Here are my notes from my conversation with Mr. Rohtert on Monday. It is not every day that one gets to talk to him – he is a very busy guy, and when he gets going talking it is a long time before he is done, so I’m hoping that the valuable information that he shared with me will be of assistance to others as well. I am not paid in any way by the company, nor was I invited or encouraged to write anything – I just want the company that I have invested a lot of money in and believe in to have the light of day shone on what it is doing, which I think is under-recognized and under-appreciated. I did not spare the hard questions. Things are presented in Q. and A. format, with my best recollection of what he was saying since William talks far too fast for me to write down all the details or quote him exactly. Thanks go out to William for giving me so much time and being so frank – he is truly a pleasure to talk to and I hope that I represented what he said as fairly and accurately as possible.
Q: How did the Tucson Gem Show go?
A: Attendance was excellent, and very enthusiastic. The company got to talk to some big names (whose names were not disclosed to me) with the possibility open for promising things to follow as a result. Business in coloured stones is clearly up, and coloured stone sales were up. Andy Smith was at a similar show in South Africa recently, also very crowded and enthusiastic, the most noticeable presence at that show being Tanzanite One.
Q: Anything to note regarding dubiously enhanced gems on the market such as flux healing and surface or beryllium diffusion and how True North plans to position itself against this?
A: Dubiously enhanced gems play into True North’s gems hands because True North’s gems will be certified to be completely natural or heat-treated. The industry is moving towards full disclosure of all enhancements, other enhancements are detectable, and True North is in a unique position to track and conclusively prove the origin and processing of all its gems and stand out. As for people doing monkey business to gems, there is just as much of that going on for diamonds as for coloured gems, whether people know it or not, and the diamond business is still thriving.
Q: Do you have anything to add in general about the field season in Baffin.
A: In Baffin there are 9 metasomatic sapphire occurrences, such as Beluga, and 3 hydrothermal occurrences such as Aqpik. In both sets heat treatment has been highly effective in dealing with colourless, pale, dark and zoned gems. Yellows are being worked on, but look good as they are. Quality of the gems is excellent and in the 2.5 carat range True North has sapphires that are clearly among the very best anywhere in the entire world. A three page report such as could have provided news release material was submitted by William on results of the field season but it seems that the contents were so good as to sound overly promotional, and furthermore due to the permitting conflicts that had occurred it was perhaps decided to keep a low profile on the progress of the sapphires to avoid possible retribution from the permitting bureaucrats. A 43-101 rough draft technical report was completed in December and has yet to be released.
Q: Do you have any details to add on the cobalt blue spinel?
A: The spinel was found at the end of the season, so it was too late to take a large sample or do detailed investigation. What was found was small, perhaps good enough for 1mm – 3mm rounds. The colour is excellent though. Only cobalt produces that distinctive blue hue in nature. In the next field season likely a small 1.5 tonne sample will be taken to understand more the significance of the find.
Q: Have you considered seismic surveying and have you talked to Hudson Resources at all for possible collaborative efforts given that they have plans for this in Greenland?
A: William is very familiar with the people at Hudson and has talked to them regarding collaborative transport of supplies and the like. As far as seismic surveying, this has been investigated and it appears that the granularity of results would be too large. On the other hand, high resolution micro-gravity surveying looked like it would be effective for mapping the high contrast of density between the corundum (4 g/cm3) and host rock (around 2.5 g/cm3) below the surface at Baffin. The Saskatchewan Research Council is being consulted regarding doing this. As for Greenland, no need to determine where the corundum and ruby is – you can find out just looking at the surface -- in the talus if not the rock itself.
Q: Do you have anything to add in general about the field season in Greenland.
A: In Greenland we now have three different types of deposits out of nine completely separate deposits each covering areas that can extend for many kilometers. The deposit types are: magmatic metamorphic with very large, opaque crystals, metasomatic with opaque, translucent and semi-transparent crystals, and the high quality hydrothermal deposit at Aappaluttoq (Big Red). Results of heat treatment to date have been very successful in improving colour, but have been less successful with improving clarity. On the other hand, Mr. Rohtert feels that time is on their side, there is much to try, and results can only get better. Each deposit is a different problem domain, and the intricacies of the composition of trace materials in the gems leads results of treatment under different parameters to be largely unpredictable. The enhancement and cutting of the gems is solely the domain of Nick Houghton at this point.
