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Interview with Glenn Mullan, President of PDAC; Chairman, CEO, and President of Golden Valley Mines, Uranium Valley Mines, Cleghorn Minerals and Chairman of Abitibi Royalties Inc.



Golden Valley Mines Ltd. (TSX-V: GZZ) is an extremely successful Canadian project generator working in virgin areas that haven't yet been explored. Golden Valley typically tests initial grassroots targets while owning a 100% interest therein and then seeks partners to continue exploration funding. Golden Valley Mines, together with its subsidiaries, holds multiple property interests in gold, base-metals and energy mineral projects in Canada (Québec, Ontario and Saskatchewan). We learned from well-respected Glenn Mullan, President of PDAC, Chairman, CEO, and President of Golden Valley Mines, Uranium Valley Mines, Cleghorn Minerals, and Chairman of Abitibi Royalties Inc., that the company enjoyed a successful year 2016, going up over 300%. Golden Valley has a strong loyal base of long-term shareholders like Rob McEwen, and the company's management is one of the major shareholders as well. Now, Mr. Mullan is busy expanding his new small company called Uranium Valley Mines, adding properties to it, closing financing and going through the name change (to Val-D’Or Mining Corporation).



Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-chief of Metals News, interviewing Glenn Mullan, Chairman, CEO, and President of Golden Valley Mines. Also, he is Chairman of Abitibi Royalties, Uranium Valley and Cleghorn Minerals. I know you have an excellent background, Glenn. You've accomplished a great deal, and I would like you to tell our readers about yourself, your background, how you got into geology and mining, and give us more insight into your career.

Mr. Glenn Mullan: Great. Thanks for the opportunity. I read a book as a young fellow, called Klondike. The author was a gentleman named Pierre Berton. He'd written a good number of novels already about Canadian folklore, history, but this one really captured my fancy because it was about the Yukon, the Chilkoot Pass, and gold discovery back at the turn of the last century, 1897. Just the story and the depiction of the hardships that so many people endured, and how many were motivated to leave their homes simply because of this elusive search for gold. Most of them were American, from the Midwest and other areas that had been newly opened. They moved straight north. I just loved that story, and it motivated me to look more closely at that as a vocation.

Got the degree in geology, Concordia University in Montreal, Department of Earth Science, and have never worked at a conventional job. Became a self-employed prospector while I was in year one at university, and used that to pay my way through, staking claims, doing deals, keeping royalties, and assembling a fair-sized portfolio over the years, so that by 1995 a brokerage firm contacted me and asked if I would entertain the prospect of taking all of these royalties, which numbered over 100 by then, public. That became the business plan for Canadian Royalties Inc., which had the ticker symbol of CZZ on the old Alberta Stock Exchange back in 1990. I think it was just over 120 grassroots royalties by the time it was listed.



One of the NSR’s reverted to us, we worked on it and it is actually a mine in production now. Canadian Royalties was a good idea, and it evolved quickly. It was a northern Quebec nickel, copper, platinum, palladium project near the better-known Raglan mine, then owned by Falconbridge. Canadian Royalties enjoyed very good fortune in that its very first drill hole, MXNW-01-01, means the first hole drilled in 2001, but it was also the first hole we ever drilled as a company, a spectacular discovery of massive sulfides of nickel, copper, platinum, palladium.

Ultimately, that company was bought by the Chinese in a hostile takeover. It was actually the first foreign hostile takeover of a natural resource play in North America. Be that as it may, it moved forward. They've spent $2 billion U.S. on it to date in infrastructure. Given its the far area of northern Quebec, that $2B translates into roads, a port, an icebreaker, a vessel to ship the ore to China, and all of the accommodation and infrastructure for the mine. It's in full production and a pretty good success story.

