lunch with ws

Hi gang

Not posted for a bit as I have been confused as to what is happening as a number of us are no doubt.
I made a call to Warren Strange and asked if we would mind meeting up for a chat. I also mentioned afterwards how many HC shareholders would be interested in what he had just told me and if I could post a summary of what we discussed. He said he was happy for that to happen if I thought it helped shareholders understand what it is he believes is achievable with the GT3000 and also Coretrack.

ok...I might try and do it in a bullet point summary form as we discussed lots and went off on tangents and then back again. Mostly my fault because WS is an engaging and incredibly knowledgeable about all to do with drilling and not simply GT3000 stuff. There is so much more opportunity but that is for another day.
Some of the below is answers to direct questions...(move over George Negus)and other stuff is just Warren getting excited.

One thing he agreed with me straight up on was that he agreed that it would be good to see a board with some skin in the game as this would be more of an encouragement for them to go drilling. As it stands currently they get paid without generating income. That said, we both believe the board is focused on CKK being commercial.
So some bullet pints in no particular order

1."Bernie Kelly was a decent bloke and is genuinely trying to get the board to commit to purchasing the drilling equipment required to go energy and water drilling."

"that Bernie was trying to convince the board to allow him employ some people with industry skills"

2."there is as growing demand for geothermal drilling from the Australian Geothermal companies such as Petra Therm, Panax and Kuth and Warren believes Bernie Kelly is now actively perusing those opportunities"

3."There is a massive shale gas drilling boom beginning in WA and in particular in the Canning Basin where possibly thousands of deep holes will be required during the next five years. Other than the expensive US drilling services, Globe Drill is in the best position to service this market with the GT3000 providing the initial vertical exploration wells to 3,000m."

4."the GT3000 is possibly the best water boring rig in the world and currently major mining companies such as BHP and Rio are looking for water boring rigs. Once Globe Drill has purchased the mud tanks and pumps required, the company will be able to service some of that demand. Rig earnings in this market are above $50k (I think he said $50k?) per day at the moment for rigs half the size of the GT3000"

5."several large geothermal contract opportunities currently exist overseas and Globe Drill can offer a far higher value service than any of the US energy drilling services"

6."WS believes the company will have to consider building a second and third rig very soon to meet this demand"...I heard that and sat up :). Cash may be an issue and I suggested surely with his contacts in the game he could get a consortium together to raise $10 or $15m pretty quick. Especially if they had some signed contracts. He just smiled and said anything is possible.


7."there could be deep energy drilling contracts close to home that could take place prior to the Whicher Range contract next year that will remove any doubt of the GT3000 capabilities" I offered my back yard if they fund it based on my power bills :(

8."that customers with industry experience have no doubts about the GT3000’s capability and that AWT did thorough DD on the rig with their engineers prior to granting a contract for their deep well near Busselton." Just reitereating that the drill was all systems go.

9."That the WA designed and built GT3000 is so efficient and environmentally friendly that south west residents would hopeful be pleased that Globe Drill was to drill the Whicher Range hole and not a traditional US technology energy rig that would produce ten times the emissions than the GT3000 and take three times as long to drill the hole"

I asked about delays and was told that delays are common and that access at Whicher could be an interim issue but wasn't in a place to comment further. He believed if there were any delays they would not be for a long period and would not be of CKK's creation. He did stress that the auxillary equipment needs to be either purchased or hired prior to the Newcrest job.
I asked about profitability and he said he wasn't in a position to comment because he wasn't actively involved in the contract quotations which he seemed genuinely disappointed about. He also mentioned he is hopeful to be in a postion to add value via a consultation process in future quotes and is actively seeking drill work and passing onto Coretrack.
I got the feeling that there is a rift or something just not quite right with the relationship but also got the feeling WS is either over it or simply wants to see this business moving towards its potential.
I have had the feeling at times for a while that perhaps all was not well in the camp and still don't know what the issues if any were/are. He kept those cards close to his chest but he is extremely motivated and committed to making this company a success and gave Bernie Kelly a big tic.
Who would of thought a guy from Kalgoorlie could understand scottish :)

think that is about it but if I think of anything more I will post later.

Enjoyable,positive and captivating is how I would describe my lunch date and certainly took away a few concerns lurking in the back of my mind.