₪ David Pescod's Late Edition April 24, 2007
Q & A with Bill Fisher
(From April 13, 2007)
He’s a busy guy these days between being one of top guys at Aurelian Resources with it’s major discovery in Ecuador while also piloting Globestar Mining. But, we finally catch up with the experienced mining man for an interview just a few days ago…
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We are here with Bill Fisher (William), who has a very interesting job these days – not one but two of his companies are attracting a lot of attention - Aurelian Resources (ARU) (Chairman) which may well be one of the biggest discoveries in the last decade (if not decades) and he is also with Globestar Mining (GMI) (CEO) developing a copper project and hopefully a nickel project as well in the Dominican Republic.
Bill, a little bit of the history of your years in the mining business, much of which was spent in Africa.
Bill: That’s right, I lived eight years in Africa in Angola and the Congo (and all those nice places) as a diamond miner and explorer. I moved to Canada after being in Australia and the U.K. in the early 1990’s for the NWT diamond rush. I was VP Exploration with the leading Swedish base metal major Boliden, and since 2001 have run Globestar as we develop the copper mine in the Dominican Republic.
David: As far as Aurelian at this point, there’s on-going debates about takeovers as well as the size of the project, anywhere between seven and 12 million ounces seems to be mentioned, and the interest with the politics in Ecuador. A comment or two.
Bill: I think the political concern in Ecuador made the stock drop quite a lot down to the $24.00 to $25.00 level, but it has bounced back - very strongly on some of the drilling – in fact some commentators have said that the hole reported in latest press release is the “best” drill hole that has ever been drilled in a gold project. So it’s obvious the deposit is getting very, very strong.
The politics seems to be sorting themselves out. A new left leaning government is in power, but they don’t seem to be unreasonable.
David: At Globestar, you’re currently developing a modestly sized copper projects, I can never pronounce the name, and the idea is that it might have a five year mine life, but you hope to expand it?
Bill: Well our copper/gold project, Cerro de Maimon, in the Dominican Republic has currently Proven and Probable Reserves for a 7.8 year mine life, in the current open pit plan. There is still underground potential afterwards.
We hold almost the complete belt surrounding Cerro de Maimon, and these massive sulfide deposits, which in our case is very high in copper, tend to come in clusters. Having much of the whole belt in our company may prove to be very beneficial to us.
The mine is under construction, we are on time to get the mill built by next summer and we should be producing copper concentrates in the summer of 2008.
With the current prices, our annual revenues, based on our early production rate of around 32 million pounds of copper per year, would, at today’s copper prices, yield revenues in excess of $100 million.
David: Now the excitement or the upside to the stock is on the exploration for nickel in a very interesting place in the world.
Bill: Yes. Our nickel ground is also in the Dominican Republic. Geologically its very different from our copper mine but is only 3 kilometers away, but more importantly it is only 8 kilometers from the Falcondo smelter which was recently acquired by Xstrata.
Falcondo are currently trucking ore up to 42 kilometers to their smelter and the grades we are finding – very close 8 kilometers from the smelter, may turn out to be up to 50% higher than what they are currently mining.
Very interestingly today, there was an action by Xstrata - they are expanding their oil refinery (which is part of their operation over there), so obviously they are very keen to invest and hopefully expand their operation.Therefore, they would need high grade nickel right next door to the smelter, which is what we could supply.
David: Don’t they already have a big inventory?
Bill: They do, but their reserves are approximately 10 year reserves at 1.2% nickel – our exploration grade seems to be about 1.6% . Currently we are drilling off the area to try and get to a formal NI 43-101 resource ( this program to be completed in July). The difference in value today, because nickel prices are obviously extremely high, may turn out to be up to $200.00 per ton so that means there may be plenty of opportunity for both Globestar and Xstrata to make a lot of money from our discoveries.
David: Any estimates or are there any numbers out on what the reserve potentials is or could be?
Bill: I can’t really comment on that right now, because literally we are in the middle of the program. We have started the reserve evaluation program and we are doing about a hole every day and a half, so each month we will be publishing about 20 holes.
Our average thickness from our previous drilling is over 12 meters and the average grade is over 1.5% nickel, while their average mining grade is 1.18% nickel and 6 meter thickness. So whatever we find will certainly be significant in context of their current reserves. I suspect we might find a resource of up to several million tons.
David: I guess if you’re in the mining business, the one thing you have to worry about is commodity prices – it’s hard to conceive that moly, uranium, and nickel prices can stay here, or is that wrong?
Bill: My view is that I am fairly comfortable with the prices right now, I tend to watch the forward curves of the commodities like the 27 month pricing for nickel and copper, and they are about 25% lower then the spot price today, which is still very good pricing for high spiking commodities.
We can take advantage of these high prices because we are contemplating very near term production in the copper, in the nickel we potentially could be in production at about the same time as the copper mine, because we already have a mining permit.
This means that we can actually capture today’s prices or at least close to today’s prices purely by using hedging as a tool. I don’t necessarily believe we will hedge substantially, because I think that prices are here to stick around where they are for sometime.
David: The Dominican Republic seems to be a good country to operate from?
Bill: Yes. It is. Obviously a big part of their economy is tourism, which caters to mainly North American and European tourists. They have a very pro-western government there – 86% of their trade is with the U.S. and they really do not want to have any eruptions with the U.S., Canada or the European companies, because of course it would cut their tourism income as well.
So, I don’t think that we are going to see any “rocking of the boat” in the Dominican Republic as we’ve seen by some of the other South American governments.
David: Now, if you had to predict nickel and gold prices for a year from now, what would you go with?
Bill: In 12 months from now I would say we are liable to have a spike in nickel in the interim, but it will come down to somewhere around where it is right now. For gold I always have a difficultly in price prediction, because it is very hard to say where the drivers are coming from.
I tend to look at the price of gold in Euros, so I would say in Euros it will be about flat – more to the point I think pricing is currency related rather than necessarily tied to the U.S. dollar. So if the European Euro appreciates against the U.S. dollar, I think you’ll see Euro dominated gold going up!
David: The one question that we love to ask our people that we interview, of course, is if you could buy only one stock other than your own, what would it be and of course it would be appreciative of any doubles that you might have.
Bill: Well the one stock that I really like is a small company called Black Bull Resources (BBS), they have had some production difficulties on an industrial mineral project in Nova Scotia. They are just going back into production next month, and I think that they have gone through some of the tough times.
So, I think that just by getting themselves back on track again –it is a very small company, but the fact that they are reestablishing production, I think, is quite a key moment for a small industrial mineral company.
David: That’s only $0.13?
Bill: That’s correct!
David: Thank you very much for your time, Bill. |
