Metallic Minerals – Exploration Update At The Keno Silver Project And The Significance Of The Alexco Takeover By Hecla For The Keno Silver District

Scott Petsel, President of Metallic Minerals (TSX.V:MMG – OTCQB:MMNGF), joins us for his take on the significance of the recent news of Hecla Mining (NYSE: HL) acquiring Alexco Resource Crop (NYSE: AXU) to the Keno Hill silver district in the Yukon.   We start off by noting the good work Alexco did in defining a high-grade silver resource that was attractive enough to incentivize a larger producer to enter the district and acquire the project.  Next, I asked Scott about what options this could give Metallic Minerals at their Keno Silver Project as far as a potential takeover partner, toll milling options, or if they were more interested in seeking out another larger producer to partner with on their project.  Scott outlined that they would do what was most accretive for value creation for shareholders, but that there are a number of potential options on the table.


Next we reviewed some of the key exploration targets at the 3 Project areas:  high grade intercepts from the Formo target at Keno West, the broad bulk tonnage style intercepts at Fox, UKHM, and Zone 2 targets at Keno East, as well as the Caribou target in the Central Keno Area.  We review the big picture exploration strategy for 2022 as being focused on resource drilling with the plan to compile the last few years programs into a maiden resource for next year, but also balanced with true blue-sky discovery drilling at many of the prospective targets on their 35km mineralized trend.


We then transitioned down to the exploration plans for 2022 at the La Plata project near Durango, Colorado.  There are 16 different potential copper-rich porphyry centers that the exploration team wants to test at La Plata, as well as following up on the higher-grade gold/silver epithermal vein systems, to continue making discoveries and adding to existing resources.  We wrapped up getting an update on deals being made at the Klondike Gold District alluvial operations, where some of those are moving towards a small production scenario.


If you have any follow up questions for Scott on Metallic Minerals, then please email us at either or



Click here for a summary of the recent news out of Metallic Minerals.

    Jul 07, 2022 07:57 PM

    How This Junior Exploration Company Sits in one of the World’s Highest-Grade Silver Districts

    Jocelyn Aspa – The Market Herald – 06/15/2022

    “Metallic Minerals (TSXV:MMG, OTCQB:MMNGF, Forum) – a Metallic Group Company – is a Canadian exploration that is focused on developing high-grade silver and gold projects in Canada. Notably, the company’s core Keno Silver Project is located in the historic Keno Hill Silver District in Canada’s Yukon Territory. The company also has its La Plata silver-gold-copper project, which is located in the La Plata district of the Colorado Mineral Belt. The Market Herald’s Brieanna McCutcheon was joined by the company’s president, Scott Pestel, to discuss what the company’s been up to and what shareholders and investors can expect moving forward.”

    Jul 07, 2022 07:06 PM

    Well timed interview guys! thanks.

      Jul 07, 2022 07:58 PM

      Much appreciated JustTruth. Yes, good to get Scott’s take on the Alexco takeover by Hecla, and what it means for Keno Hill.

    Jul 07, 2022 07:29 PM

    I‘m looking at a 5 year chart of Alexco. This deal is a slap in the face of the Alexco-shareholders. Dead money for so many years. Sold at almost the lowest price in more than 5 years.
    This is terrifying and will keep away even more possible investors away from the sector.
    Why shoudn’t I expect a similar outcome with Metallic Minerals? Or any other company?
    I feel absolutely discouraged and just can’t understand that, apart from that tiny phrase „Investors Mighty Not be all to happy about it“, Shad isn‘t more talking about this aspect of this for us frustrating deal. What are we here for? This is one of the worst experiences I had in the sector and I’m in it more than 20 years now.
    And it’s even considered as good for the region.

      Jul 07, 2022 07:22 PM

      You have to say well done to HL management for buying at pennies on the dollar though.

      The only way you will make up the losses owning HL though is 1) silver makes an absolute moonshot into the hundreds of dollars 2) HL executes at least as well as its peers and 3) the US govt doesn’t nationalize HL well before then.

