This text was created in a narrative form to better express my experience in the visit to the Cascavel Mine. You will not find any technical language, or terms... Just the view of a guy who took some time out to visit the site of one of his investment. Some of you will be disappointed with the result, but I hope a few will appreciate.
CASCAVEL MINE - STATE OF GOIAS
21/06/2018
Left Brasilia very early in the morning, I manage to arrive in the town of Faina, just before 9 am surprised by the good road that lead to the town, Good roads are necessary to any business to succeed. One box tick…
Finally, in Faina, contact was made with Richard, letting him know that I was there waiting to be pick up, and 30 minutes later, finally, I could put a face in a name that have been spoke by many of us in this forum, for the last few months. A firm shake of hands, indicate to me that I was dealing with someone that like to have his hands on the job… A quick reminder of one of the posts that Jimone publish, about him getting his hand in the machinery to keep things going while there was a change of shift. Jumping in his 4-wheel drive, I came to realization why I was pick up at the first place, there is no chance of access to the mine without a vehicle like his… the terrain was uneven and stiff, and even the truck has to work overtime to conquer the mountain.
The trip from Faina to the mine did take about 15 minutes, and before we arrive in the main gate a conversation begins. The company new approach “Back to Basic”, Richard was quick to get out of the mark to point out that a lot of things happen in the last few months, lots of good things and some bad things as well. While driving, he answers my question about the boundaries of exploration ground of the company, he points out a large mountain in the distant horizon as one of the boundaries…. Over his left-hand shoulder, he made a comment about a House in a farm that the company use to rent for the old management of the Company… Over R$7000,00 reais per month that the company used to fork out every month to house some of our dead wood…. The truck he was driving, used to belong to the old management, and he was about to return the lease, and already made a contract to have the same car for a considerable discount from a different company. The first signs of an Company that is focusing in cut cost and be more efficient.
The first 15 minutes pass, and finally I could see the Cascavel Mine Plant from the distance, the gate was surround by perimeter wire barbed fence. The gates open, and a heavy armed security guard was there to process our entry to the mine. An excellent sign in my opinion, they are there for a reason … A few metres away in the car park, in the left-hand side, was the headquarters of the mine, couple of buildings that looks more like the farm house that was built for another purpose a long time ago. On the right side was the plant, I could easily recognize from the photos they publish in the presentation and market release from the Company. Getting out of the car, I was lead to the OHS manager, that quickly made a brief presentation of the safety rules in the site, the explanation of the areas that I was going to visit, and instructions about personal safety equipment. Opposed to the main build, we went to pick up the safety gear, and I notice the storage room, where I could pick in the distance some large drill equipment laying on the floor… There was about 7 or 8 Isle with selves 4 high, and all parts and tools well spread… We walk towards the mini warehouse, and Richard point out the amount of money, in the selves, something that the industry needs to getting going… He was a bit uneasy at one stage and point to me some of the material that is there now, was purchase from overseas a while back, and could easily been bought in Brazil, not just for a better price, but with no compromise in the quality. He got things going, and walking towards the main entrance to the mine, he was approach a number of times by workers, and greeting everyone by the name… Inside the mine, funny jokes where exchange between Richard and the mine workers… It seen to me, the mine workers have a good relationship with him.
Prior to the Mine entrance, I was surprise by another check-in point where another armed security guard was there to scan us with metal detector. Tags where issue to me, and placed in the board prior to my entrance in the Mine… Finally, on the one of the entrance of the mine, after a few metres down, I could quickly pick up the mineralization veins in the rocks… Keeping walking I could few that we are going down and in circle… on the side of every turn Richard point out the legacy of the “Garimpeiros” … He mentions to me that having this holes/excavations on the side, was a good sign, that they were in the right track to find gold, Garimpeiros never dig a ground if the gold was not there, Richard say… One stage I ask him what point we are in the mine, and Mestre was his answer and I couldn’t believe how quick did we manage to get there. In Mestre, he points out to a part in the mine, where very good grades where found, but poor design and execution of material removal in the mine, compromise the removal of the section of this particular vein. Another part in the mine he shows me another very high-grade vein, but was compromised by dilution… Again, poor design and execution were the culpable issue… Going out and passing some of the workers and the machinery on full trot, he asks me if he could show me something else. A big provisional gate was covering another tunnel that suddenly after a few steps inside the tunnel change to a huge gallery. Much bigger than the tunnels in the mine, Richard point out to me that the gallery came from a time, where the company outsource the digging and excavation, and contractors were just worried about quantity of material moved to the surface. Steps were not taken to make sure grades of recovery where satisfactory. They were playing dart on the dark? That was my question. Suddenly came to me the realization that many of problems that we are having today, have been inherited from previous decisions made by the management. In another point of the mine, large amount of water where running down the mine, and water pumps working overtime… They are trying to design and work the mine in a way that water can be drain naturally to a lower level and minimize/avoid unnecessary use of the pumps, which by the way cost a small fortune.