In any event, we moved from that on to something a little closer to our home base in northern Quebec called Golden Valley Mines. Golden Valley's actually named after Val d'Or, the town I live in. Golden Valley is a very conventional grassroots explorer. We use very standard, methodical, hypotheses. They're very traditional in that we're looking for gold and base metals in the Abitibi greenstone belt in virgin territory, for the most part, but using conventional geological strategy, complimented by modern geophysical technology.

We're not flogging dead horses. We're not looking at old properties that have been drilled and killed multiple times. We look for new ideas, new properties that have not been staked or worked in the past, and staked largely for geophysical signatures and targets, and then explored by Golden Valley. Some of those have moved rather quickly forward as well, and one of them is the company you mentioned at the outset, called Abitibi Royalties, RZZ. It's done very well given that it's a royalty holder, including part of the Canadian Malartic gold mine, which is near here as well.

Dr. Allen Alper: That's fascinating, a wonderful story I'm sure will inspire many other young people to try and do the same thing.

Mr. Glenn Mullan: I hope so.

Dr. Allen Alper: That would be great. Could you elaborate on what differentiates your companies from other companies?

Mr. Glenn Mullan: Yes, certainly. For one thing, most of the junior mining sector starts with a material property or a property of merit and focuses on that. The business plans tends to be very similar. There are over a thousand public mining companies in Canada. The investor's choice is a pretty broad spectrum. Most of them raise money, and focus on the key property, and try to expand a resource that might already be known. Maybe the grades have changed over time. Maybe the metallurgical recoveries have changed. Maybe the commodity prices have changed over time. Often that's the business plan for much of the sector.

Ours was a little different because we really wanted to focus on what a prospector does, which is finding something new in an area that's maybe already known to be prospective, but always working in an area that's grassroots or virgin, an area that hasn't been worked for the most part. That's always been our business plan, whether it was gold or base metals, to focus on areas that have not been worked in the past and to test geophysical targets, geochemistry, standard geological ideas, sometimes related to shears, fault zones, generally well-known controlling structures in the case of gold, or favorable rock units, favorable stratigraphy in the cases of base metals. We tend to confine our search to copper and zinc on the base metals side, and gold on the precious metals side, although we've dabbled in different commodities over time, including diamonds in West Africa, and different commodities in Latin America and other parts of Africa.



Dr. Allen Alper: That's great. You’ve shown using the basics, really works in geological prospecting and exploration. You've applied it very successfully.

Mr. Glenn Mullan: Thank you.

Dr. Allen Alper: Could you tell me a bit about some of your companies’ main accomplishments in 2016 and your plans for them in 2017?

Mr. Glenn Mullan: Sure. In the case of Golden Valley Mines, it enjoyed a pretty good year. It was up over 300% through the 2016 calendar. If that were the only accomplishment, it would be a good one. We started the year with the TSXV juniors pack, languishing around 10 cents or even under that per share. Really, it was such a struggle. It was a struggle to just survive. We, at Golden Valley, have been around for 17 years now. We've enjoyed very strong support from our base of shareholders. Many of them have been long-term shareholders, who've increased their positions over time. Some of them are notable and well-known, like Mr. Rob McEwen, the ex-chairman of Goldcorp and currently probably best-known amongst your subscribers for his work with McEwen Mining. Some of the others who might not be as well-known are just as important to our shareholder demographics mosaic. That would include a Chinese nickel company called Jilin Jien, Jilin being the province in northern China. They're a pretty significant shareholder and have been for six years.



We're based in Quebec, and one of the things that distinguishes this province from others in mining exploration is the support from government entities. That's not a compulsory thing. They always ask if the company would consider that they become a shareholder. They don't force it. It's not obliged. There are two Quebec government labor funds that have become significant investors in Golden Valley, and they've been a key part of our success over time as well, because they're really good shareholders. They always attend the annual meetings. They do their jobs seriously as far as a shareholder's rights and privileges, and ensuring that we apply appropriate governance at the same time.

