Just had a long talk with Kevin Flaherty at Celtic, since David won't be back at the office until August 8th or so. David is currently in Newfoundland discussing plans with Jilbey. More on that later. Here are Kevin's answers to a number of questions I posed.
1) Where are we on Voisey Bay? David was negotiating financing to enable immediate drilling there. Where does that stand?
They are currently in process of finalizing that private placement, which is about half of what they hoped for. Once completed they stand to gain approx. $250,000 into their treasury. As to Voisey Bay: if Celtic drills and does not find anything, that property is effectively over with. On the other hand, Inco and NDT are currently drilling in proximity; apparently Inco is getting good results in the Ashley area. Celtic's strategy is to wait to see results of the Inco and NDT activity. If they have good results, it will not only help Celtic in view of its property there, but will also provide valuable geological information. If results are not good, Celtic will still have valuable geological information which they can use to assess their own properties. So they have nothing to lose and much to gain by waiting. Depending on the timing of results as well as results themselves, they may still do some drilling this year.
2) David had earlier indicated to me that a major had been interested in a JV at Voisey. Where does that stand?
The major's offer, financially, was attractive. However it involved really doing no drilling until the Fall of 1998. Effectively they were going to tie up the property until then and this was unacceptable. Had they been willing to drill this Fall, Celtic would likely have accepted the JV.
3) When will the Jilbey/Celtic JV go forward?
Celtic and Jilbey are still partners. David is currently there to meet with them. They have not yet signed off on Celtic's proposals. Jilbey apparently has about $1MM in funds available for exploration activities. According to Kevin, they are somewhat "shell-shocked" by the state of the market and somewhat reluctant to commit the funds. Kevin's view is that regardless of the market, these are exploration companies and the drilling must go forward if results are to be achieved. The funds commitment to Hungry Hill may end up being scaled down, to $250,000, vs the $500,000 which was originally suggested.
4) What is the situation at Pipestone Pond?
They have received the geophysicists' interpretation. They now have that interpretation, plus geochemical and groundwork results. Twelve drill holes were proposed. All the right elements for a good drill are in place. Selection of targets from these proposed holes and a drill decision is forthcoming. According to Kevin "you can drill 12 holes at Pipestone Pond for the same cost as 2 holes at Voisey Bay."
5) Is the continuing viability of the company in question at this point?
No. There is approx. $500,000 in the till right now, plus approx. $250,000 coming from the dropping of the Indonesian properties, plus (I believe I interpreted this right) the $250,000 from the financing. Of course a lot depends on success of drilling operations. If all come out negative, it will be more difficult to secure funding. However they are quite positive about the property at Pipestone Pond, where indications are strong; and results at Voisey Bay, by Inco and NDT, if positive, will help Celtic greatly. Hopefully Jilbey will come on board.
These statements are not exact quotes, but reflect what I believe was the substance and intent of Kevin's statements.
So there you have the whole story.
Regards,
Gil |