Out of the mine, I could easily locate the begin of “Back to Basics”… HM1 and HM2, they are there, still been used to test samples, and believe me, they still producing as well… a demonstration was made and from a sample he could show us the result, a few minutes and the operator could extract gold from the mud with the most basic method. Nearby, we went to the shed where one of the Toro earth movers where maintained by the personal, it was schedule to coincide with a proposed blast. In the way out, another frisk search with metal detector was done before I could leave this part of the Mine site.
Next stop, the process plant, where the HM3 was in full operation. I could see the challenge in process the material in a fine mud for the plant. The hammers where the part of the HM3 that work overtime, wearing off quickly, Richard point to me very small parts of the hammers in the mud mix. A new supplier was on the site, and he was delivering brand new harmers to the Company, free of charge for a trial. Each piece weighting 21 kg was promised by the representant of the Company Centro-Oeste Engenharia, that they could last 3 to 4 times longer than the current supplier… Wallace Goncalves, a young Geologist working for us and young graduate in the University of Mato-Grosso, told me that more than ever they are looking for solutions, trying to do things better and looking outside of the box… Looking at current suppliers and trying to increase output and minimize input, constantly looking for new ideas. Very much a Back to Basic approach…. I manage to go to the top of original plant, we could see the plant from above and see a few meters away some of the tailing… 38000 T to be more precise according with Richard… Ask about the numbers, and grades, Richard didn’t want to put numbers on what is up there. He show me the photos that he took a few days before of a diesel engine that will be fit in the HM4. I was surprised and disappointed by HM4 not been on site by now, but delays some caused by the strike, and by others issues, did not help the delivery. Complaining and winging will not help the cause, and Richard have score more good point than bad, so I am happy to wait and see the current management getting the installation right from the word go. As well, I could see the diesel thank on the corner of the plant and ask about the increase of storage. His answer was that a second tank will be order and double the storage capacity to ensure that plant can operate in case of another strike or any other disruption.
The safe room, was a place that I did not expect to visit, and to see the final stage of production was a bonus, looking at Richard I ask him if he feel accomplished looking the results, his body reaction and his answer was that a lot more work need to be done, a third shift is on his way, and the last few months have been the construction of a new company… Lots of dead wood has been moved way and a focus on grow and development is a new order. A new work force, with new culture are in the process of been build… The cost of making sure this happen are high, and he was not trying to excuse himself, Richard told me, but shareholders will never know the full history, like bills from 2015 been paying right now by current management. I ask about Anglo JV, and his comment was they are still talking, there is a win/win situation for both parts, and the proposed JV is not more than a proposed agreement. There is a lot of options that they are considering, and a deal between both parties will be the likeable outcome. There is a lot of bargain chips that OGX hold in their hands right now, and Jeremy Gray are trying to use them well and wisely. Another box tick….
Back to the main office, Richard was on the phone to Jeremy Cray, I did have a chance to exchange a few words with him as well. He seen very positive about the current project, the communication between the two are daily according with Richard. The phone connection keeps going down and coming back but we manage to exchange a few words. He is living in England, and Richard was saying about wake him up in the mid of the night to discuss things in a daily basis. I believe that the collaboration between Richard and Jeremy, have been a positive point for the Company, with Richard having almost full white card to run the show, making the process of decisions run better and with no delays to make sure the company don’t lose time in unnecessary delays.
Outside of the Office, I met Israel Oliveira (hope I got his surname right), a new face in the game, a geologist with lots of experience, 24 years between companies Like, Anglo, Vale, Jaguar and others. His explanation about the introduction of a process of making sure the optimization of resources available and introduction of new ones as well… there is a lot of others mines in the region, and some on then are on care and idle, maybe opportunities could bring new technology/equipment for us. His expertise hopefully can bring extra value to us.
Going outside of the main office, came to me the realization that how much is on stake here… There us the shareholders, the managers, the directors, the workers, the good people of Faina, all of us, hoping and working on the success of this enterprise.
Bid.Rod
OGX Price at posting:
6.0¢ Sentiment: Hold Disclosure: Held