Some of the other shareholders are simply well-known participants in retail markets, so pretty much all of the main brokerage firms in Canada: Canaccord, Raymond James, Haywood Securities, to name a few of them. They all have a very strong presence in our market. Typically, they are the retail brokers with their client list, so a very broad spectrum. We have over 4,000 shareholders to the best of my knowledge, which is pretty broad for a high-risk, grassroots mining story.

Back to the question, “What were your accomplishments?” We finished the year at around 40 cents, which is pretty significant considering we started at 0.08 cents per share. That was largely the manifestation of an even better year by one of our core holdings, Abitibi Royalties, RZZ. Abitibi enjoyed an equally spectacular year. It was up several hundred percent. I think it was 200%, 250%. It's the holder of royalties in part of Canada's largest gold mine, the Canadian Malartic. Because Golden Valley owns nearly half of the issued shares, over 5.6 million shares of the approximately 11 million shares of Abitibi, so Golden Valley owns 49% of the issued equity, and if you include the shares held by myself and our other board members on Golden Valley, we hold over 53% of it, so really Golden Valley trades as an echo of Abitibi Royalties. When one is up, the other's up. When one is down, the other is down. As Abitibi goes, you could expect that Golden Valley will largely follow the same trend.

At the same time, we've tried to make it known that we're more than just a holding company. We're an explorer. That property came from work that we did and invested in, and ideas that we tested, and we continue to do that independently. That work continues week by week. We're always looking at new projects. We're always testing projects we already hold and trying to find another one like Abitibi Royalties. That's the short answer. We started the year languishing with the whole pack, and by the end of it we're enjoying a much better and improved general market, but certainly our own market had really started to reflect the core holdings in the Abitibi Royalties shares.

Dr. Allen Alper: That's great. Rob McEwen is an important investor in both Abitibi Royalties and Golden Valley Mines.

Mr. Glenn Mullan: I've enjoyed some very good support from Mr. McEwen several times, and I'm very proud of that. The first time was with Golden Valley Mines in 2006. Mr. McEwen at that time bought 9.9% of my company, Golden Valley. That was not for a gold property. Most people associate Rob with being “the gold guy”, but that was actually for a uranium proposition in Quebec. That worked well enough. We actually enjoyed good technical success, exploration success, good results. It moved forward, and unfortunately as often happens in the mining industry, something that no one would have anticipated struck and we were left with a moratorium prohibiting uranium exploration in Quebec. That more or less froze us in our tracks and we had to find something else to do with that particular property and company.

That was how I came to know Rob McEwen, but through that 9.9% holding in Golden Valley, he later bought about the same percentage of Abitibi Royalties, about a year ago. He has such an amazing track record that when it becomes known that Rob has invested in a company, as often happens, the market follows because of his general reputation. We saw that in the aftermath of his investment in Abitibi Royalties a year ago. He paid about $5.30 a share, if I'm not mistaken, and within a few days it was trading at $9. That's more or less where it finished the year and where it's still trading right now. The investment by Rob McEwen caused a flurry of interest and a lot of new shareholders to take a look at Abitibi Royalties.



Then, late in the year, I was very pleased to see that he also supported an initiative that's a lot more grassroots, and certainly a very fledgling one, called Uranium Valley Mines. Uranium Valley is a much more traditional grassroots explorer, but Mr. McEwen again supported us by buying a bunch of shares in Uranium Valley. That becomes the third company in our very little stable that he has supported, so we're very proud of his support and certainly hope that again we can be successful and bring some more exploration success back to him.

Dr. Allen Alper: That's fantastic. I've interviewed Rob about 12 times through the years, starting when he was the founder of Goldcorp. Not only has he had an extremely successful career, and knows how to invest and how to grow a company, but he also is a great philanthropist. He's supported breakthrough basic medical research, Nobel Prize winning research.

Mr. Glenn Mullan: Yes, stem cell and other research.

