Restarting A $1B Metals Mine In A California OZ, With Darwin Mine

In this webinar, Nick Stone presents the Darwin Mine in California, a unique OZ project with a fascinating history and massive potential.

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You can visit the Official OpportunityDb Partner Page for the Darwin Mine OZ fund to:

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• Learn key details about the fund and related projects.
• Request more information from the fund sponsor.

Webinar Highlights

• History of the Darwin Mine in California, which has historically been one of the largest base metals mines in the U.S.;
• Overview of the potential for the Darwin Mine, estimated at $1 billion based on current prices;
• Summary of the metals in the Darwin Mine, including Zinc, Silver, and various minor metals;
• Positive environmental and social factors associated with the project;
• Live Q&A with OZ Pitch Day attendees.

Industry Spotlight: Darwin Mine

The Darwin Mining district is family owned, fully permitted, has adequate water rights and ready to begin. With local government support, this project certainly keeps to the spirit of the OZ program since it provides stimulus and jobs where they are needed most.

Learn More About Darwin Mine

• Visit OzoneCapMarkets.com

Webinar Transcript

Jimmy: So, without further ado, feel free to dive in when you’re ready. And thanks for joining us today, Nick. Really appreciate you being here.

Nick: Oh, yeah. My name’s Nick Stone. I’m the Chief Operating Officer for INYOAG and Darwin-based metal mine. Probably start with a little history lesson on the project. It started in 1870 mined till 1976. It was one of the largest base metal mines in the United States. It supported the United States through World War I, World War II, Hirsch [SP], Rockefeller, Anaconda Copper, all were involved in this project. It was actually gonna be the capital of California, but there was too much miner chaos, so they decided to move it somewhere else.

In 1976, my dad got out of the Marine Corps and made miner’s helper here, made lead miner and fired the last shot, and closed the doors on this. So, it’s been something that we’ve been involved in as well as my grandpa and several other people around this community that have worked on. Today, we’re fully permitted. Water rights are all in place. Everything’s all set up. We have 1,050 acres of property patented claims. We’ve drilled only 1% of the actual property because there’s just so much here.

And with the drilling that we’ve done, we’ve shown that we have approximately 150-year mine life. The infrastructure that’s in place is worth approximately $1 billion at today’s rate to create it. There’s 150 miles of underground tunnel, 38 miles of rail, and hoists are all in place. We have a little bit of work to do on getting the crushers and the mills and everything up to par, but it’s been going really well. We’ve been working at this for several years. All our water rights are all fully permitted and air quality is all set.

One of the big things is we’ve been working on is containment, which you can see in the picture there. Everything that we’ve done to date has been penny-pinched to the best quality that we can create. We’ve had some supply chain issues, but we’re doing really well with what we have. We’ve just recently started actively pulling samples out from underground, processing it. We just got our sulfuric acid delivery. So, I feel like we’re right at the brink of production.

On our reserves, the metals that we’re producing is gonna be a… primarily we’re after zinc, which will turn into a liquid zinc, which takes the 90 cent zinc to about $3 to $4. And then we’ll run it through a cryogenic dryer, and turn it into animal feed powder and animal supplements. That’ll turn that $3 a pound zinc into now $7 to $10 a pound zinc, which the way the supply chain’s going and everything is a really high-profit margin for the zinc.

We also have silver, germanium, indium, tellurium, antimony, copper. Several things that we didn’t put in our proformas that we know that is in the ground here, but we tried to focus on the major metals, and the things that we know for sure that we can guarantee is in the ground. That slide’s not working. Part of what we’re doing here is, in the whole opportunity zone space, we wanted to be different than any other mine.

We wanted to positively impact the community, focus on environmental, and be able to help people around us. So, part of what we’re doing is all our tailings after the process, rather than doing tailings dumps or ponds like they do in some of the big mines, all of that will go back underground to create structural backfill. So, you’ll have an Eimco track mucker under there spreading it. On top of that, the temperature of 58 degrees, and the humidity underground. These voids that we create, we can use that for document storage as well as bitcoin and cryptocurrency mining.

Most of the equipments’ in place. We’ve got the crushers, the mills. We’re trying to work towards getting a sulfuric acid plant, which is new by 3M. So, we’ll be able to use our sulfide ore to create our own sulfuric acid, reducing our production costs. And at the same time that sulfuric acid plant will be able to generate power. So, rather than focusing on a solar option to be completely net zero emissions, we’re gonna go the sulfuric acid plant route, which should give us enough power to run all our plants and the small community around here.

We plan on creating 350 jobs in the first year, which we’re ramping up now. We’re getting close to about 40 people out here. Year five, six, we’ll end up going to about 1500 jobs, and that’s when we increase our tons per day from 500 to 2,000 by driving the radial ore [SP] tunnel out the other side. Part of the deal structure is, I mean, we’re looking to raise $66 million. I think we’re about $10 million into that. We’re expected to hit $50 million in revenue this year. We’re hoping if with no supply chain issues and everything, hoping all that goes well.

Doug, again, the big thing that we’re showing on the screen is our EBITDAs, what we’re expecting. You can see when it goes to 28, that’s where we increase the 2,000 tons per day. The big thing we’ve been asked here is exit strategies. I know a lot of opportunity zones only run for 10 years, and then people want to get out. We believe firmly in our project, with 150-year mine life that nobody’s ever gonna wanna get out of this thing. But if they do, management, myself, my family, my dad, my mom all work out here. We would like first option, right of refusal on the exit strategies, shares, people that they have.

