Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me for the first time from Finders Resources is executive chairman Dr Russell Fountain. Russell welcome to FNN. Can you start by introducing Finders Resources, what do you do? Are you in production? And when did you list?
Dr Russell Fountain: We see ourselves as an emerging mining company. We’ve commenced small scale copper production from a demonstration plant on our Wetar Copper Project in Indonesia, and we see growth potential through a very promising gold, silver project at Ojolali in South Sumatra. The company was formed by myself and a few mates in 2004, we listed on the A market in London in 2006, and we completed the dual listing on the ASX in June 2007.
Clive Tompkins: So where is your share price today and what does that equate to in terms of market cap?
Dr Russell Fountain: As of today the share price is around 37 cents, which gives us a market cap of just over AUD$40 million.
Clive Tompkins: Turning to your two projects now. Can you give an introduction to each, their size, location, and stage of production?
Dr Russell Fountain: The Wetar project is located on Wetar Island in eastern Indonesia. That is our flagship at the moment. It’s the site of an old Billiton gold mine that was mined in the 80’s, and with that we inherited a lot of infrastructure, wharf, jetty camp and that sort of thing. It’s a coastal location and very high grade, low stripping ratio open cut. And we’re looking to develop that at 20,000 to 25,000 tonnes per year as a cathode copper, as a heat bleached solvent extraction, electro-winning operation producing pure cathode. Scheduling production for that from some time next year, late next year, for full scale production, and we have currently got a definitive feasibility study under way scheduled for completion in August this year. As part of that feasibility study we built a commercial scale demonstration plant which has been operating since February and producing five tonnes of copper a day, or 150 tonnes a month, which is now providing us with quite a significant cash flow. Our other project is the Ojolali gold silver project. That’s a very promising epithermal gold system in South Sumatra, where we have a 72 per cent interest. There is a 150,000 ounce start-up oxide gold resource there and we are looking to increase that and develop that in sequence after we finish the development of the Wetar project.
Clive Tompkins: Russell, how is that Finders Resources came to be operating in Indonesia? Do you have experience in that part of the world?
Dr Russell Fountain: The founders of Finders; myself, Chris Farmer, and Ian Noice, have a 40 year operating history in Indonesia. Chris has actually been living there since 1991, and so we go back a long way in Indonesia. And all of us were involved in the original gold mine and in its discovery or operation, the Billiton operated, so we have been watching that project for a long time and that’s how we actually got involved in it.
Clive Tompkins: Indonesia recently introduced new mining legislation; does this have an impact on your project?
Dr Russell Fountain: We’re actually very comfortable with the new mining legislation. One of its main thrusts is to increase value added for mineral projects in the country and as the first producer of pure cathode copper in the country, it’s a win, win for them and us, we’re right on track with what they want.
Clive Tompkins: Finders Resources also has a stake in Geopacific Resources, how did this come about?
Dr Russell Fountain: Geopacific is a pure exploration company focused in Fiji. Finders was involved in ceding its listing on the ASX a couple of years ago, and we see that as an ongoing growth path for Finders along the line. We have a fairly small scale interest in it at present but they’ve recently announced some very exciting results on their Faddy’s gold project and we’re very hopeful of a significant re-rating on the market for Geopacific over the coming months.
Clive Tompkins: Looking at your financials now. How much cash do you have? What’s your burn rate? And will you need to tap the market later this year?
Dr Russell Fountain: We have a little over $1 million cash in the bank at the moment. And with the income from our demonstration plant we’re basically cash neutral going forward at current copper prices. With our feasibility study coming in, in August we wish to fast track the expanded development and we will certainly be looking for additional funding after that.
Clive Tompkins: In terms of your projects have you had any interest from potential partners?
Dr Russell Fountain: We have had very strong interest from a wide range of partners, ranging from financial institutions to potential off take partners, and also the banking industry, and there is still money around. And in our most recent fund raising, we got very strong institutional support from RCF out of Denver and also Acorn Capital based in Melbourne, a micro-cap specializing in resources, and they are welcome additions to our register. We actually have a very strong institutional shareholder base.
Clive Tompkins: Last question. What makes Finders Resources different from other junior miners?
Dr Russell Fountain: I guess the underlying thing, like all resource companies, we have a first rate resource base in the Wetar copper project. It’s very high grade for an open-cut, its got a very low stripping ratio, and as well as that its an acid producer so we don’t actually have to buy acid for the project which is a key factor and a key cost element in most copper leech operations. We have a real quality resource. We inherited a lot of infrastructure at the project’s site form the old gold mine, including camp, wharf and road network which needed minimal upgrading to get functional. So we’ve got a real quality project, we have got a highly experienced board which reflects the quality of the project that’s in there. We have got a lot of Indonesian operating experience and we recently augmented what was originally an exploration oriented board, with the addition of Rob Thompson, who worked with me on the Girilambone copper project which was the first sulphide copper leech in Australia, as development manager. He has got a huge amount of experience in delivering projects through South East Asia. Michael Stirzaker has just come on board as director of finance, and we have also welcomed onto the board Quinn Roussel from RCF in Denver as a major investor in the company. So we have a very strong board, we have very strong projects, and we have a very committed board because between the founders we only nearly 20 per cent of the company. And with RCF coming on board, the board control is something like 25 per cent of the company at the moment. So we are totally motivated in the shareholders interests to make it all work.
Clive Tompkins: Dr Russell Fountain thanks for coming in and introducing the company.
Dr Russell Fountain: Thank you very much.
