TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH BEACON MINERALS LIMITED (ASX:BCN) MANAGING DIRECTOR, DARRYL HARRISLelde Smits: Hello I’m Lelde Smits for the Finance News Network. Joining me today from junior gold explorer Beacon Minerals Limited
(ASX:BCN) is Managing Director, Darryl Harris. Darryl welcome to FNN. Could you start by introducing Beacon Minerals?
Darryl Harris: Beacon Minerals is an ASX listed company, code BCN and we’ve been listed since 2006 as a company. I’ve only taken on as MD in the last three years and basically we have a flagship project called Barlee which is 200 kilometres north of Southern Cross. We’ve been a single focused company for the last couple of years after divesting of a lot of interest during the GFC, like a lot of companies. And basically we’ve been focusing on developing a gold resource at the Barlee gold project.
Lelde Smits: Great. So what’s your market cap?
Darryl Harris: Our market cap at the moment is about $8 million, we’re a junior explorer. We’re out there trying to find things, which I think is important for the whole development of the mining industry.
Lelde Smits: Indeed and who’s on your Board?
Darryl Harris: The Board consists of myself as Managing Director, Paul Lloyd who is a chartered accountant is the Chairman and our Non-Executive Director is Matthew Egan, who is a proprietor of the company called Egan Drilling Services. So he also has a good understanding of the mining industry and exploration industry. So we actually keep a very small Board and put the money where it should go, which is into the ground.
Lelde Smits: Great, now to your Barlee project in the Murchison gold fields. Where is it located and what’s the size of the resource?
Darryl Harris: Barlee is located about 200 kilometres north of Southern Cross and it’s a 400 square kilometre licence area. We have currently an initial base resource at Halleys and Phil of 384,000 tonne grading 6 grams for about 74,000 ounces of gold. This is a base resource which we’re using to kick off potential toll treatment. And also in parallel we will do reasonable exploration looking to identify more Halleys East type deposits.
Lelde Smits: Okay so what’s your stake in the project and when was it acquired?
Darryl Harris: We own 80% of the main project area, 20% is a free-carried interest to mining with a company called Duketon which is a private company. The project was acquired at float back in 2006 and basically there’s probably 200 square kilometres, which we have an 80% interest. But we have consolidated in the region and taken another probably 200 square kilometres, that is 100% owned by Beacon.
Lelde Smits: And on what terms was the acquisition made?
Darryl Harris: We acquired the Barlee tenements from Duketon on an earn-in basis, where we earned 80% by taking it to mine feasibility.
Lelde Smits: Thanks Darryl, now your initial focus is on two areas, Halleys East and Phil at Barlee. What do they contain and what’s their potential?
Darryl Harris: Well the potential of Halleys and Phil now, as I previously stated, we’ve got about 74,000 ounces there. It is open at depth and we have had very good strikes to the south as well, so we’ve got more drilling to do there. And we believe that Halleys East and Phil have probably got about 70% of its potential found. But what we’re looking for is identical targets on the same structural geology formations in other parts of the regional area now. And as I said, basically we will be using that to establish that initial cash flow from those areas.
Lelde Smits: Okay, so what’s the next key milestone and when are you hoping to be in production?
Darryl Harris: Well the next key milestone for us is to put in our proposal to mine to the DMP in Western Australia. That will be done in mid-October and basically that covers all the ethnographic and environmental survey work which has been completed, plus pit optimisation and mine planning for an operation. So once we’ve had that reviewed and basically our terms of reference for our mining are handed to us by the Government, we can start mining. In conjunction - in parallel with that, we have to finalise our contract mining with a contract mining negotiation – sorry. And we have to finalise our negotiations with the toll treatment company, whoever we decide to go with. So we hope to be able to mine by, I would say in the second quarter of 2012. Towards the end of the second quarter we hope to be in production.
Lelde Smits: Thanks Darryl, so your plans for next year include a regional exploration drilling programme with plans to increase your exploration target to 500,000 ounces, as well as further acquisitions with the gold field. Are you funded to undertake drilling on your own or are you looking for JV partners?
Darryl Harris: We’re not looking for anybody at the moment. One of the main reasons that we’re looking at a toll treatment plant or doing toll treatment on Halleys East is because that will give us funding. There is a very good cash flow in terms of our operating costs; it’s very high-grade in the order of 6 grams. So we will fund the Company through the toll treatment. And over the next twelve months, we will go out there in terms of regional exploration and look at these targets, these anomalies we’ve developed we’ve identified from the aeromagnetic work and the soil sampling. And we will drill those out in the hope of finding another four or five Halleys East with maybe 100,000 ounces in them. And you know, if you can get four or five of these small deposits that are high-grade at surface, they’re very cheap to develop. They’re very cheap to process; I mean our cash costs are probably in the order of $400 an ounce in situ Australian which is very cheap. So you can do some mental arithmetic and work out that even with transportation to a mill, there’s certainly a reasonable net profit in there.
Lelde Smits: Finally Darryl, where would you like to see Beacon Minerals this time next year?
Darryl Harris: This time next year, I would hope the Company is in production. We’re doing a small amount of toll treatment, we’re doing our regional exploration and we have been looking at acquisitions in larger scale type projects, mainly overseas and in places like Africa and South America. And I think it’s important for the Company to have a pipeline to grow on and so we hope that the funding that’ll come out of the toll treatment, we can continue that regional acquisition and look wider to larger scale type acquisitions. Mainly in the gold area because we think gold still is a very strong commodity and will remain so for several years.
Lelde Smits: Darryl Harris thanks for the introduction to Beacon Minerals and all the best for the year ahead.
Darryl Harris: Pleasure.
ENDS
