TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH VENTUREX RESOURCES LIMITED (ASX:VXR)
MANAGING DIRECTOR, TIM SUGDEN
Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me for an update on its projects is Venturex Resources Managing Director, Tim Sugden.
Tim welcome to FNN. Can you start by introducing Venturex, what are you looking for and where do you operate?
Tim Sugden: Well Venturex is a company that’s listed on the Australian Stock Exchange and its primary focus is the development of copper zinc deposits in the Pilbara Region of Western Australia. And also the company has a major interest in the development of gold deposits in Brazil.
Clive Tompkins: Thanks Tim. Okay so where’s your share price and what’s your market cap?
Tim Sugden: Well currently the share price is around 9.5 cents which gives the company capitalisation of around $100 million.
Clive Tompkins: And Tim who’s been supporting the stock to this point?
Tim Sugden: Well our largest supporter is the Regent Pacific Group out of Hong Kong who has taken up a number of placements and entitlement issues with the company, to help us develop the VMS Projects in the Pilbara.
Second largest shareholder is Straits Resources who we acquired the Whim Creek Project from - then directors control around 10% of the stock. We also have quite a few institutions from the East Coast who participated in recent placements and after that we have a fairly large group of retail investors.
Clive Tompkins: Looking at your projects now Tim and starting in the Pilbara. You had several projects in the Whim Creek area famous for its long history of copper production, what’s the geology of the area?
Tim Sugden: Sure, well the Whim Creek deposits are hosted by Archaean sediments and within these sediments there are a type of deposit called VMS, meaning Volcanogenic Massive Sulphide and these are good hosts for high grade copper, zinc and lead. At Whim Creek we know around three significant deposits being Mons Cupri, Whim Creek and Salt Creek, and then there’s a host of other exploration targets around there. So they constitute the bulk of our known resources at Whim Creek.
Clive Tompkins: Tim so what are you targeting and can you tell us about the grades?
Tim Sugden: The primary production target is copper which will represent around 60 or 65% of total revenue, followed by zinc which would be about 30%. And then the remainder of the revenue will be derived from a small amount of lead, together with silver and gold. The total resource grade is around 2.2% copper equivalent of which the majority is in fact copper. The actual average mine grade that we will have in the projected project will be about a 3.5% copper equivalent.
Clive Tompkins: Thanks Tim. Now you recently acquired the Panorama Deposit, what does this add to your reserves?
Tim Sugden: Well we’re very happy with the acquisition of the Panorama Project from CBH Resources Limited because what it does is; it gives us control of all the largest known VMS deposits in the Pilbara. Panorama itself is quite a large single body of VMS mineralisation; the resource is around 19.2 million tonnes at 2.2% copper equivalent.
In the core of that resource there’s a high grade mining reserve which is currently about 3.9 million tonnes at 2.2% copper and 6.2% zinc, which is about a copper equivalent of about 4%. So that will constitute a quite high grade production centre for us and we are very enthusiastic about the potential for expanding that significantly. There’s plenty of additional all round those known reserves, so we certainly hope to be telling shareholders that the reserve has grown significantly over the next six months.
Clive Tompkins: And what does this do for the economics of your operations in the Pilbara?
Tim Sugden: Yeah well it has a major impact on the economics of our operations in the Pilbara. When we had Whim Creek alone, it was going to be a half a million tonnes per annum producing around 9 thousand tonnes of copper equivalent. With the addition of Panorama which supplies another half a million tonnes per annum, we’ll now look at building a million tonnes per annum at a copper equivalent grade of 3.5% copper, which gives us about 35,000 tonnes of copper equivalent as potential production annually.
The cost of constructing the mill is not significantly greater as we move up a scale and we also distribute our fixed costs over a much larger production base. So the effect of that is to have lower production cost per tonne, lower capital hence much better overall economics.
Clive Tompkins: And Tim still in the Pilbara, what is the potential for other VMS discoveries on your tenements?
Tim Sugden: The potential for new discoveries in our tenements in the Pilbara is excellent. VMS deposits nearly always occur in clusters, meaning that you’re highly likely to find additional systems quite close to where you are. In the Whim Creek area we’ve got geochemical targets, gossans and geophysical targets at depth, all of these are just crying out to be drilled and we hope to be drilling a lot of them this year.
And over at Panorama, it’s really only the deposit itself which has been drilled and along strike it’s completely open with very limited exploration work. So again, we’re really looking forward to drilling those areas and hopefully revealing some new discoveries.
Clive Tompkins: Okay thanks Tim, now to your projects in Brazil. First up, how did you become involved in Brazil and what are you targeting?
Tim Sugden: Sure well in the darkest hour of the Global Financial Crisis, we were wondering what direction the company should take and naturally our thoughts turned to gold. An opportunity came to us to acquire a small Brazilian gold company called CMG Mineracao, it already had rights to a number of prospects in the Mato Grosso Region. So we went ahead and purchased that company before shares and since then the company has continued to acquire additional projects in Brazil, with a particular focus on the emerging Tapajos Region in Central Brazil.
As it stands now, we have around six advanced gold projects in Brazil. I think the one that’s got the best potential to deliver value to shareholders is Serra Verde in the Tapajos Region. Lots of high grade gold at surface over a significant strike length and we’re looking forward to drilling that project this year. Hopefully by the middle of the year we should be able to get a rig in there and we’ll be seeing some very interesting results.
Clive Tompkins: Good Tim and what can you tell us about the history of gold discovery in Brazil?
Tim Sugden: Well there are many areas of Brazil which are very poorly explored for gold. Perhaps the best example of that is the Tapajos Region in Central Brazil. This is a region that’s only recently been subject to modern exploration and some of the bigger discoveries are projects such as the Tocantinzinho mine deposit, which is about 2 million ounces and was recently sold to Eldorado for $100 million.
We believe we’re seeing very, very similar geology in the Serra Verde Project and clearly, given that we’ve got a control of around 5 kilometres of strike and have got a lot of high grade gold at surface, the potential for multimillion ounce discoveries is excellent.
Clive Tompkins: Tim now to corporate activity. You’ve just completed a capital raising as part of your funding for the purchase of the Panorama Deposit, what’s your cash position and are you funded for the rest of the year?
Tim Sugden: Yeah the company has $13 million of cash and this is more than adequate for us to complete our bankable feasibility study, which covers both Whim Creek deposits and Panorama.
Clive Tompkins: Tim last question now. What makes Venturex Resources different from other junior exploration companies?
Tim Sugden: Well Venturex is differentiated because it has a large established resource base in the Pilbara. We have around 590,000 tonnes of metal in resources and a significant reserve position as well, and we’ve got an advanced bankable feasibility study. So our potential to be in production within two years is very good. And in addition to that we’ve got fantastic exploration potential in Brazil.
Clive Tompkins: Tim Sugden thanks for the update and good luck for the next six months.
Tim Sugden: Thanks very much Clive.