Cardinal Resources (ASX:CDV) - West African gold explorer


by Jessica Amir

Cardinal Resources Limited (ASX:CDV) Managing Director & CEO, Archie Koimtsidis talks about the company's Namdini Gold Project and Ghanaian regional exploration program.

Jessica Amir: Thanks for your company. My name is Jessica Amir for the Finance News Network, and with us today from Cardinal Resources (ASX:CDV) is the company's CEO and managing director, Archie Koimtsidis. Archie, welcome to the network and thanks for coming by.

Archie Koimtsidis: Thanks for having us, Jessica.

Jessica Amir: So first off, for those who aren't familiar with Cardinal Resources (ASX:CDV), just tell us about the company and your story.

Archie Koimtsidis: Sure. The company was listed seven years ago. We operate in Ghana, West Africa. I personally have been in Ghana for close to 30 years and got a lot of knowledge of West Africa, but in the last five years we've managed to make a huge discovery in one of our properties.

Jessica Amir: So tell us about that discovery and why it's so significant.

Archie Koimtsidis: The discovery totals approximately 7 million ounces of gold from the surface, but just over 5 million ounces of it is in reserve category. So we put out a pre-feasibility study last year in September, and we're hopeful that very soon in this quarter we should be able to put in our final study, our feasibility study.

Jessica Amir: And for those that don't know the distinction between a reserve and resource, what you have is quite significant as well. So just tell us about that.

Archie Koimtsidis: Sure. The resource is just an early evaluation of what you have, but as you move down the study path, reserve actually is what the banks are looking forward to talking to.

Jessica Amir: And you mentioned that you've been in Ghana for some 30 years now, so what really attracted you to Ghana and why have you stayed? You've obviously got something really hot on your hands.

Archie Koimtsidis: It all began when Nelson Mandela was released. We all felt a level of comfort now that we could go over to Africa. So that's how long ago it was. And as far as the geology is concerned, we were aware of a big geological regional sitting that runs through West Africa. So we just all went over, a few Australians, a few South Africans, and here we are 30 years later.

Jessica Amir: And so let's just dive into the project itself. What's the size of the project?

Archie Koimtsidis: The size of the project, as I mentioned earlier, is it's just over 5 million ounces in a reserve category. It's an open pit, it's from surface. So it's not an underground operation, which makes it a lot easier for mining and the project economics look fantastic. We model two things. At the end of the day, it all culminates in what we call an NPV and internal rate of return, an IRR. And in our pre-feasibility study, we modeled it off $1,250 gold and as we know, gold is over $1,500 now. Our NPV at the time was around US$600 million and the IRR is a over 30 per cent, and these are both post-ta

XJessica Amir: And speaking about the business in a little more detail, on the finance side, are you fully funded at the moment? And just take us through your roadmap.

Archie Koimtsidis: We're not fully funded at the moment, but we can see ourselves being fully funded in the not too distant future. We put out a press release in April of this year, alerting everybody to the fact that we have been provided some indicative term sheets from banks and we do have financial advisors. It's just a question of finalising our final study, the feasibility study. Once that's out in the market, we're running with the bankers in parallel and it shouldn't be too far after that, that we come out with a project finance package.

Jessica Amir: And if you don't mind me asking, from my perspective and from shareholders perspective, your shares are doing quite well. So looking year to date, they're up double digits. And even longer term, you've grown to over 8000 per cent. So just take us through that.

Archie Koimtsidis: Well, share price, it's a tricky one. We believe as a company we're under valued. Other people have seen it as, wow, you've made a big move. There are many variables on share price. Ultimately, it comes down to value and where we are in the pecking order. We believe we should be in a better position than where we are at the moment, no doubt about that. But unfortunately, global and macro economics have put a lot of focus on producers, Australian producers. They've been seeing all the love and we're the next cab-off-the-ranks. The minute we get some funding sorted out and there's an expectation there that gold will be poured, I believe that the focus will shift down to our group, which is the developers.

Jessica Amir: And just going back to what you're currently working on and what's planned, take us through the exploration program, what's taking place and also what's on the horizon.

Archie Koimtsidis: The deposit itself, the 5 million ounce reserve, the Namdini Deposit, that's pretty much done and dusted as far as drilling's concern, other than some sterilization drilling on the property for infrastructure. The exploration, we've got a lot of ground around us that is prospective and if we work hard at it, which we have been for many years, we should be able to haul in some high grade shallow ounces into this production facility. They're all within trucking distance. We're taking our time with it and doing it methodically because our main focuses is to get Namdini into production, whilst we don't neglect that we still do at a moderate pace some exploration to see what's going on out there.

Jessica Amir: And just lastly, Archie, before we let you go, is there anything else that you wanted to add today?

Archie Koimtsidis: The actual train is leaving the station very soon. You either buy a ticket and get on board or you run down the tracks and you try to catch the train. It will start moving soon as far as project is concerned. Feasibility study, banking, once you've got those in place, and we expect that later this year, we're off. There's no holding back on the Namdini project. It just goes into play and off it goes.

Jessica Amir: Well, thank you so much for coming along to FNN's investor event and it was great to get your insights into the company.

Archie Koimtsidis: Thank you. Thanks for having us, Jessica, and I wish you all a great event.


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