at Fruta del Norte.

We just announced a third hole and that had 25 metre true width of 4.5/tg Gold. So these are structures that out crop at the surface and we’ve been able to define them down to a depth of 200m / 300m. So right now we’re drilling those and I think that this discovery has a lot of momentum that can potentially move the share price if we continue to have success there.

Matthew Gordon: How much of your market cap would you attribute to the deals you’ve done with First Quantum, Anglo and BHP versus your own project? How do you break that down?

Marshall Koval: Obviously there’s optionality to the resources that we have. We have rightly four million ounces of Gold at Condor. Again, it’s exploration stage, sort of advanced exploration, not development. But I think it’s really hard to break it down, but I think if you look at – when we first announced a deal with BHP, the share price moved up to about 85 cents and then the market settled back down. I think most of the run – the $0.70 to $0.92 – had more to do with the camp zone. Maybe we’re seeing about half of our value from the Condor asset and maybe the other half from these JVs. It’s a hard thing to pin down but that would be my guess.

Matthew Gordon: And any more deals coming through?

Marshall Koval: We need to get inbound interest and it’s kind of interesting. I think what’s happened in Ecuador is – as we all know it’s …

Matthew Gordon: Tell us about Ecuador because it’s a relatively new mining jurisdiction. It’s mostly agriculture. So how have you been getting on?

Marshall Koval: There’s been some historical mining, primarily for Gold in areas like Zaruma and other parts of the country, but basically the country had a moratorium on new concessions being offered in 2008. Basically they had punitive fiscal regimes, so that kind of shut the industry down and I think it hit the bottom basically in 2014 when Kinross decided to back out of the Fruta del Norte deal. That was a world class Gold project.

I think what the government had was some budget of about $100 a barrel oil. They’d primarily been oil producer with most of the economy besides agriculture. And when that happened, when oil went down to $40M, $50M, in that range, it really blasted the economy of the country. And Correa was the President of the time and he was actually the guy that shut down mining, and he realised that he needed to open mining back up because they needed foreign breadth investment, and that was the best opportunity to give it.

So if you fast forward, this was sort of 2014, things started opening up. We were in the country around 2013 thinking things were going to get better, look at a lot of stuff, work with the government to tell them that they needed to improve their fiscal regime. And so after the Kinross deal collapsed, Lundin Gold acquired Fruta del Norte and Lundin and several other companies pushed on the government to get a better fiscal regime. So as we sit today, the fiscal regime is workable.

Matthew Gordon: What does that mean in terms of tax, royalties, etc?

Marshall Koval: Basically if you look at the effective tax rate in the region, a country like Chile has got the best fiscal regime and it’s 38% to 40% of the rents, if you like to call it that, of a project going to the government. If you go up to Peru, it’s 45, in that range, and Ecuador’s up around the 50%. So basically that change from… windfall tax is 70 per cent and a lot of other issues that Ecuador had, Ecuador was probably up in the mid-60s. The fiscal changes that have been made, sort of made it so that major mining companies – guys like BHP, First Quantum, Anglo American, a lot of New Crest, a lot of other players, have come into the country and are comfortable enough with the fiscal regime to invest.

Matthew Gordon: Can we just talk about shareholders, please? I know you’ve mentioned Ross Beaty. Obviously you’ve been working with him a long time, you guys have made a lot of money for yourselves, but also shareholders. What’s the breakdown here for Luminex? Who’s in it?

Marshall Koval: If you look at Page 6, that kind of gives you the stock info.

Matthew Gordon: Sure, but it doesn’t tell me who.

Marshall Koval: If you look at management and insiders, we have about 24% of the company. Ross has 15.4% himself. I’ve got about 4% and the balance is the rest of the management team. But also we have some institutions that have come into our last financing.

Matthew Gordon: Who are they?

Marshall Koval: Mainly at the end of the US and also there were some in Dubai. But basically what we have is a group of friends and family that have followed Ross in the group for quite a while. So if you look at it from that perspective we pretty much know where probably about 50% of the stock is, is pretty close to the group.

Matthew Gordon: But the rest of it is Canadian retail?

Marshall Koval: Canadian retail and US. We just recently listed on the OTC.

Matthew Gordon: Has that made a difference?

