TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH MIDAS RESOURCES LIMITED (ASX:MDS) MD AND CEO, GEOFF BALFE
Rebecca Richardson: Hello Rebecca Richardson reporting for the Finance News Network. Joining me for an update from gold and iron ore explorer Midas Resources Limited (ASX:MDS) is MD and CEO, Geoff Balfe. Geoff welcome to FNN.
Geoff Balfe: Thanks Rebecca.
Rebecca Richardson: Can you start by introducing Midas Resources?
Geoff Balfe: Certainly, Midas Resources is a Western Australian based fundamentally a gold exploration company and our main projects are in the Eastern Gold Fields and in the Pilbara.
Rebecca Richardson: What stage are your projects?
Geoff Balfe: The gold project is well advanced, that's the one we call Lake Carey. We've drilled out a resource there: 356,000 ounces at 2.3 grams. We've done a number of mining studies on that, which tell us that if we're going to go stand-alone, we need more ounces basically. And because of that, right at the moment we have a very aggressive exploration push. We've put a lot of work into generating new targets there and we've got a portfolio of targets that we'll be drilling in the next two quarters. So that's our main activity, it's probably 80 per cent of our effort is on that one project and the objective is to grow the resource base through exploration and acquisition to get to a stand-alone stage.
Rebecca Richardson: What's your stock price and market cap?
Geoff Balfe: The share price is around 3 cents at the moment and market cap's about 9.8 million.
Rebecca Richardson: Looking at your Lake Carey gold deposit south of Laverton, what is the size of the resource and potential of the site?
Geoff Balfe: The fortitude deposit has a current resource of 356,000 ounces at 2.3 grams. And that is potentially open-pitiable, although the modelling that we've carried out would tell us it's probably about 100,000 ounces [that] could be extracted in an open-pit. We have a couple of other resources also within the greater Lake Carey project area. We've recently announced a resource at the Gallant Prospect of 20,000 ounces at 2.2 grams and that's mostly oxidised and near surface, so should be easily accessible for open-pit mining. And we've got a very aggressive exploration push on generally in that Lake Carey Project area at the moment. So that'll be the main activity over the next two quarters - they're working up and drilling various targets.
Rebecca Richardson: When would you like to see the project in production?
Geoff Balfe: If everything went according to plan probably the earliest we would be able to get the project into production would be two years from pushing the button, because it takes that amount of time to actually get your permits. And the rate determining step is your Environmental Permitting.
Rebecca Richardson: Still on gold, you have another project Sunset Well in the Leonora District. What stage is the project and what do you know about the resource?
Geoff Balfe: Yes, that's in the Leonora area which is a major gold mining district - historically it's produced about 12 million ounces of gold in that area. It's a new project that we've been putting together over the last eight to 12 months. The resource that, well the first cab off the rank, is called the Prospero Project and it's a prospect that was drilled some years ago. There's not a JORC Compliant Resource there, but there is extensive drilling and gold mineralisation has been outlined. The drilling was done by Goldfields which is a very reputable company, But it doesn't fully meet the requirements for JORC. So, we're calling an exploration target of between .5 million and 2 million tonnes at a grade somewhere between 1 and 2 grams per tonne. We think that with only a modest amount of additional drilling that we'd be able to put this into a JORC Compliant classification. So, [it is] quite a straight forward one to take from a prospect to a resource, we hope. We've got two other quite large exploration tenements south of Prospero and one of those was granted just last week. We've got drill targets in that tenement where we've collected high grade rock samples from old workings, so that'll be first cab off the rank. The other tenement we would expect that that should be granted in the next couple of months and we've already got drill targets there that we've been working up. So we see that Leonora Project as very exciting in terms of its potential. There're many, many targets there and there's a lot of evidence for gold based on these old prospects.
Rebecca Richardson: Now Geoff, last year you acquired iron ore tenements in the Pilbara to diversify the Company. What can you tell us about your West Pilbara Project?
Geoff Balfe: We drilled out a resource of 11.5 million tonnes at just about 53.7 per cent iron, low phosphorus; .04 phosphorus, 7 per cent silica and 5 per cent alumina. The alumina/silica levels are a little bit high for what's called a channel line deposit and we would be looking at the potential to upgrade using a simple plant called a wash plant, [with] which you can wash out the clay. The silica and alumina is mainly tied up in clay minerals, so the idea is to wash the clay out of the product leaving behind the iron minerals. The other objective out there is to grow the resource through exploration and acquisition. There's a number of other similar resources in the immediate area held by other companies, and we're quite keen on a concept where there's a consolidation of similar resources in that area, which would then lead to a simplification of the whole infrastructure that is needed to develop them.
Rebecca Richardson: Last question Geoff. Where would you like to see Midas Resources in the next six to 12 months?
Geoff Balfe: I would like to see us with a new gold resource being drilled out in the Leonora area and resources being added to the Lake Carey Project through the drill targets that I've mentioned. We'd like to get to at least .5 million ounces in the Lake Carey area - that's reserve ounces not resource ounces. And that potentially could be a stand-alone project, so that just means drilling. We will need to do a capital raising along the way, we don't need to do one right now; we will certainly drill the Reach Prospect at Leonora using existing funds, we may need to do, or we would need to do, a capital raising for the much larger drilling programme that we've got lined up at Lake Carey. So that will probably be in the early part of next quarter.
Rebecca Richardson: Geoff Balfe thanks for the introduction.
Geoff Balfe: Thanks Rebecca.
ENDS
MDS Price at posting:
2.3¢ Sentiment: None Disclosure: Held
