Transcription of Finance News Network Interview with Gascoyne Resources Limited (ASX:GCY) Managing Director, Michael Dunbar Carolyn Herbert: Hello I’m Carolyn Herbert for the Finance News Network and joining me from gold exploration and development company, Gascoyne Resources Limited
(ASX:GCY) is its Managing Director, Mike Dunbar. Mike, welcome to FNN.
Michael Dunbar: Great thanks very much, nice to be here.
Carolyn Herbert: Could you start by giving us an introduction to Gascoyne Resources?
Michael Dunbar: Gascoyne is a Western Australian focused exploration, gold exploration and development company with three main assets and projects in Western Australia. We’ve got the Glenburgh gold project, which is a plus one million ounce gold resource, inland from Carnarvon and the Dalgaranga gold project, which is 750,000 ounces, inland from Geraldton around 70 kilometres from Mount Magnet, in Western Australia.
Carolyn Herbert: Can you tell us about your portfolio, its potential and its stage of development?
Michael Dunbar: I will spend most of the time talking about the Dalgaranga gold project, that’s our flagship. We’ve got 750,000 ounces as I mentioned there; we’re going through a prefeasibility study at the moment. We finished a scoping study in June of this year, which showed there’s potential for 60,000 ounces of production, for between six and 10 years. And our exploration since then has shown that there’s potential to increase that to closer to 80,000 to100,000 ounces, from around six to seven years.
That’s our starting point. That will provide the cash flow, high margin asset that will provide the cash flow to then allow us to grow our projects and move into the development of Glenburgh as well.
Carolyn Herbert: Looking at your 80 per cent interest in the Dalgaranga gold project. What’s that expected to deliver in terms of gold quantities?
Michael Dunbar: The scoping study suggested up to 600,000 ounces of gold would be produced out of the project. Now the prefeasibility that we’re working on at the moment, will see exactly what the production profile looks like. But we’re aiming at around 80,000 to 100,000 ounces from that project, and then we’ll build on that through the development of the Glenburgh project. But that development will happen out of the cash generated from Dalgaranga.
Carolyn Herbert: What’s currently taking place and what’s the priority for the next six months?
Michael Dunbar: Good question, we’ve just completed a capital raising. So what we’re aiming at doing now is completing the prefeasibility study for Dalgaranga, and then on top of that, a massive exploration push. None of our projects have really had a big exploration push since the mid 1990s, and so there’s a massive amount of exploration potential that really has been completely forgotten. And so what we’re wanting to do is aggressively continue that exploration push, but also the development studies on both projects as well.
Carolyn Herbert: Now to your other near-term development project Glenburgh. What does it contain and what do you know of the economics so far?
Michael Dunbar: Glenburgh contains a joint resource of over a million ounces. We’ve already completed a prefeasibility study on that and it’s got over four years of life at 73,000 ounces per annum so far, and costs of under $1,000 an ounce. So very economic, but that’s only the start as well. That project will become a multimillion-ounce system. It’s just a matter of putting the exploration dollars into the ground, to really see that exploration potential evaluated fully.
Carolyn Herbert: The company recently completed a heavily oversubscribed $2.5 million placement. Where will the funds be used?
Michael Dunbar: We will be splitting the funds probably at Dalgaranga and it will be spent on exploration. A large chunk of exploration funding, because we’ve got so much exploration potential that has not been evaluated. And on top of that, we’ll be doing prefeasibility studies for the project as well. And we are aiming for that to be finished in the first quarter of next year. So we’re aggressively exploring, as well as completing the development studies that we want to complete.
Carolyn Herbert: Taking a look at the price of gold, it has made a recovery over the last couple of months. But what are you expecting going forward and in Aussie dollar terms, where is the price now compared to a few years ago?
Michael Dunbar: The price has recovered in recent times in US dollars, but probably more importantly in Australian dollars, because we are Australian and can sell our gold in Australian dollars. $1600 gold price now is fantastic. It’s come off where it was from its peak, but it’s still incredibly strong. And the margins that you can generate from these assets, and this is really what the producers now are highlighting, the margins that gold projects can develop and produce, really are absolutely fantastic.
And so really what we’re wanting to do is get into production, even if it sits at the current levels that’s fantastic, it’s great margin business. I expect it will increase, but even if it doesn’t increase, the projects are still very, very viable at these levels.
Carolyn Herbert: Finally Mike, where would you like to see the company 12 months from now?
Michael Dunbar: Within 12 months we would have the development studies finished at Dalgaranga. I would like to be in a position to be talking about having completed financing on development, but we’ll have to wait and see on that front. But also a massive exploration push, I think we’ll see a massive amount of the untapped potential of our assets identified.
And I think we’ll start seeing that reflect the share price performance, and also getting the Gascoyne story out there. We’ve been flying under the radar now for far too long and getting the story out there to the wider community, I think is important. And I think the news flow will do that.
Carolyn Herbert: Mike Dunbar, thanks for the update on Gascoyne Resources.
Michael Dunbar: Fantastic, thanks very much for your time.
Ends