        Jul 07, 2022 07:36 PM

        Hi Maco. There have been plenty of times in just the last 6 years, where Hecla (HL) has gone up 3-6 times in value, and that should more than make up for most paper losses that any beleaguered Alexco (AUX) investors may have at present, if they are underwater on the trade.

        Personally I’ve made far more money trading Alexco many dozens of times over since the secular bull market started in the PMs since early 2016 so it has already been a net positive in my portfolio for some time, but I am way underwater on the most recent trade . I would need a 3 bagger in Hecla to bail me out of this most recent AXU trading position in it, which has been my worst trade in the Silver space over the last year (out of the 20 silver stocks I currently hold positions in). Even at that it will not require Silver to be up in price in the hundreds of dollars…. not even close.

        A move up in Silver to $30 and a little upward momentum in the sector would likely do it for HL, and it has been provided multibagger returns a number of times. It’s probable that a break above into the mid $30s in Silver prices would likely result in a big enough move to fuel much more interest in the silver mining stocks.

        Just on May 28, 2019 HL traded down to $1.21 and then traded up to $3.51 on Dec 30, 2019, and then on March 16, 2020 it traded down to $1.40 and then by May 18, 2020 it was up to $3.57, and then by August 3, 2020 it traded up to $6.79 and by May 31, 2021 it made a high of $9.44. The action in 2016 was similar where on Jan 19, 2016 it was traded down to $1.45 and on August 8, 2016 it was up at $7.26. On December 27, 2010 Hecla traded up over $11, and in March 10, 2008 Hecla was trading up over $12. There is no reason to believe that Hecla’s days of multi-bagger returns are over, as none of those moved happened in an environment where Silver was even over $40 much less over $100+.

        After being in business for 125 years, I’d suggest that Hecla has executed better than 99% of their peers over that time horizon, so it reasonable to assume it will continue to do so.

      Jul 07, 2022 07:36 PM

      Yeah, I mentioned that longer term shareholders would likely not be that happy with this deal, but the reality is that we see opportunistic takeovers all the time in this industry or others. Was the takeover of Gold Standard Ventures last month by Orla Mining any different?

      The acquiring company wants to “buy low” just like investors do, and then realize that value accretion in their portfolio of assets.

      Also the point of this interview was to highlight why this transaction is important for Keno Hill and how it gives it gives Metallic Minerals more optionality with a much stronger operator and producer next door. That was the takeaway and reason for having Scott on, but surely wasn”t to discuss investors in Alexco that rode it down (me included), and may not have been made whole yet. Legacy Alexco shareholders opportunity now resides in riding Hecla back up higher when the sector turns.

      The reality is that there are very few Great Bear take outs at the top of their pricing rallies, like we saw last year when Kinross took them over, and far far more takeouts that happen when a company is distressed. That’s how it’s always been.

      One potential strategy investors can employ is to position in distressed companies that are good takeover candidates, for the take over premium, if there seems like an imminent potential. The risk is there could be a longer wait than anticipated or the company could implode.

      I just wrote last week that Alexco was a likely takeover candidate and that a larger producer may scoop them up. Anyone that saw that potential could have bought low and gained on the return.

      The same thing happened last year a few times where I mentioned it seemed likely Corvus would get acquired by Anglogold Ashanti, or when I mentioned some smaller royalty companies would get scooped up and pointed out how undervalued Golden Valley Mines, Ely Gold, Nomad Royalties, and Elemental Royalties were, and now all 4 of those were acquisition wins in my portfolio.

      It isn’t rocket science, but investors have to be willing to buy when companies are truly floundering. I remember people scratching their heads when I got into Crocodike Gold, Richmond, Klondex, Avnel, etc… near their lows, pointing out how crappy thry’d been. That was the point though, and I got in right before a big boy took them over for a win.

