Transcription of Finance News Network Interview with YTC Resources Limited (ASX:YTC) CEO, Rimas KairaitisJames Sweeney: Hello I’m James Sweeney reporting for the Finance News Network. Joining me for an update on its gold, copper and base metals explorer and developer YTC Resources
(ASX:YTC) is CEO, Rimas Kairaitis. Rimas thank you very much for taking time out of your day and welcome to San Francisco.
Rimas Kairaitis: Thanks James.
James Sweeney: First off Rimas. Can you please start by discussing or giving a brief description of YTC Resources to our viewers’ audiences?
Rimas Kairaitis: Great I’d love to. YTC as you mentioned is a New South Wales based explorer and developer. Our primary assets are the Hera project which is a gold base metal project. And sitting in behind the Hera asset is an exploration play, called the Nymagee copper deposit. YTC is in the progress of bringing the Hera gold project online and then looking to integrate Hera with the Nymagee copper project over time. And establishing a very substantial gold/copper production base in NSW and sort of combining that, I think, with the fabulous exploration upside that the Cobar district provides.
James Sweeney: Thank you Rimas. So exactly how long has YTC Resources been going on for?
Rimas Kairaitis: OK we listed in 2007 – in May 2007. Primarily I guess, as a junior company with an acquisition kind of focus as much as an exploration focus.
James Sweeney: And what attracted you to the NSW region?
Rimas Kairaitis: NSW obviously is eastern states Australia. The Cobar district which is where our primary Hera-Nymagee assets are is sort of central NSW. Cobar is a very important metalliferous district of NSW. It’s been between sort of I guess, Cobar and Broken Hill. NSW is a very important metalliferous state – mining state. Cobar mining has been operating since the late 1880s. And I guess since about mid-1950 through to about the year 2000, Cobar – it’s a bit of a two-horse town, two major companies being CRA Rio Tinto and Pasminco, really controlled the town and the major assets. And it wasn’t until the early 2000s that junior companies, such as YTC have had access to the prospective parts of the Cobar district. And we’re applying I guess, that kind of junior aggression and that sort of junior approach to the exploration and development of the Cobar district. But Cobar’s got a history of producing very large and very long-life mining assets. Three of the existing mines in the Cobar district now, two of those have been operating for over 100 years, the other one for over 30 years. So they produce very long-life assets. They produce high-grade
assets and that’s another reason why we really like operating in Cobar.
James Sweeney: Now onto your Hera-Nymagee copper/gold project. What exactly is the size of the resource itself and of the grades?
Rimas Kairaitis: Well Hera is the near-term gold development asset. Hera has resource base of about 2.4 million tonnes, about 4.1 grams per tonne gold and about seven per cent lead plus zinc, and about 0.5 ounce silver. On a gold equivalent basis that gives you a grade of somewhere between eight and 10 grams of gold per tonne equivalent. So it’s a very high-grade resource. It’s going to be developed as a shallow underground, as what we call stage one of the development, with stage two being the Nymagee deposit. But Hera will produce gold bars, gold bullion and a lead/zinc concentrate. And in stage two, once Hera is integrated with the copper deposit at Nymagee, it will essentially produce gold, lead/zinc and then copper. So if you think of it as a gold project with lead/zinc credits in stage one, and as a gold/copper project with lead/zinc credits in stage two, is the way we see the projects developing. And Nymagee obviously we just purchased our first resource, our maiden resource for Nymagee in December 2011. And we expect Nymagee to grow quite dramatically from here. But our first resource was 8.1 million tonnes about 1.2 per cent copper, with a little bit of silver and lead/zinc credits. And Nymagee we see as a real analogue to another deposit in the Cobar district called the CSA, particularly the upper part of the CSA. And we think that if we compare those two deposits and we see the way that the CSA has evolved since its discovery in the late 1800s, into what is now the highest grade copper mine in Australia. And a very major copper resource of over 1.5 million tonnes of copper, we think that Nymagee will evolve in much the same way. So we maintain a very aggressive exploration attitude towards Nymagee. In that maiden resource we expect to be reclassified and upgraded progressively through this year.
James Sweeney: OK, with the definitive feasibility study for the Hera gold deposit officially complete. What is the priority for the company within the next six months?
Rimas Kairaitis: Well we always presented YTC as a kind of a parallel proposition for an investor. We’re both a developer and an exploration company at the same time, and 2012 doesn’t change that. We see 2012 as a year that we’ll see us develop and commence production on Hera. But at the same time, also maintain a parallel strategy of exploration on Nymagee-Hera and the broader exploration package. So I guess our milestones for this year are obviously, complete the permitting process on Hera which we expect to do within the next month or so. Complete a financing package and commence construction on Hera. And again, at the same time, maintain that exploration flavour I guess to what YTC does and continue to drill, and continue to grow our resource base.
James Sweeney: Now you have a number of other copper, gold and tin projects in the pipeline. Now what exactly is taking place and what is planned?
Rimas Kairaitis: Sure. We’ve recently actually published some results from one of those, which is a gold project called Kadungle – it’s about 100 kilometres from Hera and Nymagee. Recent results were about 150 metres at 0.4 grams per tonne gold from the surface at Kadungle. We see Kadungle as an evolving – it’s an evolving gold prospect. It’s very large gold endowment there but the grades are quite low at the moment. But we see that as the potential for either a very large low-grade gold deposit or a smaller high-grade deposit within that, very substantial.
And we really like the sort of geological setting of that area, and we’re going to maintain exploration on Kadungle during the year. And one of our other, I guess our sort of highest priority tin projects, is a project again not too far from here, about 70 kilometres south called Tallebung which is an historic tin field - important tin field in NSW’s production history. It was last mined in the 1970s and we’ve developed some very exciting large tonnage porphyry tin style targets for Tallebung. And we expect to drill those towards the end of 2012 and again, sort of maintain the company’s commitment, and sort of strive as an explorer in the district.
James Sweeney: Now onto financials and corporate strategy. YTC owns majority stakes in its projects. Now what exactly is the cash position for the company, and are you funded for 2012?
Rimas Kairaitis: OK, our current cash position is about $19 million. YTC actually owns 100 per cent of the Hera project and 95 per cent of the Nymagee copper deposit. We expect to conclude negotiations on the last five per cent for Nymagee sometime during 2012. So we consider ourselves very well-funded to maintain our current exploration approach. But we will be doing some additional fundraising during the year for the development funding for Hera, and that will be a sort of separate development package. And we’re confident of delivering a very innovative and a very favourable financing package for Hera, leveraging off our existing shareholder base.
James Sweeney: Now onto your stock. Where has it been trading over the past 12 months?
Rimas Kairaitis: OK our market cap’s about $AUD100 million at the moment with about $20 million in cash. That sort of values the end price value of the business at about $80 million. Our trading range is sort of 70/80 cents through to about high 20s over the last 12 months. Stock’s currently about 40 cents.
James Sweeney: And last question Rimas. What is the priority for YTC Resources over the next six months?
Rimas Kairaitis: Delivering Hera as a successful gold project and you know, maintaining a very good exploration approach and delivering good exploration results. And building our resource base and building the value of the company.
James Sweeney: Mr Rimas Kairaitis, thank you very much for your time and wishing you all the best.
Rimas Kairaitis: Our pleasure, thank you.
Ends