Q: Could you elaborate a bit more on the bulk sample taken from Big Red (Aappaluttoq). How selective were you in getting the sample and how much more of this talus is there.
A: The sample was taken at the end of the season. It was rainy and miserable as it always is when the seasonal weather is changing. People were rapidly shoveling the talus into bags and it was taken and locked up for washing this year. The 100 kg taken was likely roughly representative of the full one tonne. As for how much talus is out there – a rough guess would be 10,000 tonnes of material, although the main value is not in the talus but rather in the lode itself.
Q: Any feelings on the stones being cut, for example from Big Red?
A: William saw some of the Big Red rubies and thought they looked very good, although Nick is handling all of this processing now so he is not completely in the loop of all that is coming out. Also of interest are pink cabochons he saw, which are like delightful pink gumdrops – he showed one to his wife and she loved it. These cabochons are not going to sell for a huge amount of money on their own (he mentioned a total guess of $50 - $250) but the company has a potentially endless supply of this kind of material.
Q: Have you looked into collaboration with Crew Gold, who are also in Greenland.
A: Yes, the company is very interested in Crew Gold. They have the only Greenland gold, and we have the only Greenland rubies. At the birth of a grandson in the Danish royal family, which is very much loved and admired in Denmark, Crew and True North have looked into making a gift to commemorate the event with their gold and rubies to celebrate and gain exposure.
Q: Have you looked into the platinum potential around the ruby sites, given that there are so few places in the world it is mined – mostly in South Africa, and platinum apparently exists in Fiskenaesset?
A: The company is always on the lookout for metals and does assaying when it can, as was the case at the Corundum Dome property in the Yukon where base metals were found in 2004. For Fiskenaesset there is a lot of chromium, something that a great deal of exploration went on for by previous parties, and the company will likely assay for economic chromium and perhaps platinum as a bi-product of future ruby work.
Q: What else is going on in Greenland?
A: This very week on Thursday (February 16th) Brad Wilson, William, and a well-respected Canadian female jewelry designer and artisan are headed to Fiskenaesset to give instruction to the locals in making jewelry with Greenland gemstones. The locals have always designed their own crafts but this is a new avenue, and True North intends to help them all the way through the process to selling their pieces in Denmark. This is being done without strings and to foster good relations. It is notable that in Greenland activities like this move forward quickly. A similar program in Nunavut was being planned for two years but has not happened because of being bogged down in the usual bureaucracy there.
Q: What do you have to say about the regulatory situation in Nunavut?
A: It is an absolute disgrace. True North is merely one of the smaller of a half dozen companies who have had important programs thwarted by petty bureaucrats who seem to love to keep the Inuit people on welfare and thereby under their control. The results of the Canadian government’s stewardship are evident. In Greenland, the Inuit have university degrees, they ride around in boats with high tech sonar, they are just like the working Danes, whereas in Canada the Inuit instead have welfare, poverty, substance abuse, teenage pregnancy, etc. The Canadian government is to blame. True North had designs to put a lot of Inuit to work and inject millions of dollars into Kimmirut but they are being blocked by the bureaucracy, hurting the people there, and something has to be done. As a specific example, Inuit in Labrador who have skills with diamond wire saws in quarrying Labradorite were asked by True North to come to Nunavut to train people there in their own native language to work the same equipment, but bureaucratic red tape and foot dragging has meant that this is going nowhere, and equipment that the Canadian government bought for training is sitting idle potentially going to waste. Greg Fekete has been asked to work with other companies that have had problems in Nunavut to deliver a white paper outlining the problems with working in Nunavut and demanding change. With a new government now in Ottawa, headed by people who may be willing to change things, there is hope. Until permitting is resolved, True North will likely be less aggressive with its programs. [I got a note from Greg Fekete and although plans are not final, the 2006 season looks like it will include some mini bulk samples, and establishing a comprehensive regional geological model, with the majority of money expecting to be spent in Greenland].
Q: Could you contrast the working situation for permitting in Greenland, Nunavut, and the United States?