      You gotta be in it at the right time and price to win it. Most didn’t positioned when they were cheap, and thus watched all those takeovers mentioned above from the sidelines.

      I’ve been in several dozen takeouts over just the last decade and many of them I got into when the company was quite undervalued for just these various scenarios, but it’s a strategy I actively utilize and spend time considering and researching.

      Will it really be a surprise if some of the other distressed producers or lifeless developers are taken out next week, next month, or next quarter while they are at low valuations? No… it won’t.

      If train wreck producers like Pure Gold, or Elevation Mining, or Americas Gold & Silver or Argonaut or McEwen Mining get nabbed as they languish at their lows, would it be a surprise? No. Would longer term share holders win? No. Would they whine and gnash their teeth about the transaction if announced? Of course they would, because they chose poorly.

      What about beatup gold developers like Integra, Sabina, Wallbridge, Liberty Gold, Perpetua, Newcore, Troilus, Treasury, O3, Nighthawk, Cartier, Montage, Mayfair, Probe, Westhaven, Bonterra etc…. They all have great projects with millions of ounces of gold…but their valuations are low historically.

      Would long-suffering bagholders be rewarded if a larger producer got opportunistic here? No, of course not. But investors that buy these current lows could be rewarded if they buy low and sell on takeover news. It’s still a risk though, because what if the takeover never comes? (like Seabrige, Novagold, or International Tower Hill mines that have sat on the shelf with huge resources for years). Eventually, most of those will get taken over, but there is an opportunity cost in waiting, that has to be balanced with the price point available.

      The other thing is to consider is which side of the equation you’re on, because if you’re a Hecla shareholder (as I am), then you’ve gotta be pretty excited about this deal acquisition of Alexco, because they just picked up 120 million ounces of silver equivalent ounces and also an already built an operational processing center and mill that is ready for production. Score one for Hecla.

    Jul 07, 2022 07:53 PM

    I am concerned about the appearance of an orchestrated take down of metals/miners prices with a buyout offer way below true value of the asset. It is twice as disturbing when Regulators neither prosecute Market intervention or parasitic buyout offers that leave assets (property) of shareholders unprotected from corrupted money interests. Very concerning.
    The real issue is paper price manipulation. If the Government is going to allow that and allow “bargain” purchases, then it is time to put Regulators and Government Officials in jail. That would include Central Bankers and Wall Street. Once the public approves the above type of behavior, it is the end of “ownership” of property except for the few. The few would in all cases be the Criminals in a Society.

    Jul 07, 2022 07:06 PM

    Lake, with equity market manipulation as pervasive as you describe, then why bet on it.

      Jul 07, 2022 07:13 PM

      I find joy in thinking that if they take everything I got, I may die of old age before they can spend my estate. Their pleasure will be dampened.

        Jul 07, 2022 07:24 PM

        That’s the spirit lake. LOL
        Plenty of bandits out there. Perpetually talking their book. ie Savage for the second time in as many weeks, is promoting a five dollar fee to access his premium service. Guessing first opportunity missed the mark.

          Jul 07, 2022 07:57 PM

          Why is Gary Savage a bandit for simply charging $5 to access his premium material as a offer?

          People pay tens of thousands to hundreds of thousands for worthless college diplomas without blinking.

          People pay for piano lessons, golf lessons, language and reading tutors, for real estate courses, for dating courses, for pottery class, for martial arts classes, for books, for online courses…

          Why is it suddenly a crime for someone to get compensated for offering a teaching service on charting or investing that others find value in?

    Jul 07, 2022 07:16 PM

    Good thoughts. I need to take golf lessons during market hours.

      Jul 07, 2022 07:41 PM

      good point Lake, you don’t lose money on a deal for learning how to play golf, different story getting a deal how to play the market.

        Jul 08, 2022 08:19 AM

        I don’t follow the logic there Jonsyl.

        Yes, you “lose money” when ever you pay for any training or course, in exchange for the information exchanged or skills learned. There is no difference in charging someone for golf lessons or charging someone for charting lessons.