Marshall Koval: We see a lot more activity in the US. The US has always been important. Two of the funds that have come in pretty substantial ways in both Lumina Gold and Luminex are California based. So that’s an important aspect for us.

Matthew Gordon: You’ve got to move it up. You need more volume, you need more liquidity, need more trading, hence OTC I guess, but what else are you doing to get this promoted? I know when we spoke last about Lumina Gold, you were starting a process. How are you doing that Luminex?

Marshall Koval: So Luminex, given that there’s about 50% that we know of that’s long-term investors with the group in the story, that doesn’t leave a lot of free float out in the market. So one of the things we’re doing quite a bit is we’re marketing in Europe, the US and Canada and we’re targeting the retail investors. I think that’s going to be an important aspect going forward.

Also we’ve seen some funds that were buying in the market. We just completed a financing, and right now we have about $7.5M in cash on hand, so we’ve cash up pretty good to move things forwards. We’re not out marketing, looking to raise money but we’re continuously… Scott Hicks and myself are continuously working with investors. We have a large focus on retail investors now, so…

Matthew Gordon: When you say you’ve got a large focus on retail… What does that mean to you? What are you doing?

Marshall Koval: Doing a lot of town halls. It’s kind of interesting and it’s mainly focused on retail investors. We’ve got a pretty broad reach. It’s not just the US, Canada, but we’re seeing investors in Europe participate in these. We’ve had over a hundred people at a time, and so we’re reaching out continuously like that, we’re going to conferences. We’re at the spot conference in Vancouver next week and we have a Blue Fair. We’re really trying to get the story out as broadly as we can because I think we’re still in the early stages here. Obviously every CEO you’re going to talk to is going to tell you that his stock’s undervalued but I think there’s real… even with the move up into the 90 cent range, we still have a $47M, $48M market in cap, and any one of these projects we have significant success on, will see a substantial move from this point.

Matthew Gordon: Where do you see the value coming in? You’ve got some big names associated, they’re spending nearest down at $140M on some projects for you. You’ll still be left with a reasonable chunk of the companies or the projects after that, but how much of this is Ross’ company and how much is the Board actually doing to making decisions?

I look at Anfield Gold. Obviously that’s gone into Equinox along with a couple of other projects to create a super project, $800M market cap for Ross there and Equinox. Lumina Gold is sitting at around $170M, $180M market cap today. Luminex $35M, $40M. Okay. So is it a case of you take these things through following a plan or, because of the nature of your business, explorer, developer, you’re a little bit more free flowing in that? It’s a case of are there opportunities to maximise… How do you think about that?

Marshall Koval: I think the value drivers for us in Luminex is going to be exploration success, adding resources and making discoveries. A good example of that would be the discovery of the camp zone. It was never drilled. It’s right underneath our camp at Condor. Geologists from several companies – I mean this project’s been around since the 80s – sampled over the area and we had one of our geologists see some interesting rocks in a road cut and started to focus on doing work. He did sampling and trenching work. So it was a brand new discovery. The drilling was - also I mentioned to you earlier – we have a discovery in there. Now given the size of it, you could have a potential for a million / two million ounce deposit.

Matthew Gordon: So it does create value, but I’m more interested in the decision making. So Ross Beaty, big name and reputation. He’s got access to capital, all that good stuff. With Anfield, rather than grow it yourself, it was a question of “Well, we could or I can roll it into something over here.” What do the shareholders of Anfield get out of the Equinox deal?”

Marshall Koval: I’m on the Board of Equinox with Ross and several other Board members. That was the deal where we had the Curinga deposit and we had some other assets, and at the end of the day Curinga turned out to be a small project that will be a mine some day. But, you know, there’s a management issue. It takes as much effort to manage a small operation like that as it does a big project. So the idea there was Anfield was going to be the vehicle we used to build the Gold production company. That’s what Ross wanted to do. But at the end of the day Ross put a deal together to form Equinox and we had about $50M in Anfield. The idea there was to take the assets, the Arizona mine which was a brownfield site in Brazil and the Casa Mountain project in California, and advance those. So Equinox became the vehicle instead of Anfield. Today we’ve got two producing mines in Equinox. We’ve got a third mine, Casa Mountain that’s going to be put into production soon.

