well worth a look, page-2

a news clip worth a look Had this on the desktop ,it is a good read as it give you some background on Peter Secker who is a director,
some percentages have increased since this was printed

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It's ore not China fever driving Michelago


Given this, it is surprising not to hear any of the Friedlandesque language when discussing China with Peter Secker.
Not once in his interview with Gold Mining Journal did Michelago�fs managing director slip into romantic metaphorical dialogue that so often affects discussion of China today.
There was no mention of the awakening "red dragon", or of its or its "insatiable appetite" for resources.
When asked why Michelago chose China as its focal point, Secker�fs reply was straightforward. �gWe were focusing on refractory gold resources high in arsino-pyrite.
China has probably the largest undeveloped arsino-pyrite resources anywhere in the world.�h But there is much more to the story.
Michelago, in 2003, transformed from a stock trading at less
than one cent per share to a company with advanced gold projects and a share price trading as high as AUD0.16.
This followed the stagnation of its wind power development and exploration on base metal targets in New South Wales.
Secker began his professional association with China in 1994, a time when the communist nation was still in the early stages of easing economic restrictions.
He was involved in the foundation of Sino Mining Ltd, the company which eventually became Sino Gold. As vice president of the company, he played a major part in Sino�fs acquisition of an 86.2% interest in the Jianchaling gold mine. Jianchaling produced more than 70,000 oz of gold in 2003.
In his time with Sino -- including three years living in China -- Secker developed more than just a fluency in Mandarin.
He developed a contact base and an understanding of Chinese business which now gives Michelago a head start on its contemporaries.
After leaving Sino in 1999, Secker began using connections to assemble a suite of projects through his private company TST.com Pty Ltd.
One product of Secker�fs work was a partnership with Shandong Tarzan Bio-Gold Co Ltd, a subsidiary of the majority local government-owned Laizhou Jincheng Gold Mines. Secker�fs TST.com acted as project manager for the design, construction and commissioning of Shandong Tarzan BioGold�fs bacterial oxidisation plant, described by Secker as �gone
of the most modern bacterial oxidisation plants in the world�h.
In May last year, TST.com entered into an agreement with Michelago to vend the private group�fs Chinese interests into Michelago in exchange for shares (Secker is now Michelago�fs largest shareholder).
The main attraction for Michelago, at the time, was the opportunity to earn from Laizhou Jincheng a 60% stake in both the Jinya gold mine in Guangxi province and 213 square kilometres of surrounding exploration leases.
According to Michelago, gold mining in Guangxi province has been relatively small scale, and has seen only minimal systematic gold exploration.
Despite this, Guangxi is considered part of China�fs �gGolden Triangle�h, which also includes
the Yunan and Guizhou provinces.
Last September Michelago added to its Chinese exploration ground by signing another Letter of Intent with Laizhou Jincheng to earn 51% in any gold resources below 500 metres depth in a 45 sq km
area of the Jiaodong (Shandong) Peninsula.
The area includes the Jincheng mine, which has been operating since 1982,
currently produces 25,000 oz gold annually and has sufficient resources for a further 20 years of operations at current
production levels.
It is easy to see why Michelago, as well as the substantial number of other foreign companies trying their hand at gold,
are excited about the country�fs potential for the yellow metal. Over 15 years ago, the Chinese government, which
controlled nearly every gold miner in China, decided to cease funding gold exploration. The communist Chinese had
higher priorities and instead concentrated their efforts on exploration for base metals.
The thought of a geologically proven country only slightly smaller than the United States that has had no governmentfunded
gold exploration of note since the 1980s should be enough to make the mouth of any serious gold prospector
water.
But while Michelago�fs securing of exploration has been promising, it is its application for a stake in BioGold that
has arguably sparked the most interest in the company.
Less than three months after the company�fs deal with TST.com, Michelago announced it had signed a letter of intent to earn a 40% stake in Laizhou Jincheng�fs subsidiary Shandong Tarzan BioGold, which owned the bacterial oxidisation plant with which TST.com had assisted, a cyanide-leach plant and a 51% stake in a gold refinery.
In September 2003,shortly after Secker replaced Andrew Haythorpe as managing director, Michelago signed a Letter of Intent to increase its
proposed share to 51%. By December, the company had increased its proposed share in BioGold to 82%.
One of the key lures for Michelago, on top of BioGold�fs estimated AUD135 million profit for 2003, is the perceived
opportunity to restructure, reduce costs and increase profits at the company.
This, according to Secker, is one of the key
skills Australian resource companies can take advantage of in China.
�gThe average Chinese gold mine today is
equivalent to the average Australian gold mine of the 1960s,�h Secker said. �gWhen it comes to areas such as computer modelling, mechanisation or resource optimisation, the Chinese are lacking behind Australia.�h
By introducing techniques commonplace in Australian mining, a company in a less sophisticated environment can not
only reduce operating costs and increase efficiency, but help please a Government eager to see its mining industry
modernised. Much of Michelago�fs time in China thus far has been spent working through the Chinese approvals process,
and the company has made substantial progress to date.
Secker diplomatically describes the Chinese regulations regarding foreign companies as a similar but drawn-out version
of the regulations faced by foreign companies entering Australia. In China, it is preferable for foreign companies to enter
into a Sino Joint Venture Agreement (SJVA) which is submitted to the Chinese Ministry of Commerce. The SJVA
includes details such as a budget, a business study and resources and reserve estimate. While agreements can take six
months or longer, the foreign company is then entitled to substantial tax breaks and can repatriate profits.
In the case of Michelago�fs BioGold SJVA, the company will be entitled to three years of tax-free earnings and two
subsequent years taxed at half the standard corporate tax rate. Benefits at Michelago�fs Jinya exploration ground could
be even more substantial. Because Guangxi is one of China�fs poorer provinces,
Michelago can enjoy five tax-free years
and five years of a reduced corporate tax rate.
Just how soon Michelago can begin to enjoy these benefits will be better known in the coming months, as the company�fslicensing approvals fall in to place.
Read more Australia's Paydirt


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abuse ridicule and the odd mention of ramping would be expected as usual

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