Transcription of Finance News Network Interview with Commissioners Gold Limited (ASX:CGU) Exploration Manager, Jason NeedhamJoel Spreadborough: Hello I’m Joel Spreadborough for the Finance News Network. Joining me from Commissioners Gold Limited
(ASX:CGU) is Exploration Manager, Jason Needham who’s just returned home from Peru. Jason welcome home.
Jason Needham: Thanks for having me Joel; it’s good to be home.
Joel Spreadborough: Jason when we last spoke your Peru operations were just getting underway. Can you recap for us the goals of your JV with Australia Gold Corporation?
Jason Needham: Sure, the main objective of the joint venture is to develop cash generating assets in Peru. In its first stage, the initial focus of the joint venture is project acquisition and we’ve got a project assessment, which is governed by three main drivers. The first of which is near-term or immediate production potential, essentially it’s important for the Company to have exposure to production assets. It minimises our exposure to market cash surges in current climates and it’s our first port of call for looking at projects.
Secondly we’re looking at projects which are scalable, so these projects need to have an internal scalability. We need to bring these projects from initially, a small start up to something considerably larger, and both on a reserve and a production capacity basis. And thirdly, we’re looking at projects which are of a modest entry cost. Mainly our investment focus is for farm-in type investment for increasing to majority equity, and that will lead us to good project development.
Joel Spreadborough: You announced your maiden investment target in Peru in October, that’s the Mollehuaca-Santa Rosa project. How are you tracking to production and cash flow?
Jason Needham: Currently at Mollehuaca, we’re retrofitting the plant to accept the reprocessing of the Santa Rosa tailings and we’ve got a workforce permanently in camp there at the moment, completing the upgrades. I expect that to be completed by end of January in 2013 and we should be back into production very soon after that.
Joel Spreadborough: OK, so what are your production targets and your operating costs per ounce?
Jason Needham: Gold production from reprocessing of the Santa Rosa tailings is forecast to produce around 870 ounces per month. Initially we’re looking at an operating cash cost of $US400 per ounce and this’ll reduce to about $US345 an ounce, once we get a more consistent power supply to the site.
Joel Spreadborough: Great, so what are the resource opportunities for Commissioners moving forward in Peru?
Jason Needham: We’re looking at under that joint venture, acquiring a number of projects and they’re under late stage negotiation and due diligence at the moment. We’re looking at a large epithermal system up in the north of the country, that’s a project in partnership with a community group up there. We’re also looking at two operating silver mines in the centre part of the country. They’re running very high grade silver deposits and we’re looking to optimise those, and get in as project partners.
We’re also looking at a large fluvio-glacial gold placer deposit in the far south of the country, which is world class by any standards, and looking to develop that with local partners. And we’re also, around our Mollehuaca plant, we’re looking at bringing on some smaller high grade gold projects for production into the Mollehuaca plant.
Joel Spreadborough: All right, so how do you plan to further fund the development of the Mollehuaca Santa-Rosa project?
Jason Needham: Commissioners Gold is just finalising its $400,000 investment in Goldsmith Resources, which is the holding company for the Santa-Rosa Mollehuaca project. That will be our full investment for the project. Any further capital upgrades or equipment purchases required at the plant, will be met by internal gold tails from the plant.
Joel Spreadborough: Jason can you tell me, what are the key milestones investors can expect from Commissioners Gold projects in 2013?
Jason Needham: Well the first milestone is why we’re all here and that is gold production, and we expect that to commence in early 2013. Shareholders can also expect the Company to be receiving cash from gold sales by the end of the year. Thirdly, we’re looking at delivering on a number of other projects in Peru and getting those into production by the end of 2013. And shareholders can expect to see at least one of those projects brought into production.
Joel Spreadborough: As a geologist yourself Jason, what sort of differences have you encountered in Peru as opposed to closer to home, in New South Wales?
Jason Needham: Well the geology of Peru is fascinating. It’s very fertile for mineral deposits which despite the rugged nature of the country, as a geologist, you can literally walk up to a deposit and kick it which is very, very interesting. Another thing that I quite like about working in Peru is that the local communities in the rural areas tend to be very supportive of mining, including large and small scale mining. And this is important for us moving forward in Peru.
One other thing that I found quite fascinating is that the mining title situation in Peru is such that they don’t really have an exploration licence, they mainly just have mining life leases. But these mining leases cover almost the entire country, so most of the ground is occupied by active mining leases, which I found quite fascinating. It makes it interesting to operate in that environment and it means there’re lots of local partners ready to develop projects with.
Joel Spreadborough: Jason Needham thanks for giving us an update on Commissioners Gold.
Jason Needham: Thanks for having me.
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