So that was the idea and that was the producing story. So if you go back to your question about the Board – we have a pretty sophisticated Board. Myself and John Wright handle a lot of the technical aspects and John’s the ex-President of Pan American Silver. He’s a technical guy. He’s on the Board of Silver Crest and Aero Copper. And Dave Farrell, for instance, he’s the capital markets guy. He’s on the Board of Fortuna. Don Shumka is on the Board. He’s experienced audit committee guy. He’s been on the Board of several large mining companies, and then we have Lyle Braaten who’s our attorney and he’s involved in government.

So basically the mandate of the Board is ‘Let’s try to maximise the value that we have in these assets. Let’s go out and explore. Let’s find projects. Let’s advance those projects.’ That’s measured, advancing these projects by de-risking them and moving them along towards the development chain.

So, if you look at the Condor project, for instance, with this recent discovery we’re planning on drilling 2300 metres here. We’re having a second drill rig come to site and if that starts to pan out, then we start to look at this thing as a development project and put it on the path towards PEA. So that’s where value will be created besides just outright discovery.

So then if you look at the Copper portfolio, the BHP, the Anglo American and the First Quantum deals, that’s going to be large scale upper porphyry deposit discovery and given the prospective terrains, we think out of those deals you’ll see some sort of major discovery. At least that’s what we’re hoping for.

Matthew Gordon: So how do you guys pay yourselves? How do you remunerate yourselves? Incentivise yourselves? You’ve only got 52 million shares here, so how does that work?

Marshall Koval: So when you look at it, the Board doesn’t get paid. We get options. The option grants are pretty modest.

Matthew Gordon: No salary?

Marshall Koval: Not for the Board, no. Myself and the management team that run the company day to day get a salary, but if you look on Page 6 there, for instance, issued in outstanding shares, we’ve got 52 million after this last financing. If you look at it on a fully diluted basis, it’s 55 million, and we don’t do warrants. We’ll do a discount to market financing, so basically there’s not a lot of dilution and like I say we’re tied on options. So really the upside in these financing… most of the management team participate in the financings and they have all the way through the various ones we’ve done – both in Lumina Gold…

Matthew Gordon: At market?

Marshall Koval: At market along with the other investors.

Matthew Gordon: This is what fascinates me about some companies. They just get it right. You don’t have many shares out. What you’re saying is the cost of your money is cheaper than… You don’t need to do warrants, so you don’t do warrants. You’ve got contacts. You’re talking to money from Dubai, talking to money from California. You’ve got the institutions. They all know Ross Beaty. They know your management team, so you’re not paying more than you need to. This is really important for funding a company.

Marshall Koval: Let me take that to the next level because we have an anti-dilutive mine set and obviously when you’re an exploration group and you don’t have income from operations, you rely on the capital markets to finance it as you go. But this last financing, we were over subscribed by more than $1.5M and we didn’t want to go there, so we cut it back. Our philosophy is don’t go out to the markets and raise any more money that you need. Given the success of the group and obviously with Ross’s leadership there, we have the ability to finance when we need to. So we try to minimise shareholder dilution and, like I said earlier, management and Board members often take the financing and Ross is usually the lead order when we do financing. So that’s a pretty strong message to the market.

Matthew Gordon: It’s a strong message to the market, and then top of that the types of deals that you’ve recently done with obviously First Quantum, Anglo and BHP in terms of funding projects and leaving yourself with a meaningful position at the end of it, that’s also great news for investors in terms of optionality.

Okay, fantastic on the money and the remuneration side of things. You’ve talked to us about Ecuador and mining in Ecuador. Do you think that the retail market understands the Ecuador story? Most people don’t know it and if I’m looking at the chat rooms, forums, various social media, there’s not a lot of talk about you. Why do you think that is?

Marshall Koval: So if you look at the Lumina Copper story. Ross took a view back in 2003 that Copper at the time was $0.85. It was going to go to two bucks, so he went out and he acquired ten really solid assets in mining friendly jurisdictions. So in the initial days it was pretty quiet and they went on and acquired these projects. We were in a building stage with both Lumina Gold and then we spun Luminex out, so we’ve grown in the investor market at a bit under the radar as we consolidated things.

