Transcription of Finance News Network interview with Carrick Gold Limited ASX:CRK) CEO, John McKinstryRebecca Richardson: Hello Rebecca Richardson for the Finance News Network. Joining me for an update from junior explorer Carrick Gold is CEO, John McKinstry. John welcome to FNN. Can you start by introducing the Company?
John McKinstry: Sure, Carrick Gold is a Perth based explorer/developer. We’ve got all our operations around Kalgoorlie, all within an hour’s distance of Kalgoorlie. So our major project is what we’re calling LKK project which is a combination of three, the Lindsay’s, Kalpini and Kurnalpi. So those three all sit up to the northeast of Kalgoorlie, so we’re bringing all those in as one project so that we can get the benefit of scale and look at them as a single entity. And over the two hour west we’ve got Kalgoorlie West and then down to the south, we have an area around Spargoville where we are also exploring.
Rebecca Richardson: So how long have you been listed?
John McKinstry: The Company listed in 2004 and it’s had a little bit of a rollercoaster ride since then. In fact the founding managing director passed away last year, in the middle of the year and that left quite a void. And that gap was filled by a new Board and they brought me on at the beginning of this year. So it is very much a new company in 2011, so that’s the way we like to treat it. We’re treating it almost as a new start and a fresh face. So yeah it’s nice to get the story out.
Rebecca Richardson: And what’s your market cap?
John McKinstry: The market cap is currently around $60 million. We’ve got just short of 140 million shares out there at a share price of a little above 40 cents. What we see, like everybody else, we believe we’ve got a long way to go.
Rebecca Richardson: Now to your projects all located in the Eastern Goldfields region of Kalgoorlie. What is the size of your resource and at what stage are your projects?
John McKinstry: Well we’ve just put out our first resource essentially and I say first, because it’s dealing with the new company, where we’ve always been battling some of the issues before where some of the resource was perhaps prematurely announced. So we’ve now put out a resource there, 640,000 ounces and that’s across the projects. So we’ve got largely indicated in that, but we’ve had to do a lot of work to get there. We’ve had to essentially rebuild the database from scratch.
We’ve – the data was good but it was just un-useful as it was, we’ve built the proper three dimensional modelling that’s needed for JORC compliant resource work. So we’ve done that, we’ve got that out of the way and now we can build on that.
Rebecca Richardson: And do you own one hundred percent of your projects?
John McKinstry: We do own one hundred percent of the projects.
Rebecca Richardson: Thanks John and now to your most advanced project, Lindsay’s. What’s the size of the resource and what’s recent drilling revealed?
John McKinstry: Lindsay’s - we’ve just finished a round of drilling there, but we’ve already redone the resource based on the old information. That’s currently sitting at a bit above 200,000 ounces at the moment, we know there’s considerable depth extensions there. This first round of drilling we’ve done is more infill drilling. The next stage will actually be to produce reserve there. So we will go through to an indicated resource, put designs around it, do a pit design, get a reserve and then we’ll come back and focus on extending the resource around it.
But Lindsay’s certainly has some considerable potential there. We know it goes deep, there have been drill holes put in deep but you need to connect the dots with some real drilling. So we’ve got all that ahead of us.
Rebecca Richardson: So will Lindsay’s lend itself to open-cut mining?
John McKinstry: Oh very definitely. All our mineralisation, I mean one of the big pluses of our deposits, these are essentially greenfields, they are virgin deposits. The ore runs from surface so there’s not that cost of having to strip away a lot of material to get to the ore. So each of the deposits starts at surface, which is a big plus. We have only focused so far on open-pit material, so a lot of the deeper drilling which may eventually lead to underground mining, is yet to be done.
Rebecca Richardson: Now to your Kurnalpi project, 50 kilometres east of Lindsay’s. You’ve had some encouraging results from the Brilliant deposit. What do you know about its size and structure?
John McKinstry: Well Brilliant is the – it would be the main ore body at Kurnalpi. At Kurnalpi we’ve got in the order of seven known deposits there that will likely all become pits, but Brilliant will be the largest of them. It had the most drilling we’ve done, it’s the ore body that’s had the tightest drilling done but we’ve come back. Having done this first round of resource, we’re already doing another round of drilling and we’re already seeing some things that are going to lead us to what we believe, could be a significant upgrade on the resource.