A: In Greenland, things could hardly be more organized and effective. For us, a plan is being made up for the year’s activities and we will sit down with all the government agencies in one room on March 31, issues will be discussed, agreements will be signed, and approval will be a 30 day process. In the United States when permitting occurs, there is something called a “lead agency” that coordinates the other agencies in working with a request. There is a public hearing, and if any agency seeks to block an application it is their responsibility to stand up and speak against you in public where you can respond. If any bureaucrats are out of line in the US government, others will not be shy in taking them to task. In Canada, instead we have multiple sets of bureaucrats in separate areas who do not cooperate with each other and make their decisions in private, seemingly with no accountability. If one official is blocking everything through incompetence or pettiness, other government people will not stand up to that person since it seems they all have their own turf and are seem shy to invade the turf of the others. This is something that needs to stop!
Q: What do you think of the effectiveness of management at True North?
A: William thinks that everyone in management are great people, he has a great deal of respect for them, and they all get along very well. They speak their minds and listen to what each other is saying. He thinks that there is a general difference however in the way they think or act that is a reflection of differing Canadian and American cultures. He as an American thinks that businesses need to be promotional if they have something to promote, and “go big or go home” – this is the way businesses fight for their stakes in the giant American market, with no one shy to toot their horns and brag about anything worth bragging about. William thinks that True North legitimately has a lot to brag about, for example to quote him – “True North’s sapphires are as good as any damn sapphires on this planet”. On the other hand, although Greg Fekete and Andy Smith seem to acknowledge that the company needs to be more promotional, there seems to be an inherent timidity to brag for fear of being seen as too ostentatious, aggressive, and promotional – perhaps reflective of the typical Canadian culture and way of doing business. It may also be a learning curve for management, William says, and it seems that the other people in management are just starting to realize what True North really has for gems after comparing to the competition at Tucson, for example. William thinks that things need to move fast, and perhaps the company could be moving faster than it is if everyone in management had freer time to commit exclusively.
Q: Do you think that Andy Smith’s dealings through Canaco on Tanzanian exploration properties might bring something of mutual interest to True North, given that Tanzania is one of the world’s most prolific gemstone regions?
A: That would be a question for Andy.
Q: Management at True North – Nick Houghton, Andy Smith, Greg Fekete, Greg Davison, have been buying stock in the company in the last year. You have not bought anything. How do you respond to someone who asks why, given that you seem so enthusiastic?
A: William already has stock options, is well paid, and feels that his live is already leveraged to the success of the company – he is putting his life on the line at times, flying helicopters through clouds, etc, and any success of the company will already pay off for him without buying stock. All his investment decisions are made with the consent of his wife, who is from a wealthy family in Columbia and who likely would not react well to losing what they have if the worst happened, so they have invested it very conservatively, and William is too old to get it all back if he lost it. At the same time, William paused and seemed to consider possibly putting money in as he quietly mused about big players (again unnamed) that the company rubbed shoulders with who have the power to advance things very quickly and effectively for True North if something develops.
Q: Do you have any concerns about the economics of mining ruby or sapphire from the lode itself as compared to the more standard alluvial mining that occurs in the world.
A: While it’s true that most of these gems are found in and mined from alluvial sources, there are locations being successfully mined from the lode, and in time mining practices may change in the source countries with alluvials. We at True North are pioneers of mining from the lode, learning how to utilize powerful and effective technologies. Iterative crush was successfully tested. For optical sorting, a human can sort one grain a second, but a machine can now sort 10,000 grains a second and it never gets tired, angry, lazy, or steals. We are going to Germany soon with another parcel for optical sorting gems from Greenland. Look at the effectiveness of dense media separation on the ruby and sapphire. Fifteen tonnes of bulk sample from Greenland was reduced to 893 kg by DMS for input to magnetic separation, and in Baffin 22.5 tonnes of bulk produced 118 kilos of concentrate – a 99.5% weight reduction. The company has looked into diamond wire cutting, and with the world quarrying business being so large and developed we have come to view it as turn-key to have people come in and set up the best equipment and train others to operate it. So, any suggestion that mining from the lode is inherently uneconomical is total nonsense. |