That’s just to wrap it up. Jack’s been doing this his whole life. I was underground here when I was 6. I feel like if you want the advice of somebody that’s in the real estate field, you go find a real estate professional. If you want somebody that knows what the hell they’re doing in mining, you find somebody that’s been mining their whole damn life. Underground 6 years old, Jack’s been teaching me everything I know. So, I feel like we’ve put everything into this project, our heart, our souls, everything, every bit of it. And I feel like I could go ahead and take any questions.

Jimmy: Yeah. Great. Well, thank you, Nick. And if you do have any questions for Nick about the INYOAG OZ fund or about Darwin Mine, please do use the Q&A tool in your Zoom toolbar. That was gonna be my first question for you, Nick. So, thanks for pulling that up. I was gonna ask you, how can our attendees here today reach out if they wanna learn more about the project, or request subscription documents, and ultimately place an investment into your deal.

Nick: Yeah, they can reach out to myself or Michael Merrill through Ozone Capital Markets. Javelin works well with us. They’ve been our broker on this since the start. And the raise is going really well. I’m open to emails, communications, somebody can call me. I’m open to discuss anything about our project.

Jimmy: And you’ve got the best email address I’ve ever seen, [email protected]. Hard to beat.

Nick: Yeah. It’s funny, my name’s Nick Stone and I turned out to be a miner.

Jimmy: That’s awesome. Well, we’ve got a few questions rolling in now. First question is, “Where exactly is the mine located?” Inyo County, California. Not one of the most well-known counties in California, but maybe you can tell us a little bit more about the location.

Nick: We’re about three and a half hours from Las Vegas and LA. We’re eight miles from Death Valley’s North Gate, outside of Lone Pine and Bishop Area.

Jimmy: Good. Well, that answers it then I think. And yeah, Inyo County, California, if you wanna look that up on a map, whoever asked that question. Question from Stewart here. He asks, “What is the expected annual return estimate for the first five years?”

Nick: I would have to dive more into the EBITDAs. I’m gonna be perfectly honest. I know I’m just a dumb miner. I could take you underground and I can show you how much a ton of ore is and what it’s worth, and how to process it and all that. But I let the budgeting and all that, the financials go into the CFOs hands, which is Linda.

Jimmy: Good. So, yeah, reach out to Mike and Nick via email and he’ll get that question answered. Mike did just chime in in the chat, by the way, Nick, that he’s got a new phone number. I’ll post that phone number in the chat now to everybody here. There’s Mike’s phone number right there for everybody. The one on the screen might be an old one or the wrong number, I’m not sure, but there’s Mike if you wanna reach out to Mike. A few more questions coming in here. Mark asks, “How have commodity prices changed since you started?”

Nick: Well, that was the big thing that shut this place down in 1976, China flooded the markets and commodity prices had crashed. Up until about late ’90s, early 2000 they weren’t really doing much. About 2007, they really started picking up. When this energy revolution started and everybody was freaking out for germanium, for super chips and computer chips, and Department of Defense stuff, and we started developing the uses for more of these critical minerals.

And then when COVID hit, everybody needed more zinc. The FDA required more zinc in everybody’s system, so they upped the mandatory what they spray on crops. So, we’ve seen commodity prices really starting to raise. And it looks like silver and zinc and gold and, I mean, copper, obviously with the energy revolution that’s going on, they’re all gonna go through the roof.

Jimmy: All right. We’ve got time for a couple more questions. Nick, before I cut you loose, Jacobo asks, “Who is guiding you through the QOZ process? What other business people are on board with you guys?”

Nick: We have Ruben Brown out of Las Vegas, which is our accounting firm. Javelin has been a huge part of guiding us through the opportunities zone process. The Inyo County representatives, officials all here helped us. They came to us and petitioned us and said, “Hey, we feel you would be perfect for the opportunity zone process.” So, we’ve had a whole team of people kind of helping us put this thing together as…

Jimmy: Excellent. Let’s see. Last couple of questions here I’ll throw your way, Nick. Let’s see, when was the mine last operational?” And I thought I had another question here. “What’s needed to get the mine operational?”

Nick: The mine was last operational in 1976. That’s when Jack fired the last shot and closed the doors. We mothballed it but since then, since about 2017, we’ve been working on it. My dad Jack put 25 million of his own money into assets, equipment, pouring it into this place. What we have left to do, I got to shift some conveyors, build some hoppers under them, so some metal fabrication, and move some conveyors around, really, line some tanks, and we’re getting real close to full production.

Jimmy: Awesome. Well, Nick…

Nick: Sorry. We’ve already begun pulling samples out, and I’m trying to get my pump set so that I can send some samples out to OMRI to get our certifications. The pilot plant is probably a few weeks out from being able to run the small 5 to 10 tons per day.

Jimmy: Awesome. Well, Nick, we’ve run out of time, but thanks for presenting with us today. Always great to hear from Javelin and their funds. And from Darwin mine here on our event at OZ Pitch Day Spring 2023. Thank you so much, Nick. Appreciate it.

Nick: Thank you, Jimmy.