Finding Efficiencies in Different Jurisdictions

Q: What were Marlin’s 2015 highlights, and what did the company do to endure the current hostile situation?

A: Marlin Gold underwent two main changes in 2015. The first was the changeover in management, where I took the role of CEO and Chairman, and the second was the incorporation of Sonora Resources’ personnel. The biggest change to take place since its integration is that we now have a more focused mine plan. This plan aims to obtain the high grades of the mine in a quicker and more efficient manner than what was previously being done. We laid the groundwork to access those high grade zones in the second quarter of 2016. Additionally, Marlin is not only carrying out exploration in Mexico to expand its assets but it is leveraging on the current market downturn to aggressively acquire other mining assets in different jurisdictions. Our royalty subsidiary, Sailfish Royalty, has an underlying stream where it will provide the construction capital to build the mine and in return it will be receiving an initial 40 percent of the gold production at US$700/oz until the principal interest is returned, after which its share will drop to 20 percent of production. In addition, we sold the El Compas silver-gold development project located in Zacatecas to Carnarc Resources and Marlin is the largest stakeholder. In this project Carnarc is advancing at a much faster rate because in the past it was a low priority asset for Marlin.

Q: What are the steps you are taking to increase the production and cash flow of La Trinidad?

A: We are focused on reaching the high grade zone as quickly as possible. This means we made the decision to defer the south-end of the pit and focus on the north end, and when cash flow begins we can return to the south side of the pit. We accelerated the access to the high grade, and if gold prices continue to be depressed at U$700/oz, the south entrance of the pit should remain part of the property. We have a new mining contractor that has a much more efficient fleet, lower costs, and a higher degree of productivity, which has reduced Marlin’s monthly run rate from US$3.2 million per month to approximately US$2 million.

Q: What breakthrough technologies or innovative processes have you implemented to be more competitive?

A: Our mine in Mexico and our project in the US are both open pit heap leach mines that use technology that has been proven and tested. We prefer building small assets with proven technology and thinking of ways to efficiently operate, and then growing from there by applying best practices in terms of our geology. Mexico happens to be a jurisdiction that embraces medium sized open pits and small scale, and these low capital intensity type of projects fit Marlin’s profile.