Now we’ve consolidated our land position in Ecuador, the majors have come in and they have to do deals with groups like ourselves because all of the highly prospective properties in the country are in some junior ownership. So basically what you have is a lot of these companies have to come to us. So basically we’ve been quiet because we’ve been in the building stage. Now the story’s changed. We’ve got our position. We’ve got the prospects. We’ve got funding in place. We put off a lot of exploration risk up in these major companies that are really good technically. They can move our projects forward. We can focus on Condor.

We also have three other projects that are Copper plays that we’re continuing to do primary stage exploration work. We’re in a really good position to move forward and not dilute the shareholders. If all these JV's go through and $140M is spent on these projects and there’s discoveries, we would have diluted the hell out of our company to raise that kind of company to do it ourselves.

Matthew Gordon: I think it is smart. Obviously mining Copper, mining Gold have similar skill sets. You’ve got all the relevant skills set you need in house. Can you give investors and retail investors, new investors, reasons that Ecuador is a good place to be and why you think the way that you’ve structured these deals is going to work?

Marshall Koval: Ecuador is the last unexplored, geologically significant terrain in Latin America and probably the world. There hasn’t been a lot of systematic exploration in Ecuador because basically when the moratorium that happened in 2008, Ecuador set up the majority of the super cycle that we went through and basically it was shut down for business. Now it’s open for business, from a political risk perspective I think the best indication that it’s a viable jurisdiction is that all these major mining companies have started to come into the country.

There’s two mines that will put into production by the end of this year – Fruta Del Norte is one and then Mirador is the other. Mirador is owned by Tongling Mining as the operator and a partner. Mirador is a large Copper porphyry deposit and Fruta Del Norte that Lundin Gold has is a large underground Gold deposit. The prospective nature of Ecuador has come to fruition with these projects being built and there’s a significant pipeline of discoveries in the country. The Cangrejos work that we’re doing has a real good project and there’s a lot of interest.

So Ecuador is now a mining jurisdiction and there’s growing pains that go with it. Both the government’s learning, communities, dealing with the communities. We’re educating communities along the way. So that’s part of the story. But geologically it is great exploration. I’m an explorationist by training and I haven’t seen as much prospective ground anywhere else in the world that hasn’t been systematically explored.

So then if you go for the reasons that it makes sense for Luminex within the country – we’ve got $140 million of non-diluted financing coming from our partners and we have four million ounces of Gold on the books already at Condor, and we’ve made a major discovery at the camp zone. And then like you were talking out before, we’ve got a management team that’s been there, done this before. Our business strategy is to add value to these assets, not be the producer, move them onto somebody to put them into production and then exit.

So if you look at the Lumina Copper story, that’s what shareholders did really well when we exited these companies excessively. So we’ve got the ability to finance. We’ve got the technical team. We’ve got a really strong in country team in Ecuador, so I think we’ll be successful in advancing these projects, and I’m really excited about the prospects in Ecuador.

Matthew Gordon: You need liquidity in the business. You need a bit more turnover to drive this price up. What type of investor are you looking for?

Marshall Koval: I think we’re looking for the investors that understand the high-risk nature in Luminex exploration. I think they understand being patient, that discoveries will reward shareholders. So I think we’re starting to see a positive goal move recently. When we went into the country a lot, we’re looking at $1,100 or $1,200 goal. We’re up in the $1,400 range now. We haven’t seen junior equities like ourselves move up as much as the Gold price recently as a general rule. So I think we’re still at an early investment stage, but if a shareholder comes in and as we de-risks these projects makes more discoveries, we should see upward movement in a positive build it price environment. Plus also we have the optionality on Copper.

Matthew Gordon: Do you think liquidity and volume correlate with long term holders?

Marshall Koval: If you look at the float at the stock, we do have a lot of long-term holders and that’s why you don’t see large volumes. If we get three hundred thousand shares trading in a day, that’s pretty good. So the liquidity issue is definitely something that puts a bit of a lid on the upward movement right now. But positive news, we’re moving the stock and the more we reach out and get the story out to the broader retail base institutions, we should see things improve.

Matthew Gordon: You may have to consider issuing more stocks sooner?

Marshall Koval: That’s the issue that we’re talking about earlier, that non-diluted mind set, but you’re right.

Matthew Gordon: Marshall, thanks very much for the update. Fantastic news. Appreciate your time. Do stay in touch and let us know how it’s going.

Marshall Koval: Thanks a lot.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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