News: Atlantic Gold taking Touquoy to production

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Transcription of Finance News Network Interview with Atlantic Gold NL (ASX:ATV) Executive Director, Wally Bucknell



Lelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me today from Atlantic Gold NL (ASX:ATV) is Executive Director, Wally Bucknell. Wally welcome to The Gold Investment Symposium here at Luna Park in Sydney.



Wally Bucknell: Thanks Lelde, appreciate it.



Lelde Smits: Atlantic Gold is a junior gold explorer focused in Nova Scotia, a province of Canada. Could you introduce us to your projects?



Wally Bucknell: Yes Lelde we’re doing three things; Our most advanced project is the Touquoy project, secondly Cochrane Hill is the next project in the pipeline. And thirdly, we’re undertaking some regional exploration in this very gold rich province that really hasn’t seen exploration of the type that we’re doing, for probably a century.



Lelde Smits: Looking closer at the Touquoy gold project, where you have been targeting major production, how are you progressing?



Wally Bucknell: Well we’re almost there. The thing that’s held us up, I’d have to say for the last number of years, has been acquiring the surface titles that sit over the mine site. And, we’re down to the last half a dozen or so and we would be reasonably confident that we will complete that process by first quarter of next year. And, we have completed the feasibility study; we’ve completed the vast amount of permitting. There’s just one little thing called industrial approval that doesn’t have any project risk, and we have a mining lease. And we’ll move into project financing, once we’ve completed the surface titles acquisition.



Lelde Smits: And what are your plans for financing the project?



Wally Bucknell: We want to limit the burden on our shareholders as much as possible. So the major part of - perhaps 65 per cent of the financing, will be primary debt. And we’re looking at a number of innovative ways to fill the non-debt part of the project financing, whether it’s through royalty streams, gold loans and so on. So that the amount of residual equity, true equity we have to raise, is as minimal as possible.



Lelde Smits: So Wally, when do you plan to be in production at Touquoy?



Wally Bucknell: Well we’re looking at the moment in the first quarter of 2015.



Lelde Smits: And what are your production targets?



Wally Bucknell: Its 85,000 ounces a year, our cash costs are $US600. That includes $40 an ounce of royalties and the capital cost is about $140 million.



Lelde Smits: And what is the anticipated internal rate of return?



Wally Bucknell: Well its $US1,700 gold price which is what we use, the price being over that at the moment. The internal IRR is a bit over 50 per cent. The NPV [net present value] is over $200 million – US, Canada, Australia; it’s all pretty much the same.



Lelde Smits: You also have another project in Nova Scotia, having recently completed the acquisition of the Cochrane Hill gold deposit. Wally, what data do you have on the size of the resource and what drilling is currently taking place?



Wally Bucknell: We were successful in purchasing 100 per cent of Cochrane Hill earlier this year and that was at a cost in effect of $3 an ounce. It was a good buy. There is something over half a million ounces of resources in Cochrane Hill, about half inferred half indicated. We’ve spent about $1.5 million on Cochrane Hill, so it is we know less about it of course than Touquoy. And at the moment our plans are to - given that it’s too hard to truck the ore from Cochrane Hill to Touquoy, we will – our plans at the moment are that we would move the plant from Touquoy to Cochrane Hill, on completion of the Touquoy mining operation.



Lelde Smits: And what is your production target for the entire Nova Scotia goldfields region?



Wally Bucknell: Just with Touquoy and Cochrane Hill alone, there’s approaching a million ounces, 900,000 ounces and a 10 year mine life. But in particular, this comes to the third part of our activities in Nova Scotia, the exploration of this 400 kilometre long goldfield. The last substantial production was pre-World War One, so there’s been a century of not a lot happening. Yet we see it really quite unexplored. And in particular, for the style of mineralisation that Touquoy represents, this is not quartz-vein hosted mineralisation that I would say most Canadian geologists would understand that Nova Scotia is important for. But what we’re looking for is shale-hosted disseminated gold and it’s eminently commercial from our experience at Touquoy.



Lelde Smits: To your financials now, and Atlantic Gold has just completed a Placement Agreement to issue shares to an existing shareholder. How much did you raise and where do you plan to put the funds?



Wally Bucknell: We raised a little over $3 million and that was for the purchase of Cochrane Hill. It’s for continuing the surface titles acquisition at Touquoy, working capital and exploration in the Meguma goldfield.



Lelde Smits: Finally Wally, what are the major milestones Atlantic Gold is aiming to reach in 2013 as you move toward maiden production in 2015?



Wally Bucknell: It should be a good year. It’s completion of the surface titles acquisition program, the putting away of the project financing and commencing construction of the Touquoy mine, along with regional exploration and some drilling at Cochrane Hill.



Lelde Smits: Wally Bucknell, thank you for the update to Atlantic Gold.



Wally Bucknell: Thanks Lelde, nice talking to you.





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