JD Durkin: Joining us now is the CEO of Goldgroup Mining, Javier Reyes. Javier, really nice to see you here today on this Wednesday. Let’s talk all about this high-profile merger you just closed and a $122 million financing round. What does that unlock for you today?
Javier Reyes: Well, that merger that we consummated a few weeks ago closed the $122 million U.S. financing. That was led by the most important mining institutions in the country, like Franklin Templeton, Trafigura, Condor and others.
It gave us the opportunity to continue to consolidate in Mexico. The investment proposition is building a platform that can enable us to become the leading mining mid-tier company in the U.S. and Mexico so that we can continue consolidating these assets.
Also, we decided to make a big investment and take 19.9% into Luca Mining so we can share some of the upside on this great acquisition they did on Capstone’s asset, Cozamin, in Zacatecas, Mexico.
JD Durkin: Javier, you are scaling at a time that we are seeing gold back near its all-time high. How much does that pricing backdrop change the math for you, if at all, on deals such as this?
Javier Reyes: So the most amazing thing is that we started our acquisition process several years ago, when gold was still $1,500 per ounce, and we managed to secure amazing assets for a few cents on the dollar, which includes San Francisco in Sonora and Don David in Oaxaca.
The companies that previously owned these assets were multimillion-dollar companies that are trading on the NYSE, that we managed to take control of for a few cents on the dollar.
So now, of course, we paid for these acquisitions like if gold was $1,500. Now at $4,000, $4,300 U.S. per ounce, I guess we will have the opportunity to deliver cash flow to the investors and continue consolidating other mining assets in Mexico because we have a very strong balance sheet and zero debt as of today.
JD Durkin: Javier, what makes Mexico the right place to build a gold producer in this environment today?
Javier Reyes: Well, just first, I would like to be humble and accept that Mexico has failed to deliver the conditions that we should as a country. As you know, Mexico is a tough jurisdiction, but on the other side, Mexico is one of the most blessed natural-resource countries in the world.
And even though we have to really improve as a country and deliver rule of law and some of the things that your president has requested from us as a country, I think now it’s been a great opportunity because 98% of the team are Mexicans.
The best asset we have is our people. So we have managed to build an amazing team that can execute in a complex jurisdiction like Mexico, that is neighbor of the most important country in the world, being the U.S.
So I think this combination, again, even though we should really improve as a country, security and other things, I think the team has the skills to execute and be able to unlock the value required for the investors.
JD Durkin: Javier Reyes is the CEO of Goldgroup Mining. Javier, very grateful for your time. Thanks a lot for taking a few minutes out of what I’m sure is a busy schedule to chat with us today. Nice to see you.
Javier Reyes: Thank you, JD.