So even though we’ve designed a pit there to start with, we know that will change with time as we find out more and more about it. But Kurnalpi is a very exciting place, it’s been one of the best known nugget fields around the goldfields for a long time and you don’t find nuggets on the surface without some basis for it. So yeah, there’s a lot to find out yet but Kurnalpi is an exciting place to be working.
Rebecca Richardson: And what about grades?
John McKinstry: Grades, well the initial pit design there gives us a head grade of 1.7. We believe that – and a lot of the higher grade there is very close to surface, so where we’re getting less and less information is lower down. That drilling I mentioned, we believe that that’s going to get a significant kick. So we’d be happy if the grade rose to closer to 2 grams per tonne but that’s the kind of order that we would probably expect from the open pit.
Rebecca Richardson: So John, what about other areas of mineralisation within Kurnalpi?
John McKinstry: Within Kurnalpi as I mentioned there’s probably seven other small pits. We are currently drilling Half Way Hill and Discovery Hill. Those two, we’ll have some news out on those within a few weeks when we’ve got the results back and we already have models for them. So it’s a case of just putting the results into those.
There’s a couple of small pits down to the south, Sparkle and Dazzle and one parallel-one at Scottish Lass. So we still have as I said, a lot of work to do there, in fact we recently took a drive over to another prospect that we knew had been a prospect, but never actually had the time to go and visit. And we were just amazed at you know, the work that had sort of gone on from the old timers down there and clearly, it’s a very good place to be digging holes.
Rebecca Richardson: And still on your projects, you have another project Kalpini located between Lindsay’s and Kurnalpi. Is this a similar style deposit to the other two?
John McKinstry: Funnily enough each of the deposits are quite different to each other. Kurnalpi is a dolarite host of very steep-dipping structure and Lindsay’s is just a flatter dipping, about 45 degrees stacked veins. Kalpini is actually like a flatter lying sheet that’s draped over a bit of a fold and has quite high grades, thinnish quartz hosted gold. So quite different of all the deposits, one we probably know least about at the moment, but we’ve done some diamond drilling there to just establish which way mineralisation actually is running. So now that we’ve got that information, we can properly design the next stage of the drill out there.
Rebecca Richardson: So how much drilling’s occurred and what are the next stages?
John McKinstry: Well of the 60,000 metres that we set out to drill this year, we’ve already completed a bit over the 30,000. We may not quite finish the full 60,000 this year but we will go close and we’ll continue obviously into January to finish that.
Rebecca Richardson: Now to corporate matters, we talked about your projects and the need for further drilling to define the resources. So are you funded for 2012?
John McKinstry: We are yes, we’ve got $17 million in the bank at the moment and that we believe is going to be adequate to see us through to that production phase. Like depending on which option we have, but we are confident that one of the mills around us, we will strike up an agreement with and use them for processing. Just given where we are in between essentially three quite big mills at Paddington, Carosue Dam and Kanowna Bell, so we’re certainly talking to two of them and we’d like to see something other than a toll-treating agreement or a simple sale agreement.
We’d like to see something bit more to almost a joint venture type arrangement, where there’s a co-operative sort of agreement to develop up the whole field. And we know then that anything that’s found has a home and equally, they can treat it as an extension of their own.
Rebecca Richardson: John is it the Company’s intention to become a producer?
John McKinstry: In a sense it might sound a little funny, but we don’t see ourselves running our own pits and mills. It pains me as an engineer to have to say that, but you stick to your strengths and our strength is that we’ve got a good exploration team, who are developing a sound understanding of the ground. That’s where our core strength lies and others around already have mining teams, engineers and plants with people who know how to run them. So it just makes sense to draw on the strengths of the respected parties.
Rebecca Richardson: Last question. Where would you like to see the Company this time next year?
John McKinstry: We’ll very quickly be building on our resource base. I would certainly before that time, be very clear on our production path and I would say we would be well and truly working towards that. And I expect first gold production from most tenements to be before the end of next year.
Rebecca Richardson: John McKinstry thanks for the update.
John McKinstry: You’re welcome Rebecca.
ENDS
