Transcription of Finance News Network Interview with Trafford Resources Limited (ASX:TRF) Managing Director, Ian Finch
Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me from base and precious metals explorer and developer Trafford Resources Limited (ASX:TRF) is Managing Director, Ian Finch. Ian welcome to FNN. First up, can you start by introducing the Company?
Ian Finch: I certainly can, I’ve been doing it for about the last six years, so it’s not that difficult. It’s a very big passion of mine, we started – it’s almost its birthday, I think the 19th of this month is its sixth year anniversary with listing. And the passion that goes with the exploration and it’s a large, and becoming larger exploration company around Australia, particularly in South Australia. It’s going into what I call, chapter two of its life, and that is where it starts to get an income from the work that it’s carried out over the last six years.
And chapter two is going to be even more exciting than the first chapter, because we’re going to be spreading our wings a little bit more and moving the Company in different directions, and hopefully getting more cash flow into the Company. But essentially Trafford is going to be an exploration company increasing in size over time.
Clive Tompkins: OK. So what’s your footprint at Wilcherry Hill in the Gawler Craton, northwest of Whyalla?
Ian Finch: Well we started with about 960 square kilometres; those were the tenements we started with when we listed on the ASX. We now, in that area alone - the Wilcherry area alone, we have somewhere in the region of 2,600 square kilometres under title. We’ve expanded that area and we’ve recently taken up ground with the opening up of the Woomera Defence Area. And we’ve taken up around 2,500 square kilometres up around the Challenger goldmine, in the northern end of the Gawler Craton. So all up, we’ve got somewhere in the region of 5,000 square kilometres now in South Australia and it’s a significant footprint.
Clive Tompkins: Good. So how many prospects have you identified?
Ian Finch: Well gosh, lots. It is and I’ve been describing it for some time, as an Aladdin’s cave. The reason is, and you’ll excuse me for giving a geology 101 here, but geology is about a source, a conduit or a plumbing system and a trap. And what we have at Wilcherry Hill is a deep-seated heat engine or source of mineralisation, very similar to the sources at Olympic Dam and Prominent Hill. And we’re simply finding all these traps all over the place where the minerals have been deposited from that source. The problem has always been to give the focus that each of those projects requires and that needs money, and this is where chapter two of Trafford comes in.
So things like Telephone Dam which is a lead/zinc/silver prospect. Every time we’ve drilled it since 2006, we have enlarged it and increased it but it needs quite a lot of money to turn it into a mine, which I’m sure it will be one day. Again that comes in at chapter two. Then we’ve got Weednanna of course, which is the gold project we started with; every time we drill there, we get increasing amounts of gold. Again the difficulty is joining all the dots together and turning that into a project itself - that requires additional funding as well.
And now of course, we’ve got the Black Hill deposit which is very exciting and that’s taking our attention away from the other areas now, because we need to fund that, because it’s very much in the news and it’s very exciting. And just down from there, we’ve got another one which is online with the Paris discovery and Black Hills, and that’s called Oxy’s Dam. So there’s no shortage of places we could spend our money and explore in the Wilcherry Hill area.
Clive Tompkins: And Ian now to your Black Hill prospect, you’ve just completed a regional soil survey. What did that reveal?
Ian Finch: Well it reveals we’ve got an exciting prospect on our hands. It gives us similar intensity silver anomalies to the Paris area to the north, and more importantly the Trojan area, which is just off the edge of our Peterlumbo tenement. It also has with it associated gold geochemistry and it’s very discreet and it’s – what I mean by that is the intensity of the geochemistry hangs together. It’s nothing to do with near-surface river runoffs or creek runoffs. This is sort of high ground and in our view and in the geochemist’s view who did the work, related to the rocks underneath. So within the next, shall we say two weeks - three weeks possibly, once the contracts are signed the Rag rigs will be out there drilling and that’s going to be an exciting phase.
Clive Tompkins: And Ian, now to WA. Trafford has entered into a joint venture agreement with Independence Group (ASX:IGO) to the iron ore rights to two projects northwest of Geraldton. What is the size of the area and grades?
Ian Finch: We have actually completed a due diligence ground process, if you like, our geologists have been on the ground there. So we do know that there are outcropping haematites of plus 60 per cent iron, over a large area at Twin Hills and similarly at Moorarie Rocks. There is, I think, somewhere in the region of 40 plus line kilometres of iron ore poking out the surface there. We’re very, very excited because we take the view that the railway line will get built in time, the port will get built in time.
There are several other players in the area and although it won’t be something that is of immediate value to Trafford, I think this is one to put in our back pockets and people to put, you know, in their heads for the future. You’ve got to also understand that we now, through our association with IronClad Mining Limited (ASX:IFE) understand a lot about iron that we didn’t understand the first time around. So there’re a few shortcuts we can take as well.
Clive Tompkins: Ian now to your financials. What’s your cash position and are you funded for the rest of the year?
Ian Finch: Yeah it’s an interesting question because there’s three component parts to that really. One is the cash at bank. We cashed in the remainder of our chips from our Robust Resources Limited (ASX:ROL) investment, which was very nice to realise there’s some $70 million in all told. We cashed in about $7 million of that some months ago, we released that information. We have about $4 million of that remaining in the bank. Interestingly, we also have liquid assets in the form of the investments that we put into IronClad as a company. So we’ve got somewhere close to 30 million shares in IronClad, which are liquid assets.
And then of course, we’ve got 20 per cent of the cash flow coming out of IronClad and IronClad will be going into production in the second half of this year. So there’s three component parts, I think we will err on the side of caution, we won’t be throwing everything into the exploration mode in the second half of this year. We’d like to see how IronClad fares in the next six months, but we’ve certainly got enough cash to be doing significant exploration over the next six months.
Clive Tompkins: Last question Ian. Where would you like to see Trafford Resources by the end of the year?
Ian Finch: Yeah well I haven’t mentioned that chapter two also takes us overseas as well. And we’ve been certainly, over the last 12 months, we’ve had some time on our hands through GFCs (global financial crises) and financial fall downs, to do research work. And the result of that research work we will see in the second half of this year as well. So you’ll see the early stages of Trafford venturing into other parts of the world, I’d like to see that well established by the end of the year.
You will see – I would like to see results from Black Hill. I’m sure we will see results from Black Hill and also from Death Adder, and I’d like to see a complete rerating of the Company as a result of that. Not to mention of course, that that’s going to coincide with cash flow coming in from IronClad. So I think all in all, what I would like to see is a complete rerating of the Company and it be given the value that it deserves.
Clive Tompkins: Ian Finch, thanks for the update.
Ian Finch: It’s a pleasure.