In conversation - Douglas Hurst Interview Part 2

Part 2 of 2. In a wide-ranging interview, we talked with Eclipse Gold Mining (TSX-V: EGLD) Director Douglas Hurst about leaving chips on the table, access to capital now that the shine on gold is back, and his outlook after the completion of initial drilling at Eclipse's flagship Hercules gold project in Nevada. Douglas has a long track record in identifying assets, unlocking value and creating shareholder success. He was executive chair of Northern Empire, acquired by Coeur Mining for $117 million in 2018; founder of Australian producer Newmarket Gold, acquired by Kirkland Lake Gold for $1 billion in 2016; and founding executive of International Royalty, purchased by Royal Gold for $750 million in 2010.

Q: Northern Empire included yourself and Mike Allen, who served as President & CEO and has the same position with Eclipse. The runway from company launch to acquisition was short, but you have mentioned it benefitted both shareholders and the acquiring company.

Douglas: Eclipse's Hercules and Northern Empire's Sterling projects are both shallow oxide gold and located on the same trend in Nevada. Sterling is a more advanced exploration project but still has significant value to unlock. There are three other deposits in the north part of the project where we intersected shallow oxide gold. We did quite a bit of drilling around the edges of those deposits before Coeur Mining acquired the project. And they've done very well with it too. There is significant exploration potential at Sterling to grow the existing deposits and multiple new, undrilled targets that remain untested. You want to leave some chips on the table for the acquirer. You want the company to be successful with the assets that you have bestowed with them. It's a small industry and you may want them back at the table at a future time. Right now, we're focused on unlocking value at Hercules and seeing how things unfold.

Q: There has been a long dry spell for many companies trying to raise capital in the gold space from about 2012 to 2019? Has access to capital improved in what is now a robust gold environment

Ironically, I've never made as much money as I have in the last five years owing to the success of Newmarket and Northern Empire. However, access to capital has been a challenge. Raising $25 million in June 2015 to create Newmarket and acquire Australia's Fosterville gold mine proved really difficult. I'd flag that time as the bottom of the market. However, 14 months later, we sold it to Kirkland Lake Gold for $1 billion. The lesson here is having the funding to get you to the finish line. The groups that have done it before and have access to capital in poor markets are the ones that can hit the ball over the fence. That's why it's great to have Pathway Capital on board at Eclipse. They have raised over $2 billion in equity financing and have been involved in several billion dollars in M&A transactions. Our recent $12 million raise is a testament to this, it was upsized, overallotted and underpinned by the certainty of a bought deal.

Q: Eclipse completed an initial drill program at Hercules. You're a geologist who has also spent time as a mining analyst and consultant, what's your opinion on the initial work in terms of prospectivity?

Douglas: I was optimistic from the moment of being boots on the ground. When you visit the project there is a lot of alteration on the surface. It's very clear the rocks have been baked and beaten up – a good indicator for Nevada's trademark low sulphidation epithermal gold mineral systems. Previous to drilling, the average grade of the surface samples we took was close to 1 g/t gold, suitable for the profile of an open-pit deposit. The initial drilling just completed demonstrated good continuity with multiple intervals of oxide gold greater than 50 metres. Drilling suggests mineralization is open for expansion both along strike and at depth. Geophysics also shows nice anomalies associated with where we intersected mineralization and it appears the anomalies are getting stronger to the south which is a great sign.