Transcription of Finance News Network Interview with Minotaur Exploration Limited (ASX:MEP) Managing Director, Andrew WoskettLelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me today at the Resources and Energy Symposium in Broken Hill is Andrew Woskett, Managing Director of Minotaur Exploration Limited
(ASX:MEP). Andrew, welcome.
Andrew Woskett: Thank you.
Lelde Smits: Could you start by introducing Minotaur Exploration?
Andrew Woskett: Certainly. Well Minotaur Exploration is an Adelaide based company; it has been around in various forms. The current form was a company listed in about 2004/2005 after the sale of the Prominent Hill discovery to, at the time, Oxiana. So Minotaur, the crew at Minotaur having made that discovery, sold the project and moved on to try and replicate that success by applying the same technology, the same methodologies to other prospects around Australia.
Lelde Smits: And what is the Company’s focus?
Andrew Woskett: We’ve got a fairly diverse range of assets throughout Continental Australia. I guess that our main focus though, would have to be said to be copper/gold exploration. That is, in fact, our core strength; the team is intact, the people that discovered that Prominent Hill deposit, they’re still there, they’re still doing the same sort of work. But now we’re looking in different geological locations to that original discovery.
Lelde Smits: To your Poochera Kaolin project in South Australia. How many deposits do you have and where exactly are they located?
Andrew Woskett: Well Poochera is a wheat siding, wheat town/village about 150 kilometres east of Ceduna, so it’s in the western part of South Australia. And in that region, there are five different kaolin deposits and collectively there’s an exploration target of, I think, 500 million to 800 million tonnes of kaolin throughout the various deposits. Only one of those so far has been converted into a JORC resource, that’s the Carey’s Well deposit. That’s the one that we’ve been working on now quite aggressively for the last three or four years. And we’re running a pilot plant at, near Poochera to produce samples of product that customers should be attracted to.
Lelde Smits: Now Minotaur has an active exploration portfolio across Australia. Could you give us an idea of your footprint?
Andrew Woskett: Absolutely. So from an exploration point of view, we’re active in South Australia, Victoria, New South Wales, Queensland and the Northern Territory. They’re either copper/gold assets or they’re base metals targets. The primary focus of course, is the copper/gold prospects which are nowadays mostly up in Queensland in the Cloncurry region. And around Cloncurry, we’ve got a tenement position that exceeds 3,500 square kilometres. Of that, 500 square kilometres is joint ventured with JOGMEC, the Japanese Metals Oil Gas Corporation, they’ve come in to spend $4 million on our property and they’re earning 51 per cent. The other 3,000 square kilometres we have in our own right, and that ground is primarily around the Eloise mine and the Osborne mine, or just north of Ernest Henry.
Lelde Smits: And where is exploration the most advanced?
Andrew Woskett: Well in our set of projects I’d have to say Cloncurry, because we’ve generated a very large number of high quality geophysical targets. So we’ve identified anomalies in the bedrock which are ready to drill. We have a crew up there doing ground based geophysics to refine some of those anomalies in terms of definition of the target. And we are just about to mobilise a drill rig and start drilling those various anomalies. So during the course of this year, we should get several of them drilled and our hope is that, you know, one or more might become deposits in the future.
Lelde Smits: Minotaur has sold a few tenements this year: Where do you plan to put the funds?
Andrew Woskett: Well recently we completed a transaction with BHP Billiton Limited
(ASX:BHP) to sell a number of tenements near Olympic Dam. And we took that step because the depth of the overburden or the cover to the basement rocks, is anywhere from 800 metres to 1,200 metres. So it’s very expensive, very problematic exploration; we took a view that we couldn’t afford to continue to do that sort of thing. So we were able to sell them for a reasonable amount of money, and we’re going to take that money and redeploy that back into Minotaur.
The important thing about that sale though is that it does insulate us from the need to go back to the equity market, any time this year. Therefore, we think that with the cash in the bank, the need not to go back to shareholders and dilute them by raising money, we are going to be in a good position to take advantage of opportunities to acquire or invest or farm-in to other projects, as and when they arise.
Lelde Smits: So are you funded for the remainder of this year?
Andrew Woskett: Absolutely. By the end of June, we should have around $13 million cash in the bank. We have a number of investments in listed ASX companies which are currently undervalued of course, just like everything else, but they’re worth about $5 million, mark-to-market. And so with the cash in the bank primarily, we are in a fairly sound position and we will be cautious because in times like this, cash is king, as they say. So we will be husbanding our money quite carefully, but we will also be taking advantage of opportunities as they present, where we think they can add value.
Lelde Smits: So is Minotaur considering anymore divestments?
Andrew Woskett: Yes we are. And in fact, we talked about the kaolin project, that’s an industrial minerals asset or set of assets which require quite an amount of specialisation to take to market. We can do all the early stage work, we can define the resources. We have proved that, say the Carey’s Well deposit, is as good as any other kaolin deposit in the world, it’s right up there with the best of them. And that in itself should be a very attractive asset for kaolin producers and consumers to buy into.
So the important thing about industrial minerals is you have to understand the supply chain, you have to understand your customers, you have to understand your customer’s requirements. That’s not really our bag, so we think we are better off to let someone else do that who understands that space much better. We’re happy to sell that project and get a satisfactory return on the investment that we have made.
Lelde Smits: Finally Andrew, what is the Company’s corporate game plan in 2012?
Andrew Woskett: The corporate game plan is to improve the balance sheet through more asset sales. It’s to focus back more and more on our copper/gold exploration opportunities and our base metals prospects as well. But it is to remove the need to alleviate the need to go back to the capital markets to raise money, because that’s just not going to happen this year.
Lelde Smits: Andrew Woskett, thanks for introducing us to Minotaur Exploration.
Andrew Woskett: My pleasure, thank you.
Ends
