The Australian gold producer Focus Minerals (TSX A0F610) has a turbulent 2011 behind him. We spoke with CEO Campbell Baird on progress in the integration of Crescent Gold and the plans for the current year.
Anlagen auf dem Three Mile Hill-Projekt von Focus Minerals
Plants in the Three Mile Hill project of Focus Minerals
GI: Mr. Baird, please take our readers briefly the events of the past year together.
CB: 2011, the business of Focus Minerals has undergone a complete transformation. We started with only a producing underground mine and ended the year with four producing mines in two large regional mining centers. We have doubled our resources, our reserves tripled and doubled our gold production target for 2012.
GI: What is making the integration of Crescent in the business model of Focus? What steps do you take in this regard?
CB: The integration is progressing well and we have been working as a team, since the focus has taken a majority stake in Crescent. We have appointed Mark Hine as COO of the group. Mark is an extremely experienced project operator, the Crescent only joined a few weeks before we bid our duties. Mark and his key team were critical to the successful implementation of the turnaround of the Laverton operation and he now brings his experience across the enterprise. We have become active in the field of geology and Dean Goodwin has been appointed head of the geology of the new company. Dean has a great track record and discovered the gold mines in the late 90 Redoubtable, Santa Anna and Intrepid on Lake Lefroy in the north of our Treasure Iceland project when he was still working for WMC. Before Dean came to us he was six years Managing Director of Barra Resources Explorers and he brings these skills and experience to the company to ensure we make the best of the regions of Laverton and Coolgardie.
GI: How are the campaigns of the Laverton processing ore with Barrick Gold? What is your estimate will vary according to the production?
CB: We did it in just six months at Laverton an almost unbelievable turnaround. In the December quarter, we reduced 36,000 ounces, which is a record. We have developed three new open pits and have a planned production pipeline, which should lead to an operational production of 25,000 ounces per quarter in the calendar year 2012. This is a great development for the Laverton assets, which was achieved with the right people, processes and plans.
GI: The production cost of the Laverton ore were in the past at around 1600 AUD per ounce. Where the costs are and how you want to push it?
CB: The success story of Laverton is primarily interested in establishing the production pipeline, and to plan so effective that we could ever deliver ore to the production on the bearing surfaces of the Barrick mine. We have achieved this degree of consistency and allows us to focus on reducing costs. We have already made great progress and thereby reduce the cost to 1467 AUD per ounce in the December quarter. We plan to reduce the production costs are now in the coming quarters initially to 1,250 AUD per oz
GI: Will the Laverton production positively to earnings?
CB: Yes, we expect that all four producing mines in 2012 cash flow will be positive.
GI: What about the "old" Focus-mines? How it's going ahead with the production and plan further expansion?
CB: The expansion of Coolgardie projects went well. We put on a continuous and uninterrupted production from the underground mine and the Tindals Tindals mining project, we now have three mines, which contribute to production and mine is the target of 30,000 tons per month closer. On The Mount, we opened three new levels and are continuing to expand it. 2011 it went to fast growth in 2012 is about a solid and stable production.
GI: What does your exploration budget for 2012? What do you want to do with it?
CB: We are planning this year to spend a total of around 16 million dollars for the exploration and us to focus on three main areas:
Treasure Iceland: This is a very exciting project which we are gradually to the bottom. We have just completed some drilling provision of air core objectives and plan to carry out diamond drilling on a new gold system, we have recently identified three kilometers off the island.
Coolgardie: Our exploration team has spent in Coolgardie in December with selecting the priority targets for exploration in and around Coolgardie, where we have the opportunity to demonstrate substantial new resources quickly. The team will systematically work through these targets for 2012.
Laverton: We have to Laverton over 1,200 square kilometers of land that is crossed by a number of major geological structures that are experienced in the past, very little exploration activity. With just a few months of drilling in the past year, we have demonstrated the potential of this area and added to the Apollo project, 100,000 ounces of resources. How to Coolgardie, the team has identified a number of objectives and priorities sorted according to which we will focus with the holes. We believe that we can quickly prove more resources.
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FML Price at posting:
5.2¢ Sentiment: LT Buy Disclosure: Held
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