Transcription of Finance News Network Interview with Indochine Mining Limited (ASX:IDC) CEO, Stephen PromnitzLelde Smits: Hello I’m Lelde Smits for Australia’s Finance News Network and joining me from gold development company, Indochine Mining Limited
(ASX:IDC) is CEO, Stephen Promnitz. Stephen welcome to FNN here in Hong Kong at Mines and Money.
Stephen Promnitz: Thank you.
Lelde Smits: Indochine Mining has recently delivered results from your flagship Mt Kare project in Papua New Guinea. What has been defined?
Stephen Promnitz: Well our recent results have been quite exciting, high grade numbers that have confirmed the presence of bonanza zones. And these bonanza gold zones, they’re thick, they’re high grades 20/30/100 grams and best of all, because we’ve proven this concept, there’s a good chance we’ll find more. So it adds ounces to the project, it improves the economics of the project and it shows it can be a whole lot bigger.
Lelde Smits: How do the results compare with what you’ve uncovered previously and what do the results show you about Mt Kare’s potential?
Stephen Promnitz: Well recently we got all our results from our 2012 drilling program. And the great part about it is that it not only confirmed past results, they confirmed the widths; but we’ve actually got on the whole, better results. And so that should bring on an improved resource in the future and again, proved economics for the project. We completed a prefeasibility study which was solid, but that was on a past resource, so these results indicate that things are looking better for the future.
Lelde Smits: Indochine Mining plans to conduct a full feasibility study this year. What will the study focus on and what outcomes will you be hoping for?
Stephen Promnitz: Well it’s going to be a fairly standard bankable feasibility study; we hope to get the first draft out perhaps by towards the year end and the full bankable feasibility study, by the end of the first half of next year, or thereabouts. It’s going to be fairly standard, we’ll focus on all the key things, but the idea of getting a bankable feasibility study is really for two things. One, we can trigger the application for mining leases. Two, we can lock in an agreement with the government, with local people. And three, we can also then look at how we could finance the project as well.
Lelde Smits: In the meantime, what’s next on the agenda for your drill program and what timelines are you working from?
Stephen Promnitz: Well our current drill program is focused on identifying more of these bonanza zones. Identifying where they are, how they look, how they dip, where the extensions are - that’s the key focus of our drill program at the moment. What’s exciting about them is that we have a geologist called Tony Burgess and he had worked on the neighbouring world class goldmine. And he spent all of his time actually identifying very similar high grade bonanza zones. And so we’re hoping with his help, his guidance, we’ll actually find where they go down dip or at depth, they bell out and that’s where we find our jewellery boxes. So it’s pretty exciting times.
Lelde Smits: Now Indochine Mining has forecast production in the first half of 2015, what are the priorities which need to occur before then?
Stephen Promnitz: Well the key plan that we have to deliver is this bankable feasibility study in the first half of 2014. That’s so that we can get mining leases approved, we get our environmental permits as well because we’re putting through an environmental impact study. That’s a key thing; you can’t do any mining until you have a mining lease approved. As soon as that occurs, presumably at the same time, we will be discussing financing issues and how to put that together; actually construct the mine and then, you know somewhere in 2015. We’re not absolutely certain when that timing would be; perhaps it’s going to be mid-2015, perhaps a little bit later. But that’ll depend a little bit on some of the outcomes of the feasibility study.
Lelde Smits: And Stephen, what production rate are you targeting at this stage?
Stephen Promnitz: Look we’d like to kick off at about 150,000 ounces. Our pre-feasibility studies show that we could produce anywhere between 100,000 and 160,000 ounces, depending on the year and the head grade. We’re expecting our head grades to improve, so indicatively that’s what we’re looking at. That may change through a bankable feasibility study, but that’s basically our target at the moment.
Lelde Smits: So Stephen as you move into production, could you talk us through your funding model?
Stephen Promnitz: We’ve actually had a fairly long list of investment banks and major financiers come and talk to us about it. And we’re quite happy to enter into preliminary discussions, make sure that they’re comfortable with lending in Papua New Guinea and make sure that they’re looking at this style of project. But the flip side is its early days and we won’t really be able to crystalize any of those discussions, until we complete a bankable feasibility study.
But reasonably, we would expect that we’re going to see a balance of equity debt, perhaps something in between. Our prefeasibility study indicated about $200 million to construct this mine, maybe a little bit more. And I think given our market cap and the interest we’ve had to date, that’s probably entirely reasonable, even in this current market.
Lelde Smits: Finally Stephen, what are the major milestones Indochine Mining will be aiming to reach this year, and what should investors be keeping an eye on?
Stephen Promnitz: Well in the short term, we expect to be putting out more results about bonanza zone drilling. Then we’ll incorporate that into a new resource model, hopefully that new resource model will be out somewhere around June this year. We’ll be kicking off our bankable feasibility study as well, so there should continue to be more drill results, some of the outcomes there. We’ll complete final study with our land owners, probably around midyear and then perhaps, the first draft of our feasibility study internally come year-end.
Lelde Smits: Stephen Promnitz, thank you for joining us in Hong Kong and for the update to Indochine Mining.
Stephen Promnitz: Thank you very much for the opportunity.
Ends