        In each case the student “loses money” to gain the knowledge or skills.

    Jul 08, 2022 08:16 AM

    As I said, I’m in the sector for a long time and I can’t remember that a later bought out stock fell so sharply just before it was taken out. It may have happened, but I don’t remember.
    Mr. Petsel and Shad have a lot of good things to say about Alexco. But obviously the company’s leaders are not interested in giving away their baby for a decent price. I suspect they will be greatly awarded by Hecla. Since when both companies are negotiating the deal? And what did the shares do in that time?
    What if the same kind of proceeding happens with Hecla? A bigger shark comes and fabricates a wonderful crash of Hecla and takes them out for almost nothing?
    Maybe we can’t do anything about it, but we shoudn’t be so complaisant and even applaud these kind of events. I repeat: From an investors perspective this is a desaster and damages the sector.

      Jul 08, 2022 08:03 AM

      Michael, if you have been in this sector as long as you have mentioned and truly followed any number of takeovers, then this kind of pattern of the larger company being opportunistic when the smaller company is in duress is nothing new and we’ve seen it repeatedly. It is in no way unique to Alexco.

      I can’t remember hardly any takeovers where there weren’t longtime bag-holders vocally upset about the transaction. Then they gnash their teeth about the current management and go off grumbling about how it isn’t fair. Rinse and repeat.

      In each instance they could have decided to exit the story for a smaller loss but made the decision to hold on when the company was struggling. So it is always a personal choice, and many good projects have their value plundered by poor execution from management teams. It should also be pointed out that there were also plenty of positive trade set ups in most stories like this, including Alexco, if people bought the dips and sold the rips.

      >> I asked you up above – was the recent news from just last month where Orla Mining (ORLA) is taking over Gold Standard Ventures (GSV) any different? (No, it’s just like it)

      Dave Erfle quipped that GSV was a “take under,” since hardly any longer time shareholders made any money on it. The comments from long-time shareholders are just as irate whining about the tragedy… but they’re the ones that rode it down and didn’t exit as management diluted it further and further.

      Again, for me personally, I expected GSV was a potential takeover target after having watched it flounder for years. I was actually watching updates from VOX, who holds a NSR on South Railroad that GSV explored and developed, and decided the project was advancing again and was really beat up, so a bigger fish would likely swallow it up soon.

      I had just bought back in recently, and exited with a small gain on the news of the takeover, and then got back in after it dropped about 20% after the news was digested and in these tough markets.

      Essentially it was the same pattern though, of a fall from grace, a good project, and an opportunistic larger company moving in on it when times were rough. GSV used to be the darling of the exploration and development space, having got up around $3.50 in 2016, and today it trades at $0.31 as it awaits being acquired. That’s over a 90% decline from the peak enthusiasm and valuation and every bit as bad as the fall Alexco took. Just par for the course really.

      If you go back and look at many of the other takeovers I had already mentioned up above they were the exact same types of patterns, where management failed to execute, then the stocks were punished by the marketplace, and a bigger company got opportunistic as they swirled the drain.

      If you’ve been in the sector following it for two decades then surely you’ll remember some of the more recent implosions that led to predatory takeovers like TMAC, Harte Gold, Primero, Klondex, Crocodile Gold, Richmond, Pershing, Avnel, Rye Patch, Alio, Luna, Trek, Newcastle, etc…(just to name a few). Those companies were trainwrecks and put out of their misery by more competent operators at their lows…. just like Alexco. We’ll very likely see the same thing with current distressed producers like Pure Gold, Elevation Mining, Argonaut, Aurcana, Americas Gold & Silver, or McEwen mining, or all the low valued developers that have solid projects already mentioned up above in the prior response back to you.

      Now, with regards to Scott and I praising Alexco for their fantastic drill results and resource definition, that was well-earned. There were periods of time where AXU surged up multiple-fold on bonanza grade silver drill hits, and you or anyone could have traded Alexco for big outsized wins during those periods. I know because that’s precisely what I did, and I’ve traded AXU about 4 dozen times and made money in about 3/4 of those trades.

