TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH HAZELWOOD RESOURCES
(ASX:HAZ) EXECUTIVE CHAIRMAN, MARK MCAULIFFE
Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me for the first time from Hazelwood Resources is Executive Chairman Mark McAuliffe. Mark welcome to FNN. Can you start by introducing Hazelwood Resources, what do you do? Are you in production? And when did you list?
Mark McAuliffe: Thank you Clive. Hazelwood Resources listed in 2006 on the ASX. We listed initially as a nickel play but very quickly found that our focus became a tungsten play, in the same region the Cookes region in the Eastern Pilbara near Nullagine.
Clive Tompkins: Ok so, where’s your share price? And what does that equate to in terms of market cap?
Mark McAuliffe: Well the share price has been rather buoyant in recent days, at close yesterday we were 24.5 cents, which equates to about a $30 million market cap.
Clive Tompkins: Last year we saw a shake up in the mining sector, what effect has this had on your plans?
Mark McAuliffe: Well we were very fortunate. The strength of our project led us to having incredible support last year, in the worst of the global financial crisis we raised $3 million, in the middle of 2008. And that enabled us to keep traveling and doing what we needed to do with drilling and doing our metallurgical test work, and that has resulted in us then getting to a point where we were able to raise another $3 million just recently to finish our pre-feasibility study on our Cookes Creek tungsten project.
Clive Tompkins: Let’s turn to your key project now. You’ve just mentioned that you’ve raised $3 million to complete the pre-feasibility study for the Big Hill tungsten project at Cookes Creek, how big is the resource? And what’s it worth at current prices?
Mark McAuliffe: Well the resource, we put out our maiden JORK estimation about three or four months ago, and that was 8.9 million tonnes at a grade of 0.17, which is a medium grade for a tungsten deposit. We have been doing further drilling to upgrade the resource and we anticipate a resource upgrade towards the end of August 2009. In terms of current day prices, even on our maiden JORK resource that’s about $300 million in ground value, U.S. dollars.
Clive Tompkins: And when do you anticipate being able to make a decision?
Mark McAuliffe: Well the pre-feasibility study is scheduled to be completed at the end of September. We are well and truly on track to complete that milestone and then I’d imagine that in October/November the board will sit down, do an analysis upon what we’ve seen from the pre-feasibility study and make a decision to proceed. At this stage all the lights are green, we’re very pleased.
Clive Tompkins: And assuming the project gets the green light, what happens next?
Mark McAuliffe: Well following the pre-feasibility study we may well go into a definitive feasibility study, that would take approximately six months and then we would be looking to commence construction early to mid 2010 with production commencing at the end of 2010.
Clive Tompkins: So what can investors expect over coming months?
Mark McAuliffe: Well there’s a lot of news coming out. With the pre-feasibility study there’s lots of different aspects that we’ve been investigating and will be reporting to shareholders. The next significant milestone we would expect to be the announcement of an increase in our JORK resource, those numbers are being complied at the moment. And we have some drilling results due out in the next few days, and once those drilling results are out into the model we should be able to complete our re-estimation. There will also be information on the metallurgy and engineering, culminating in the release of the financial model, Capex and Opex estimates. So a lot of information to the market over the next four to six weeks.
Clive Tompkins: Can you tell us about your other projects?
Mark McAuliffe: Well as I indicated at the outset, we started as a nickel company. We went to Cookes Creek to look for nickel sulphides because there was clearly evidence that there were nickel sulphides there. We actually did some drilling at the Anomaly Hill prospect at Cookes Creek, but then the market turned and there’s not a strong appetite for nickel at this point of time, but given its nickel sulphide’s and we had some really interesting exploration targets we will be pursuing that with some vigor once the tungsten project is away. We also have some iron ore that has been identified in the south eastern portion of our tenements and we are going to continue to some exploration, probably do some drilling on that next year to determine the extent. So that will keep us rather busy with the tungsten project bubbling away as well.
Clive Tompkins: Looking at your financials now. How much cash do you have? And will you need to tap the market later this year?
Mark McAuliffe: At the moment we have $2.4 million in the bank but we’ve virtually finished paying for our pre-feasibility study, there’s only a little bit more that has to go out, so we have enough cash on hand to take us well into 2010. In terms of tapping the market, nothing in the very near future but clearly we’ll have to make a decision at some stage as to how we fund the definitive feasibility and fund building the plant to get the mine in production. But those decisions will be made once the pre-feasibility has been concluded and we’ll have more to say on that towards the end of this year.
Clive Tompkins: And what about interest from potential partners, are you looking?
Mark McAuliffe: Blow away with the interest. China is the dominant market both as the largest producer of tungsten and the world’s largest consumer of tungsten. So almost from the day we announced we had a tungsten project we’ve been approached by various Chinese parties, and those discussions are continuing. There’s also very strong interest in the non-China world, there are a number of companies who wish to have a source other than China so that they have a little more comfort that the source of supply doesn’t have some of the risks that some people perceive might come from a market that dominates and particular commodity. And so North America and European parties have been talking to us for some considerable period of time. We will be attending the tungsten conference in Vancouver in September and we will probably progress discussions at that stage.
Clive Tompkins: And last question. What makes Hazelwood Resources different from other junior explorers?
Mark McAuliffe: Well I suppose what really distinguished us very early on in the peace is how far focused we were on driving one particular project to go from a junior explorer to a near term producer as quickly as possible. And I think that the results speak for themselves. We move very quickly and to have achieved that during the global financial crisis I think that says something about the quality of the board that we have; people who are motivated, driven, very experienced in their particular areas of specialty - and that has certainly helped. In terms of the deposit itself, it is certainly shaping up to be a world class tungsten deposit. At the moment it is open on a big hill in two directions, east and west, and it’s open down depth. And we have just announced to the market, very significant drilling results from McLeods area to the west of the Big Hill deposit. So this could certainly be a monster, only time will tell.
Clive Tompkins: Mark McAuliffe, thanks for introducing Hazelwood Resources.
Mark McAuliffe: Thank you Clive.
ENDS
