Transcription of Finance News Network Interview with Black Range Minerals Limited (ASX:BLR) Managing Director, Tony Simpson
Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me at the Australian Uranium and Rare Earths Conference in Fremantle, Western Australia is Black Range Minerals Limited (ASX:BLR) Managing Director, Tony Simpson. Tony welcome back. For investors not familiar with Black Range Minerals, when did you list and where are your projects located?
Tony Simpson: Thanks Clive thanks for having me back. Black Range has been round for the last 25 years, but more importantly the last five years has focused on energy. Our main project is the Hansen/Taylor project which is in Colorado the US.
Clive Tompkins: Thanks Tony, now to your Hansen/Taylor project. What is the size of the resource and grades?
Tony Simpson: The Hansen/Taylor deposit is probably the third biggest deposit in the USA. It’s 91 million pounds of – at a cut off of 250 ppm with an average grade of 600 ppm. But more importantly, it goes down to about 44 million pounds at a cut off of 750 ppm, with a fantastic grade of 1,200 ppm.
Clive Tompkins: When we spoke at the start of the year, you were embarking on the permitting and approvals process. What progress have you made and what is the time frame involved?
Tony Simpson: Well what we’re establishing at the moment is the baseline monitoring program. We have to put five quarters of baseline monitoring data together to submit to the authorities. And prior to doing the baseline monitoring, we’re actually putting a plan in of operation to the relevant authorities within Colorado. We’re basically almost complete with that. We’ve started to collect the baseline data and we hope to submit that document for review by mid next year.
Clive Tompkins: Good Tony. So after your submission is received, how long does it then typically take to get approval?
Tony Simpson: We’re very lucky being in the State of Colorado because the State of Colorado is an Agreement State, which means that the State of Colorado can follow the NRC (Nuclear Regulatory Commission) guidelines, but have a regulated time frame to do that. The regulated time frame is 18 months. So 18 months from the time of submission should get us to our permit stage which is, the way we are scheduled at the moment, the end of 2015.
Clive Tompkins: Tony your scoping study recommended underground borehole mining. What are the advantages of this method?
Tony Simpson: OK I just want to make it clear that the project was amenable both economically and technically to open pit mining, underground mining and borehole mining. Underground mining – sorry, open pit mining as you can understand, leaves a pretty big scar on the surface. Underground mining less a scar, but borehole mining leaves almost a zero scar. If you can get an exploration drill rig to a point, then you can get the underground borehole mining rig there and you can mine. And as with an exploration rig, once you’ve moved offsite, you rehabilitate the drill hole and you rehabilitate the underground borehole mining hole, and you leave almost a zero scar on surface.
So it also is almost zero capital compared to the cutback etc. that you would require for open pit, the development of shafts and access routes that you would require for underground mining. This is almost a zero capital option for us. But more importantly, for permitting perspectives and we all know that there is opposition to mining today, not just uranium mining, but mining in itself. So choosing underground borehole mining where we don’t have waste dumps, we don’t have the usual scars; we believe is the right route for the area that we’re in at the moment.
Clive Tompkins: Very good. So when do you hope to be in production?
Tony Simpson: We’re allowing the permitting process to get us through to the end of 2015 and once again we’re allowing opposition to the project, which is another year. So we want to be in production by 2016. And that’s pretty easy for us because as I explained earlier on, we just drive the underground bore holing rig. So there’s no lead time to get into production, another advantage of the underground borehole mining method. And because we’ve chosen the use of ablation which is the new technology that we’ve achieved and fought for the Hansen deposit, which basically means we high grade the ore as it comes out from underground. We separate the uranium from waste; we get 95 per cent of our uranium into 10 per cent of the mass. We intend not to build a mill and therefore, there’s no lead item or lead time to actually build in a mill.
We will only concentrate, the ablation units are skid mounted, a 40 tonne container comes in behind the underground borehole mining rig, we basically separate ore from waste. We put the waste back down underground and we transport offsite, 10 per cent of the mass containing up to 1.2 per cent uranium, which is a very high grade high value product which can be shipped either to another mill. It can be sold to people like Cameco who have shown an interest, but we haven’t developed the project that far down the line yet. So production is pretty quick after permitting with very, very minimal capital.
Clive Tompkins: And Tony, I see Black Range Minerals has announced a joint venture agreement with Ablation Technologies. What does this
joint venture involve and why is it of interest to Black Range Minerals?
Tony Simpson: The Hansen/Taylor Ranch project area is amenable to this process. The deposit is a sandstone hosted deposit and that means that the uranium is basically coated on the outside of the sandstone grains. In this particular case, if the uranium is deposited in that way, the ablation process can actually remove the uranium from the outside of the sandstone granules without any grinding, crushing that needs to take place. So we bring with our underground borehole mining method, we bring the slurry out – sorry we bring the ore out as a slurry. We put it through the ablation process which is just very, very high energy applied to the granules themselves, which causes the uranium to pop off - the patina to actually pop off the outside of the granule. That forms the finer grain sizes, we then screen it and by doing that we’re collecting 95 per cent of our uranium into 10 per cent of the mass.
This is a huge benefit for us from a permitting process; we are no longer looking to have a milling facility erected at our site, which makes permitting process a lot simpler for us and a lot more streamlined. We can then take that concentrate offsite and get third parties to mill it or sell it to third parties, so we’re really excited about this. So by doing the joint venture we’ve secured that process for Hansen, which is another milestone ticked. We’ve done the underground borehole mining with a strategic alliance with Kinley (Exploration LLC). We’ve now ticked the box to be able to use the ablation process by entering into this joint venture with Ablation Technologies. And more importantly or as importantly, we have the worldwide rights to license this process.
There are a number of projects out there/deposits out there that are so economic because a) their size, or b) even their grade. The application of underground borehole mining which you can just drive up and high grade a deposit, then use ablation on it to get a high grade concentrate and ship that off to a third party, opens up I believe - and this is why we’ve pursued it so aggressively, a new world for Black Range. We’ve basically de-risked Black Range from the single project Hansen/Taylor, to now opening up to a new dimension in terms of what we could do in projects. We can license which gives cash flows - early cash flows; we can actually joint venture – again gives us cash flows, or we can acquire deposits because of people unable to do anything without the ablation technology. So we’re very, very excited about signing this joint venture and having the worldwide rights to the use of ablation.
Clive Tompkins: Now to your share price Tony. Where has it traded over the last 12 months and what’s your market cap?
Tony Simpson: The share price has been up to four cents, down to as low to 1.7 cents. At the moment we’re trading at about two cents, giving a market cap of about $17 million at the moment. In terms of the enterprise value which I’d like to express, I mean the enterprise value of our project is around about 15 cents a pound of uranium in the ground, which is by far the cheapest of any of our peers in the State of where we are at the moment. So there’s a lot of upside in terms of our share price and that’s – my job is to demonstrate that a) the joint venture with Ablation Technologies can produce the results that I anticipate. And b) that we can get the permit and we can get the mine ability of the Hansen/Taylor project, then I think we will see outside of the uranium price increase, we will see the build-up in our share price.
Clive Tompkins: Tony Simpson thanks for the update.
Tony Simpson: Thanks very much Clive.