      I find it interesting that people like to constantly point out worst case scenarios, as if everyone piled in at the high and held to the low, ignoring all the other positive trading set ups that occurred over many years. People love to play that Strawman argument in every stock or sector.

      The truth is there were many times investors could have traded AXU for multibagger gains when they were an explorer and developer. I know because I experienced it starting for me with the big surge higher in early 2016, and for many years after that. It was only when they decided to move into producer status that so many problems began and the shareprice tanked….just like Pure Gold.

      Look, the success the exploration team had at Alexco, which simply can not be ignored when they defined over 120 million ounces of high grade resources. There were different periods of discovery too, so not just at the older Belekeno or Lucky Queen areas that they delineated, but much more recently at the newer high-grade Flame & Moth, Birmingham, and Birmingham Deep deposits which were absolutely grand slams. Those were best-in-class and some of the highest grade silver deposits delineated anywhere on the planet, but especially in Canada. To not recognize those as fantastic results by the Alexco team is ridiculous.

      That work was quite commendable and is what Scott and I were praising. It is germane to the discussion because that same mineralization extends onto Metallic Minerals land as evidenced at Formo and Caribou.

      Again, the point of the interview was to discuss the similar mineralization that Metallic Minerals has to what Alexco discovered, and to point out that now they have far more competent neighbors operationally with Hecla moving in to Keno Hill. It proves the big boys are interested in the kinds of deposits Alexco found, and so if MMG can replicate those discoveries (which they are well along the way of doing), then they will have quite a bit of optionality for their Keno Silver Project.

    Jul 08, 2022 08:50 AM

    Comparing Alexco and Gold Standart: loss in the last 6 month
    Alexco 72%
    Gold Standart 18%
    So this is a different cup of tea.
    Nothing against highlighting the geological parallels between two companies.
    But the behavior of the Alexco-management was irresponsible since they punished their loyal supporters.
    Given the share-price already being so low, why not even fight for a decent premium?
    From other sources I heard that the recent problems would have been not too difficult to overcome.
    It’s contraproductive if we, and I mean you and me and all us don’t express our dissatisfaction with such a negligence of shareholders interests.
    But I understand the 2 differences:
    1. For me the deal smells and for others it doesn’t.
    2. And some see massive dilutions and others don’t
    Maybe my English isn’t good and clear enough to express what I want to say.
    If somebody would take over Puregold now without any premium, now that would be something entirely different and this kind of comparisons for me is not acceptable.

      Jul 08, 2022 08:48 AM

      Michael everyone is free to have their own opinions, just like both you and I do, but not their own facts.

      Only looking at a 5 year chart on Alexco or looking at 6 months are completely arbitrary points in time to base one’s arguments on, so I could see where some of your confusion and frustration is coming from.

      Go back to when the PM sector bottomed in late December 2015 or early Jan 2016 and then look at how well Alexco did in the 8 month surge until August of 2016. AXU went from a low of $0.32 in Jan 2016 to a high of $2.50 by Aug 2016 for almost an (8 bagger). Your 5 year chart conveniently excludes that time period, but there were good gains to be had, even if people didn’t catch the precise lows or highs. An 8 fold increase leaves lots of room for investors to get into position and make outsized returns.

      – Then there was another run in AXU from Dec 2016 to Feb 2017
      – then another from Nov 2017 to Feb 2018
      – then another rally where it more than doubled from Jun 2019 to Aug of 2019
      – then another rally where AXU tripled (3 bagger) from the pandemic crash low in Mar 2020 to the PM Peak in Aug 2020. Again, plenty of room for investors to buy low and sell high, that would have more than made up for any of the recent losses of 60-70%.
      – then there was another rally from Nov 2020 to Dec 2020
      – then there was another solid tradable rally from March 2021 to May 2021
      – there was a steep decline after that May rally, but the PM sector bottomed in Sept of 2021 at the end of Q3 and AXU was no exception and rallied from Sep 2021 to Nov 2021.
      – Even this year there was a nice rally in AXU from Jan 2022 to March 2022

      So there were PLENTY of opportunities to get into AXU for a tradable rally, because again, the vast majority of mining stocks should be bought on dips and sold on rips, not held for long periods of times. That’s how it’s been for decades now.

