Transcription of Finance News Network Interview with Tungsten Mining NL (ASX:TGN) Managing Director, Paul Berndt. Lelde Smits: Hello I’m Lelde Smits for Australia’s Finance News Network and joining me from Tungsten Mining NL
(ASX:TGN) is Managing Director, Paul Berndt. Paul welcome to FNN here in Hong Kong at Mines and Money.
Paul Berndt: Thank you Lelde.
Lelde Smits: Tungsten Mining is a mineral exploration company with a portfolio of projects around Australia. What is the Company’s development strategy?
Paul Berndt: The strategy is to rapidly determine the conditions under which a Tungsten mine at our Kilba project will be feasible and viable, and to rapidly develop that mine before the end of next year, 2014. Our broader strategy is that we will pay dividends to our shareholders from profitable mining operations. And we use part of the funds, excess funds from those operations for further project development of our other projects coming through the pipeline.
Lelde Smits: Tungsten Mining debuted on the Australian Securities Exchange at the end of last year. What have you focused on in the first few months of trade?
Paul Berndt: Well on the day of listing in December last year, we were ready to immediately start onsite with our drilling. And the first thing we did was we duplicated eight holes that were completed by the people that discovered the project, back in the 1980’s. When we got those results, we realised that there was very good correlation between what they said and what we expected. And so after Christmas, we immediately re-established onsite with two drill rigs with the objective of drilling out that deposit to a JORC compliance standard, so that we could therefore, progress the project very rapidly.
They came up with a resource of 1.4 million tonnes at around about 0.7 per cent grade. And if that’s the case, that would be an exceptionally high grade by tungsten standards for an open cut mine. Typically an open cut mine would be around about a 0.25 per cent grade. So, therefore, it led us to believe that if we have in the order of one to two million tonnes of ore, which is shallow enough for an open cut mine at a grade of around 0.5 per cent, then we would certainly have a viable mining operation.
Lelde Smits: As you mention, your priority is developing the Kilba Well deposit in Western Australia. What is the area prospective for and what are your hopes for the deposit?
Paul Berndt: Kilba is prospective only for tungsten and our hope is that there is a high grade deposit of sufficient size, of sufficiently shallow ore that can rapidly bring a mine into production, based on it. And we have very good providence of the deposit, because it was discovered by Union Carbide back in the 1970s, and they were the number one in Tungsten in the world during that era. And they came up with a resource of 1.4 million tonnes of about 0.7 per cent grade. And if that were to be the case, that would be an exceptionally good grade of Tungsten deposit.
Lelde Smits: How long do you expect the feasibility study will take to determine the viability of a mine at Kilba, and what’s the next priority?
Paul Berndt: Not very long at all. By the end of May, we will know whether the mine at Kilba is viable or not. The first priority for us is to complete the drilling that’s underway and that is slated for completion at the end of April. And then our geological consultants will deliver a JORC compliant resource based on that by the end of May. Also, we will know what the process is for the ore body and what the ultimate recovery of tungsten will be from it, because that work is underway at present and it will also be completed by May.
We also hope to achieve a memorandum of understanding with one of the major Tungsten off-takers that we’ve been talking to. And they will commit to support the project, by guaranteeing an off-take of the product and also a fairly large component of the project funding, that’s needed to develop the project.
Lelde Smits: The Kilba project is only part of your assets in the Gascoyne region and indeed you have other assets, Mosquito Creek in the Northern Territory and Koolyanobbing in Western Australia. How do they form part of your exploration strategy?
Paul Berndt: Well our strategy is to focus on developing the Kilba project into an operating mine and that’s our first priority. Once we’ve got to the stage where Kilba is well into development, that is it’s under construction, then we’ll be able to devote our time and resources and efforts into looking at some of those other projects, in our rather extensive project pipeline.
Lelde Smits: And as you work towards these goals, what is your funding model going forward?
Paul Berndt: Well currently at the end of March, we’ll have $1.8 million cash reserves and we will need to do more drilling. Because of the small pit scenario that we’re now looking at, we need to raise about $2 million presently and that’s what we’re doing. Once that raise is done, the next phase of the Company is to develop the mine and as I mentioned, the off-takers will be contributing a large share of that. And we’ll be going back to our shareholders with a placement to participate in that capital raising. And we’ve been briefing them on that and they are quite amenable to that suggestion.
Lelde Smits: Finally Paul, what would you like to have seen Tungsten Mining have achieved when you celebrate the first anniversary of trading on the ASX later this year?
Paul Berndt: Well in December of this year, we’ll be battoning down the hatches at our Kilba project, which will be well into construction phase and we’ll be going home for a well-deserved Christmas break. And in order to get to there, we will complete our preliminary engineering feasibility studies by May of this year, which will give us the mine commitment decision. We will have achieved a memorandum of understanding, leading into an off-take agreement with one of the major Tungsten consumers. And we will, therefore, have raised the cash that we need to develop the project which is in the order of about $25 million.
Lelde Smits: Paul Berndt, thank you for the introduction to Tungsten Mining.
Paul Berndt: Thank you Lelde, it was a pleasure.
Ends