Dr. Allen Alper: Right. That's really wonderful. Thomson Reuters has forecast that gold price will average $1490 an ounce in 2017 and silver will increase beyond $21 an ounce. What are your thoughts on the gold and the silver market, and also copper and zinc?

Mr. Glenn Mullan: I think we're already in a healthy environment as far as gold prices go. I've always tried to make sure that our little companies are not entirely beholden to any one commodity. If we are more exposed to the gold sector, and we certainly are, then it doesn't require a significant appreciation in gold for the projects to have merit.

For Golden Valley Mines and Abitibi Royalties, the price of gold, as it is right now, is very attractive to us because on those key properties in Malartic, Quebec, Val d'Or, Quebec, and the other side of the Abitibi greenstone belt in Ontario near Timmins and Kirkland Lake, most of the gold projects that are either in production or advanced stage are already very economical, very robust projects with strong cash flows derived from that. They don't require a significant appreciation for them to be economic, they already are amongst the most profitable mines in the sector. That is why many of the most senior companies in the gold sector, including Agnico Eagle, Yamana Gold, Goldcorp, Kinross and IAMGOLD are all active in the Abitibi Greenstone Belt.

That said, one has to be cognizant of the overall market and the supply-demand forces. Certainly gold likes turbulence, and boy, was there ever a year like 2016 for turbulence? That was true in politics, in currencies, in countries, whether it was Syria and Russia or the United States or Brexit or Donald Trump and the collateral phenomena. There was certainly no lack of headlines that would normally be the kind of thing that would make gold prices very skittish, and skittish is good for gold. That's exactly why it likes as a hedge against inflation.

We've always tried to make sure that people look at us as an exploration company and not necessarily a gold company. Gold is our main asset. Gold is the main property holding and the main focus for us right now, but going back 15 years, there have been different times where other commodities were generally equally or even more highly-regarded by the market. There was the diamond rush in the early 90s. We were a significant participant in that. Base metals, whether it's our friends in China because of the supply-demand, they continue to have a voracious appetite or emerging economies, these are all catalysts for strong base metals consumption. Those are commodities that the world needs and that are abundantly found in this area (Abitibi Greenstone Belt) where we're located.

We've continued to make sure we have exposure to a basket of commodities, so copper, zinc, gold, silver, certainly, and from time to time uranium, that was how I came to know Rob McEwen, and other commodities as the market dictates. It's one thing to have a deliberately, carefully selected spectrum of commodities, but we try not to run off in every direction. We stay focused with a few of those core commodities, and that's really been most of our bread and butter going back for most of the past 15 years or so, copper, zinc, and gold namely.

I guess I'm happy with the gold price the way it is right now. Certainly higher is always better, but I'm mindful of the fact that gold is a metaphor for many things in our world, and if the gold price were to go for instance to $2000 or $5000 an ounce, that would probably mean it would cost an awful lot of money to fill your car up with gas, and that a liter of milk would probably cost an awful lot, because it would imply a failed capital system. That's not necessarily good for us, either, even if it's good for gold. I guess I'm happy with where we are, hope it gets better, but always mindful as to what that means to the greater good overall.

Dr. Allen Alper: I appreciate your insights and sharing them with our readers. What are the primary reasons our high-net-worth readers/investors should consider investing in Golden Valley Mines and also Abitibi Royalties?



Mr. Glenn Mullan: Sure. At the outset, I never ever tell anybody that they should invest in our companies. All I ever ask people to do is, if they are investing in this sector, take a good look at us. We have a track record. We've been here for a long time, pushing 20 years. We're the largest investors in our own companies. We have skin in the game. We're major shareholders. In most of our deals, we're the major shareholders, and I was the largest shareholder in Golden Valley for 16 years. It was only this time last year that a Korean gentleman named Jimmy Lee bought 15 million shares. At that moment, he became the largest shareholder. It's the first time I've had somebody other than myself holding more than I do.

