TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH AUZEX RESOURCES LIMITED (ASX:AZX) MANAGING DIRECTOR, JOHN LAWTONRebecca Richardson: Hello Rebecca Richardson reporting for the Finance News Network. Joining me today for an update from gold explorer Auzex Resources is MD, John Lawton.
John thank you for joining us today, can you start by explaining Auzex Resources?
John Lawton: By all means. Auzex is an Australian listed, ASX listed, mineral explorer, we were listed in 2005. Brisbane is our base but our major project today and which I hope you will be asking me questions about, is Bullabulling in Western Australia. It’s a major gold project just out of Coolgardie in the gold fields.
Rebecca Richardson: And what’re your share price and market cap and the moment?
John Lawton: Our share price is somewhere around about 70 cents Aussie, which means our market cap is somewhere between $65 and 70 million.
Rebecca Richardson: Looking at your projects now and the Bullabulling gold project, can you explain the project to me?
John Lawton: By all means. It’s a project that we acquired as a brown fields exploration project. We acquired it quite cheaply at the start of 2010. We announced a major resource upgrade in August of last year, 450 per cent upgrade in the resource from 430,000 ounces to just under 2 million ounces. We’re currently in feasibility with that project. We’re doing a lot of engineering design metallurgical test work, drilling and all the sort of aspects that are required to complete feasibility from ground, about the end of this year.
Once we’ve completed feasibility, we go out to banks and financial people and they’re already wanting to talk to us, so that’s of interest to us. And we’re probably looking at 12, 18 months construction period, so we’ve always said production somewhere in 2011.
Rebecca Richardson: Now you also have projects in Queensland, New South Wales and New Zealand. Is the focus gold there as well?
John Lawton: It’s always been gold. Auzex was set up as a gold explorer, a green fields explorer and obviously the GFC put an end to that. So we’ve been spending a lot of money in the ground using advanced exploration processes, spatial modelling. There are quite sophisticated new exploration tools within the Company which we used in our initial exploration assessment of eastern Australia and New Zealand.
The plan that we intend for Bullabulling is to take that project through to operations and would actually split the Company as we’ve announced in our Announcement, ASX Announcement, last Friday – is to demerge our exploration projects which are our eastern Australian and New Zealand properties away from Bullabulling. And so we can develop Bullabulling as a stand-alone mining operation obviously with a different set of skills and management group to the exploration vehicle.
Rebecca Richardson: On to corporate matters, your joint venture partner in the Bullabulling gold project GGG Resources launched a hostile takeover offer for Auzex, which you rejected. What value do you place on the Company now?
John Lawton: Well that’s for others to say. What I can intimate is that we do see ourselves undervalued as I’ve made in my presentation today, is that we’re below our peer group and that’s probably one way you can assess it. Part of the reason for that is that the project is 50/50 with a joint venture partner who has made this opportunistic hostile takeover offer of the Company. And obviously that puts uncertainty into the marketplace, so that there is that aspect.
Once the project is put into one vehicle which has always been the intention of both Companies, I guess the argument is which vehicle that should be and our view is that it should be Auzex obviously. Then we can get on and we would expect to see milestones being realised where the share price would be appreciating significantly.
Rebecca Richardson: What’s your current cash position and are you funded for 2011?
John Lawton: Oh reasonably well we’ve got a very high cash burn; it’s currently around $1 million a month. Our cash position at the moment is about 6.5 but as we announced on Friday, we are looking at a significant capital raising of 25 million in the next few months.
Rebecca Richardson: And the last question. Where would you like to see Auzex Resources 12 months from now?
John Lawton: 12 months, completed feasibility and in construction of what will be a significant gold producer in the Australian scene.
Rebecca Richardson: John Lawton thanks for the update and introduction.
ENDS
