Transcription of Finance News Network Interview with Australian Mines Limited (ASX:AUZ) CEO and Managing Director, Benjamin Bell
Lelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me today at the Africa Down Under Conference in Perth is Australian Mines Limited (ASX:AUZ) CEO and Managing Director, Benjamin Bell. Benjamin, welcome.
Benjamin Bell: Thank you.
Lelde Smits: Now could you start by introducing Australian Mines: What is your focus and where do you operate?
Benjamin Bell: Australian Mines is focused on gold exploration in Nigeria. The reason why the Company has entered Nigeria is to target gold mineralisation similar to that of surrounding countries, such as Burkina Faso and Ghana.
Lelde Smits: Now when did you list and what experience do you have on the Board?
Benjamin Bell: The Company listed in 2001 but until recently, was a nickel producer in Kalgoorlie. But with the softening of the nickel price in recent years, the Board took a decision to diversify into other commodities and gold seemed like the appropriate commodity to get into. For that reason we’ve been in Nigeria now for 12 months, targeting gold.
The Board composition of Australian Mines – it’s a diverse Board, we’ve got lawyers, we’ve got technical people, we’ve got bankers and engineers. So we’ve got enough capacity or capabilities within the Company to take us from the exploration phase, all the way through into development.
Lelde Smits: Looking closer at your wholly owned tenement holdings in Nigeria’s northwest gold province: Could you detail the geology of the area?
Benjamin Bell: The geology of the northwest gold province in Nigeria is very similar to that of the neighbouring countries such as Burkina Faso and Ghana, where there are large gold deposits already discovered. Australian Mines took the step of trying to get a first mover advantage into Nigeria and that gives us the capability of getting the best ground available in the country. The structure and the type of gold deposit again is the same as what we’re going to see elsewhere across West Africa. So the targeting and the styles that we’re using with exploration is much the same as the rest of the region.
Lelde Smits: And over how many areas is your exploration program?
Benjamin Bell: Currently we’ve got 2,500 square kilometres of land that’s been granted to us and a much larger area under application. From those 2,500 square kilometres, we’ve identified three areas that look high priority. They’ve got a lot of artisanal workings which demonstrate the potential for gold mineralisation. And it’s those three projects within that tenement package that we’re progressing.
Lelde Smits: And Benjamin could you elaborate on the area where you’ve identified the most exciting results?
Benjamin Bell: Yes we’ve identified three areas, the Yargarma, Kasele and Tegina areas – again up in the northwest of Nigeria. These areas are quite substantial ground holdings that we’ve got there. We’re targeting about 10 kilometres worth of structure in each tenement that’s known to host gold. Historically or over the last 12 months, we’ve done a lot of soil geochemistry and other sort of remote sensing, and we’re just moving on to our drilling phase now.
So the drilling phase will start in October, we’ll take a couple of months to finish the first drilling program which will be a diamond program, which is there really to let us understand the mineralisation more. And then we’re going to move into a much larger RC (reverse circulation) program in the New Year.
Lelde Smits: Could you tell us about the history of gold production in Nigeria?
Benjamin Bell: Nigeria has a long history of gold production. The decade before the Second World War, the country exported about three million ounces of gold. But following the Second World War when oil was discovered in Nigeria, the country’s focus was on developing the petroleum resource at the expense of gold. It’s only recently that the current Government has decided that because the mineral wealth is in the north and the oil is in the south, that the best way to redistribute the wealth across the country is to promote the minerals in the north. And it’s on that reason Australian Mines has gone into the country to exploit the gold resources.
Lelde Smits: And how has the Nigerian Government assisted Australian Mines in developing your operations?
Benjamin Bell: The Nigerian Government has been very supportive. They’ve provided us a lot of the initial data that’s been required by the Company to ascertain where in the country, is the best place for us to explore. Not only in terms of geological maps and geophysics, but also in terms of access to their professionals within the geological survey and other sort of professionals, that the Government have in their agencies.
Lelde Smits: Now to your financials. What was your cash position at the end of the last quarter?
Benjamin Bell: At the end of the last quarter, Australian Mines had $3.1 million cash in hand. At the end of this financial year because of a sale of some assets in Australia, we’ll get an additional $2.5 million. So what that means is Australian Mines exploration program is fully funded for the next two years.
Lelde Smits: Finally Benjamin. What would you like to see Australian Mines achieve in the 2013 financial year?
Benjamin Bell: The principal goal of the Company for this financial year is just to intersect economic grade mineralisation through its drilling. And that’s largely just to demonstrate to the market that Nigeria does have the potential to host gold deposits, similar to that of Burkina Faso and Ghana.
Lelde Smits: Benjamin Bell, thanks for introducing us to Australian Mines.
Benjamin Bell: Thank you.
Ends
AUZ Price at posting:
1.5¢ Sentiment: None Disclosure: Held
(20min delay)