      Just arbitrarily picking a 5 year chart or 6 month chart is just that… arbitrary, and who buys at those exact times and sells at those times. I get that is useful to look at a period of time for comparisons or performance, but it would be far more instructive to look at the pandemic crash low that affected all sectors across the board in March of 2020 or go back to when mining stocks bottomed in late 2015 or early 2016, or more importantly, the many specific lessor troughs and peaks that make up actual trading that investors utilize in reality when trading stocks.

      It’s the same thing with comparing GSV over 6 months to AXU over 6 months to make your case they weren’t alike because the declines were different. Again, GSV went from trading in the $0.30-$040 range in late 2015 up to $3 in the 2016 surge and is now trading again at $0.30 for much larger crash than AXU before finally having the larger producer ORLA come in and scoop them up for a 90% off sale from their all time high in this cycle.


      In my opinion as someone that was involved with both companies, the takeover or “take-under” deals Alexco and Gold Standard Ventures are very similar in many regards.

      – Both transactions left the majority of long-term shareholders well underwater
      – Both the acquiring larger companies, Hecla and Orla got the good deal and “bought low.” (something retail investors could learn a thing from, as most of them are selling now instead of accumulating quality projects… but what’s new about that?)
      – Both smaller companies had really good projects – Keno and South Railroad are top tier projects in solid jurisdictions, so that has never been up for debate
      – Both companies at one time were market darlings, and there were fantastic tradable rallies in both for investors that bought during pullbacks, and sold during the bullish surges
      – Both companies had share prices that eventually stagnated and took a hit as the management teams didn’t execute on continuing to build shareholder value
      – Both companies continued to dilute shareholders with more and more capital raises, but didn’t use those raises to build enough shareholder value to outpace the dilution
      – Both companies were taken out during market weakness near their lows, which was wise on the part of the acquiring companies, but bad news for longer term shareholder that just sat in these stocks without trading them during the good rallies, or limiting losses during corrective moves.

      Pure Gold would be another great and very similar story if it was to get acquired (by say Anglogold Ashanti) at where it is valued currently. PGM had a fantastic run as a developer leading up to first gold pour coming out of the pandemic crash low in March through to Dec of 2020, and then completely crapped the bed by stringing together a number of missed guidance, missed grades, lower production, several dilutive capital raises, and lost all shareholder confidence.

      If someone has been holding Pure Gold for a while and didn’t take chips off the table after that epic run in 2020, then that is on them for poor portfolio management, and likewise if they didn’t get out of the train wreck in 2021 or at least limit losses when it became clear they weren’t going to get the ship turned around.

      If Pure Gold got taken out next Monday, there would certainly be a wave of whining bagholders shouting at the sky about it, and they’d feel just like you do about Alexco, or that GSV investors feel about their takeunder deal. However, investors could just as easily get positioned now in PGM and then potentially play for that takeover premium and come out with a win should a 30-50% premium be offered in an acquisition.

      It’s all about when people buy and sell, but in fairness the management teams at each of these companies didn’t deliver over for over a year now and in these markets that creates a selling waterfall. What is a shame is that all of them had really built something worthwhile prior to this period of underperformance, had drilling success, permitting success, defined great resources, and created a very good project. In all 3 cases, the wheels came off the cart when the management team quit delivering on creating more shareholder value, starting diluting more, and lost confidence that they could keep executing. There are plenty of other examples I already provided in the prior two responses to demonstrate this is quite common in the mining sector unfortunately.