Mining & EnergyPodcast: Interview with Nigel Ferguson, Managing Director of AVZ MineralsStar Investing spoke with Nigel Ferguson, the Managing Director of
AVZ Minerals (ASX:AVZ).Nigel thanks for joining us today. Why do you stop by introducing yourself?Hi there I’m Nigel Ferguson, I’m the managing director of AVZ Minerals.
So Nigel, imagine you walk into an elevator and strike up a conversation with a stranger. They ask you what your company does and you have only a minute to explain. What do you tell them?I would have to say that we are developing the world’s largest developed resource of lithium for the EV markets.
And after five years at the company what do you consider to be your biggest competitive advantage?Quite simply, I think economies of scale are going to play here. We have, as I’ve said, the largest resource 400 million tons and a very good grade of 1.66% percent lithium. The resource based on potential increases through an announcement we made yesterday on the Manono prospect, We we see this project probably exceeding a billion tonnes.
If we wanted to drill it out completely. Obviously that doesn’t make sense at the moment. But what it does give you is a scale of where we think we can develop this project. So the scale is going to come into play with regards to cost benefits, with processing costs and transport costs; and I think also the major key that we have with the Manono deposit at the moment is, the chemical signature it has is very clean very low and detrimental or deleterious elements. So it’s a very clean product.
We don’t take too many tonnes to produce one tonne of concentrated greater than 6%. So I think those those points are being missed in the market and I think they need to be reinforced. I think that’s our biggest competitive advantage.
All right, fantastic. And so was there a particular milestone in 2018 you think was the biggest for the company or the one that you’re most proud of?Share price aside, obviously where we’re suffering with with pricing coming down on carbonate. So we’ve we followed everybody else in the herd there unfortunately but the three points we would make there is that we started and finished a drilling program with 27,500 meters or thereabouts completed initial resource which put us into the top three or four in the world.
And then obviously an updated resource which jumped us up even higher. I think very proud of the team that’s worked in country, they’ve worked extremely hard in very trying conditions and to produce a resource like that in such a short period of time is is exceptional.
Do you think there is anything in particular about AVZ’s approach that is innovative and many any examples of that innovative approach in action?We’ve always had an ethos of working in country with with our local employees even though the government has a stipulation to have 10 per cent foreign personnel working with the company we we are well below that. We only have one or two expatriates that work there.
The rest of our team, I’ve worked with for quite some time over five six seven years and they are exceptionally dedicated to the task and the Congolese technical staff geologists especially are very well trained, to the point where they’re probably better than some of the Western geologists The Graduate. So will we engage with them. We’re equal opportunity employers in countries so we have all of the tribes within the area working for us.
We have female drivers, we have male drivers obviously we engage with the local community we put back into the local community the incentive last year for us to move forward with employing people was that we had 300 displaced artisanal miners who had to move off our property to do some drilling we needed to do some drilling we wanted to be safe about it.
So essentially we re-employ those 300 artisanal miners to complete maintenance on the roads and the water drainage drains around the place. So we’ve essentially engaged I suppose we’re very much an African company with one or two people at its head that are not Africans but very much African in thinking. Very interesting. And I’m looking more broadly at the sector other companies are in the mining game that you hold in high regard.
And is there anything in the business model or other approach that you’ve sort of tried to emulate at AVZ?There are certainly companies out there that we’ve we’ve been involved with previously whether directly as as consultants or employees of companies and you take pieces away from that that you like. Specifically for us, there are groups in in Africa that have worked extremely well and done very good things within the mining space.
I won’t name them obviously but there are companies there that have, I suppose, sculpted our ethos and how we work and your previous question sort of a test to that is to engage with the locals. Make them part of the project give them a vested interest and let them get on with it because then they feel that they’re part of a bigger picture. That’s probably the most the most telling sort of side of things that we’ve seen previously.
Are there any challenges that you sort of looking forward to the company tackling head on in 2019.Well we’ve already started that process where we’re well and truly through this SBP share purchase plan. We’re in the final stages of the final days. We are really looking forward to getting back into the work programs. We have a definitive feasibility study to complete this year. That is probably the major focus of all of our efforts.
We will be upgrading employees and the pool of technical knowledge on board. We’re looking for an engineer at the moment we’re also looking for a potential non-executive chairman to come on board as well. So that’s the main thrust for us this year. We believe that on the back of the financing we’re doing at the moment that will be the last financing we need to do to get into a decision to mine – So final decision. So as you can imagine, there are lots of aspects that we need to tick off on financing off take metallurgical test work et cetera et cetera.
So that’s all coming through and we’ll be very busy on those aspects over the next three to six months. Preliminary discussions getting the final documentation in place across.
All exciting times ahead. Nigel Ferguson thank you very much for talking with me.It’s a pleasure. Thank you.
This content is produced by Star Investing in commercial partnership with AVZ Minerals. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
