AuStar Gold Limited (ASX:AUL) CEO Tom de Vries discusses exploration projects and outlook going forward.
Jessica Amir: Thanks for tuning into the Finance News Network, I’m Jessica Amir. Joining us now over the phone from AuStar Gold Limited (ASX:AUL) is CEO Tom de Vries. Hi Tom and welcome back.
Tom de Vries: Thank you Jessica, it’s good to come back.
Jessica Amir: First up, you’ve recently completed a $5.5 million capital raise. Tell us who really got behind the raise and what financial position that’s really put the company in?
Tom de Vries: The capital raise as you’ve said, has been very successful and continues to generate ongoing interest and enquiries. This capital raise has put AuStar Gold in our most strongest position ever. And now being debt free, we’re not reliant upon convertible notes. And we’re now able to chart the best and most cost effective course forward, without financial restriction.
Jessica Amir: Now let’s talk about your exploration programs. Just tell us what’s taking place across the company?
Tom de Vries: We have three exciting high-grade additions to our existing inventory that we’re actively drilling. So we’re currently drilling at the moment Stacpoole North, which is very positive and had a recent announcement on that drilling. Following up a high-grade drill hole drilled in 2007 and that structure sits between two and three Level in the Morning Star mine. Quite high up in the mine and which is somewhat advantageous.
Next is McNally’s Reef, which is a brand new unmined structure on seven Level, which we announced earlier this month with super high-grades. We’ll be returning to diamond drill McNally’s Reef further after Stacpoole North drilling, probably in two or three weeks time. However, we will drill this in six Level, so it’s whichever more favourable position for geological interpretation. And at the conclusion, being in a position to fully understand the value of this structure.
Stones Reef was drilled from seven Level and we announced those results in September. We feel that we now have a reasonable minimum mining block identified, but the grade bearing structure is still open to the south. So we want to expand the block, as it would be important for mine planning and also further improve the economics, most favourably. In addition to these finds, we still have a number of other targets within the Morning Star mine. The last exciting item on the list is the Rose of Denmark mine, where we’ve extended the mining lease for another three years. Which allows us to move forward from bulk sampling to unlimited mining. To that end, we’ve brought in a longhole rig to allow us to sludge drill the most economical areas. As well as we’ve mobilised a modern electrical hydraulic drill rig, to drill below the adit Level. So as we can assess the potential areas below the adit for mine planning, to design the mine in the most economical method.
Jessica Amir: Can you remind us about the long-term strategy?
Tom de Vries: The strategy to date, we’ve been scrambling to extract what might be called just in time to identify gold anomalies. And testing the geology around the visible gold intersection. Now that we have the financial means, the strategy is now to be in a position to confidently mine and process continuously. However, to achieve that in a cost effective manner, we need three to six months of material identified, designed and available to be mined and then processed. This allows time and cash flow to find the next mining blocks. And as you’ve heard Jessica, we’re well on the way to achieving that objective within our in-mine exploration efforts.
We’ll also look closely at recent processing performance. Once all the reconciled assays are completed and looks for cost effective improvements in the plant, especially in the gold in sulphide concentrate issue. And lastly, we’ll start reviewing our exploration leases and start looking for that one elephant, hiding in the bush.
Jessica Amir: Just lastly before we let you go Tom, talking about the nearer term. What’s planned for the next six months?
Tom de Vries: So the next six months will be focused predominantly on in-mine exploration at Morning Star. The Rose of Denmark will be densely drilled to determine economic blocks and the depths mining method. And concurrently we will apply to the government authorities for water discharge licences and a mining work plant. So as to position the operation away from bulk sampling, to unlimited mining and we’ve already started that process. We’ve already reduced the workforce to conserve funds, but that will be reviewed once we’re in a position to restart mining and processing. I have to say given recent successes, we’re feeling really confident.
Jessica Amir: Tom de Vries, thanks so much for the update.
Tom de Vries: Thank you for your time Jessica, much appreciated.