We encourage people to look at the sector, but recognize it's definitely high-risk and it's not for everybody, but for those who have tolerance for commodities, currencies, mining opportunities, I would strongly encourage them to take a good look at Golden Valley Mines because our strategy is quite unique. Our strategy is quite distinct in that we're looking at bona fide grassroots projects that have not been worked, for the most part, historically.

We're testing new ideas in stable and comfortable domains. Quebec and Ontario are very hard to beat in terms of favorable environments for mining, mining exploration, development, good infrastructure, good support from municipal and provincial governments, affordable hydroelectricity, and so on. This is a very good place to find a mine, whether it's Ontario or Quebec. That's always why we've chosen to be based here, although occasionally we step well outside our beaten path and work from here and look at other places on other continents.

The Abitibi Greenstone Belt is really one of the places that has offered great discoveries for investors, whether it was the Kidd Creek mine in the 1960s, the largest VMS copper-zinc mine ever found, or multi-million-ounce gold deposits. There have been over 100 gold mines that have produced more than one million ounces, and there are several that have produced more than 10 million ounces. There aren't very many places in the world that offer those kinds of compelling production statistics, so that's why I like this area. That's why I set our company up in this area, and that is why I live in this area, and if investors do have tolerance for high-risk opportunities, I think our strategy is unique and interesting enough they might consider at least taking a look at us.

In terms of Abitibi Royalties, we have one asset. It's not complicated. We're not looking in Africa, South America, other countries, Greenland. We're not in multiple commodities. We have one royalty package, on one property, in Malartic, Quebec, and we're very focused on the opportunity that's being developed by Agnico Eagle and Yamana Gold on that core project, the Canadian Malartic gold mine. That's where we hold our 3% NSR over the east portion of the mine, including a new discovery called the Odyssey zone and a separate 2% NSR on a portion of the Charlie and Gouldie Zones. That's one reason, by itself, to consider Abitibi Royalties, and if your readers do their own due diligence and read about Abitibi's track record and the disclosure to date, it makes for a very exciting opportunity.

The royalty space is a very finite one. There really aren't very many significant small companies. There's Franco Nevada and Royal Gold in the larger-cap space, and then you take a gigantic leap down to the next tier. There are very few small companies that offer interesting prospects, but Abitibi Royalties would have to be very close to the top of that list. I think if your readers do their own research, they might find something of interest in either Abitibi Royalties for the royalties aspect or Golden Valley Mines for the more conventional exploration opportunities.

Dr. Allen Alper: That sounds very good, very good reasons for our high-net-worth readers/investors to consider investing in Abitibi and Golden Valley. Is there anything else you'd like to add, Glenn?

Mr. Glenn Mullan: We're always ones to take a flier on high-risk propositions, grassroots. As long as the premise is bona fide, as long as there's a strong scientific basis for the proposition, we'll look at pretty much anything in the Abitibi Greenstone Belt. We have a new small company, of which we're the largest shareholders. I'm talking about Cleghorn Minerals Ltd. (JZZ on the TSXV). It is a very small company, just listed late in 2016, and we are working on our single property near Matachewan, Ontario.

Dr. Allen Alper: That sounds excellent. Anything else, Glenn, that you'd like to mention?

Mr. Glenn Mullan: No. We're always available, and if anybody does have any direct questions or general curiosity, or is wondering about the substance behind any of the disclosure, we're always happy to answer direct questions from shareholders, stakeholders, or anyone performing their own due diligence. It's a critical part. People should do their own due diligence before they buy a share of anything.

Dr. Allen Alper: That sounds great. Thank you very much, Glenn. I appreciate you taking the time to tell us about your excellent and outstanding company and background.

http://www.goldenvalleymines.com/

Glenn J. Mullan
Chairman, President, and CEO
Golden Valley Mines Ltd.
152, chemin de la Mine École
Val-d’Or, Québec J9P 7B6
Telephone: 819.824.2808 ext. 204
Email: glenn.mullan@goldenvalleymines.com


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