Transcription of Finance News Network Interview with UCL Resources Limited (ASX:UCL) Managing Director, Chris JordinsonLelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me from UCL Resources Limited
(ASX:UCL) is Managing Director, Chris Jordinson. Chris welcome to FNN.
Chris Jordinson: Thank you Lelde, lovely to meet you too.
Lelde Smits: UCL Resources is focused on the exploration, evaluation and development of two projects. Could you tell us where they are located and also your stake in each?
Chris Jordinson: Thank you. We have two projects; the first is the Namibian Marine phosphate project which is located in Namibia. It’s a phosphate project and we hold a 42.5 per cent interest in that project. The second project we have is Mehdiabad zinc project, which is located in Iran near the city of Yazd and we hold a 24.5 per cent interest in that project.
Lelde Smits: The Sandpiper Marine phosphate project has just welcomed a new joint venture partner. How did Mawarid Mining become involved and what stake have they taken in the joint venture?
Chris Jordinson: Mawarid Mining got involved in around February last year, so February 2012. UCL had a strategy to find a financial cornerstone investor and we were very fortunate to have met with Mawarid, who took an active interest in UCL at that point in time. And they took up both a placement and a rights issue. Subsequent to that, there was a lot of takeover activity between UCL and Minemakers Limited
(ASX:MAK). And Mawarid have stepped in and actually taken, or acquired the Minemakers interest in the Sandpiper Marine Phosphate Project.
Lelde Smits: What do you believe are Mawarid’s strengths and what do they bring to the table to facilitate the development of the Sandpiper project?
Chris Jordinson: One of the strengths they have is they have very much a petroleum background, so petroleum engineering services. They’ve also developed in various other industries, including actually engineering itself. So what they bring to the project is a knowledge of marine based projects for a start, given their oil experience. And secondly, they have the engineering arm which could assist with the development of the project moving forward. In addition to that, they also have a strong financial backing.
Lelde Smits: Mawarid acquired Minemakers’ interest in the Sandpiper project as you mentioned before, following UCL’s unsuccessful takeover bid for Minemakers. Now, how has UCL’s strategy changed since the takeover was abandoned?
Chris Jordinson: I don’t think UCL’s strategy has changed; in fact it’s probably looking more to be fast-tracked. We now have a joint venture partner, who has the same synergy as UCL and that is to develop the Sandpiper Marine phosphate project, sooner rather than later. So if anything it’s probably enhanced UCL’s position, rather than made it a step back.
Lelde Smits: Now looking at the Sandpiper project in more detail, the Maiden Ore Reserve was announced last year. What is the size of the resource and could you put that into perspective for us, with phosphate projects around the world?
Chris Jordinson: Sure. Look the Maiden Reserve that we announced last year was 103 million tonnes at in the order of 20.4 per cent P2O5. In terms of a reserve against world resources, it’s relatively small; however, what you have to look at is our resource base. Our resource base itself is just under two billion tonnes, so it world terms that will place Namibia seventh on the map in relation to phosphate resources.
Lelde Smits: And Chris, what are UCL’s plans and timeline for taking the Sandpiper project to production?
Chris Jordinson: We envisage starting development in July 2013, with our first production or first shipment effectively leaving the shores of Namibia, or going inland to possibly a Namibian end user of phosphate, in around about July 2015.
Lelde Smits: Now UCL has just announced progress report results from the International Fertilizer Development Centre. What were the objectives of the study and what did the results reveal?
Chris Jordinson: The objective of the study is obviously to look at the product we will produce, against products that are already in the marketplace and to assess where we fit, in relation to those products. What has been very good from the work that has been carried out, is that our product has been proven to be as good as those products that are already out there.
Lelde Smits: So as the Sandpiper project advances, can you talk us through how UCL Resources plans to fund development?
Chris Jordinson: Funding for the project has to happen at two levels. Effectively your shareholder level where the equity will be raised and then the debt level, which will happen at the project level. So looking at the debt side, we’ve been working with the South African banks over the last 18 months, introducing them firstly to the project and getting them comfortable with what we need to debt finance. And then from the equity perspective, we’ve been doing road shows around the world.
Lelde Smits: Finally Chris, what are the main priorities UCL Resources will be working to achieve this year?
Chris Jordinson: 2013 is very much focused on development of the Sandpiper project, getting the equity and debt financing in place and then obviously commencing the development process. Working very closely with our joint venture partners, both Mawarid and Tungeni to assist to make sure that happens. And also working with our stakeholders in Namibia to ensure we get the regulatory approvals in place, from both an environmental land and processing perspective.
Lelde Smits: Chris Jordinson, thank you for the introduction to UCL Resources.
Chris Jordinson: Thank you Lelde.
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