TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH BLACKTHORN RESOURCES LIMITED (ASX:BTR) CEO AND MANAGING DIRECTOR, SCOTT LOWEClive Tompkins: Hello, Clive Tompkins reporting for the Finance News Network. Joining me from diversified mineral explorer, Blackthorn Resources
(ASX:BTR) is CEO and Managing Director, Scott Lowe. Scott welcome to FNN. Can you start by introducing the company?
Scott Lowe: Sure, thanks very much it’s good to be here. Blackthorn Resources is a junior explorer and developer. We’re focused on base metals and we’ve got three really exciting projects. We’ve got a zinc project in West Africa in a country called Burkina Faso, it’s a mine that’s under construction and it will be in production in 2012 – around mid-2012. We’ve got 40% interest in that project; it’s a joint venture with Glencore.
And we have got a wholly owned copper exploration project in Zambia and that’s 100% owned by Blackthorn Resources. It’s formerly a joint venture with BHP Billiton and BHP Billiton has a 2% royalty, but it’s a project that belongs to Blackthorn Resources. And thirdly, we have exploration projects also in West Africa and Burkina Faso that are prospective for base metals and for gold.
Clive Tompkins: Good so when did you list and who’s on the Board?
Scott Lowe: The company’s been listed on the Australian Stock Exchange for more than ten years and we have five members on our Board, very professional and experienced people. Our non-executive Chairman is Bill Cash, Bill was formerly with Mt. Isa Mines. I am the Chief Executive Officer; I worked for BHP Billiton for most of my working life, for almost twenty-five years in a variety of senior executive roles.
Mike Oppenheimer is a non-executive member of the Board. Mike was also with BHP Billiton, he was the head of their global coal business and a direct report to the Chief Executive Officer of BHP Billiton. And when he left that Company, he floated a company called Ferrexpo, an iron ore company on the London Stock Exchange and it was a FTSE 100 company. Nicki Bowman’s the Chairman of our audit and risk committee. Nicki’s a lawyer formerly with Bluescope Steel and BHP Billiton.
And we also have a Glencore representative on our Board, Peter Kalkandis represents Glencore. Back in May of this year Glencore paid a 20% premium to buy 13% of Blackthorn Resources and as part of that deal, they got a Board seat. And so, we recently welcomed Peter as a Glencore
representative to our Board.
Clive Tompkins: And Scott what’s your share price and market cap?
Scott Lowe: The market cap at Blackthorn Resources is around $60 million. That represents an enterprise value of around $45 million, because we have approximately $15 million in cash. Our share price is around 50 cents.
Clive Tompkins: Scott turning to your projects now, starting with your Perkoa zinc mine in Burkina Faso. What is the size of the resource?
Scott Lowe: Perkoa is a really exciting project, it’s a high-grade zinc reserve just over 6.3 million tonnes of reserves, a high-grade of almost 14% run of mine. That’s an exceptionally high-grade for a zinc deposit and that project is, as I mentioned earlier, under construction and it will be in production around mid-2012.
Clive Tompkins: And Scott can you put that into perspective. Will the mine be at the small, medium or big end of the scale as far as zinc mines go?
Scott Lowe: When Perkoa is put into production in mid-2012, it will produce at the full production rate 90,000 tonnes per annum of contained zinc metal. That’s probably in the medium end of the range. But I would like to point out that Glencore’s currently investigating ways of economically increasing the capacity of the mine by 40%, and they’re also investigating the potential to add silver and lead to the product stream. So very exciting time for Perkoa, production mid-2012 but a potential increase in capacity to make it a larger operation and also potential to add silver and lead to the product stream.
Clive Tompkins: And Scott what is your stake and that of Glencore’s?
Scott Lowe: Blackthorn Resources holds a 39.9% stake in the Perkoa project and Glencore has 50.1%, and they are the manager of the project. And the Government of Burkina Faso has a 10% free carried interest.
Clive Tompkins: Now to your Mumbwa copper/gold project in Zambia. What do you have so far and what is the potential for an upgrade?
Scott Lowe: We think there’s terrific potential at Mumbwa and what we have so far is an inferred resource of 87 million tonnes at 0.94% copper. Now the most successful hole that we’ve drilled to date is a hole that intercepted 400 metres of an average 1% copper – just under 1% copper. And that included 50 metres of 4.6% copper and 4.0 metres at 19.5% copper. So that was a spectacular result and that’s one of the holes that makes up the inferred resource of 87 million tonnes at 0.94% - that’s under 1% copper.
Now we’re currently doing infill and step-out drilling and we’re optimistic that potential for a resource upgrade, early in 2012.
Clive Tompkins: Scott you’ve just renewed an exploration permit for gold and base metals in Burkina Faso. When do you plan to start drilling?
Scott Lowe: When the wet season finishes in the not too distant future in Burkina Faso, we intend to do some shallow drilling to explore for base metals on the exploration tenements that we hold around the Perkoa zinc project. Now Perkoa is a VMS style deposit and geologists will tell you that that type of deposit often has satellite deposits, and so we’ll be conducting our exploration with the aim of determining if there are other base metal deposits in the region of Perkoa.
Clive Tompkins: Now to corporate matters. Are you funded for the rest of the year?
Scott Lowe: Yeah, we have $15 million in the bank. We’re going to spend over $5 million between now and the end of the calendar year, but we are well funded for the time being.
Clive Tompkins: And is the Company strategy to become a miner with the Perkoa zinc mine being your flagship project?
Scott Lowe: It’s definitely our strategy to become an income generating company beginning with our flagship project, which is the Perkoa zinc mine in Burkina Faso. But we are also interested in accelerating the Mumbwa project with the aim of assessing its economic viability, and hopefully in the future developing and commissioning a copper mine in Zambia. And we will be looking for other assets to add to the portfolio, to grow this from a junior developer and explorer of base metals, into a mid-tier base metals operating Company.
Clive Tompkins: Last question Scott. Where would you like to see Blackthorn Resources this time next year?
Scott Lowe: This time next year, our aim is that Blackthorn has become not just a junior explorer, but a company with income stream. That is that the Perkoa mine has been commissioned and in production under the management of Glencore. We will aim to have an upgrade in our resource at Mumbwa and we’ll also be looking at a base metals discovery in Burkina Faso. Those are the three priorities for us in the coming twelve months.
Clive Tompkins: Scott Lowe thanks for introducing Blackthorn Resources.
Scott Lowe: Thanks very much.
ENDS
