Hey AA
This Q&A is for those who can't get to the workshops but want a taste... and also for Grub who has a lot of skin in the game and can get quite anxious!
Poet
Hi Ross,
I’m anticipating that shareholders are eager to get an update on S32 and East Timor developments and associated budget, cash flow and fundraising issues. However, given that this is my first company gathering, I’d like to ask some big-picture questions if you don’t mind (see Ross' responses in blue below)…
Inca seems to be punching well above its weight as a junior explorer:- Is it true only 1:100 juniors become majors? Probably more like 1:1,000 to 1:10,000 juniors to become majors. Juniors to miners (excuse the pun) more like 1:100 to 1:500.
- What do you owe the company’s potential success to? For me, it’s all about the quality of the project and responsible management of the treasury. Again, for me: Success = discovery = rerate = shareholder wealth
3. How would you summarise the Inca journey to date?
a. We’ve stayed focussed on the prize – a major discovery
- We’ve rode the dumps and disappointments:
i. Technical discovery at Chanape but Cu in DHH-001 was probably 0.25% shy of creating a big story
ii. Majors lining up to sign at Chanape but none did in the end (Teck came on site 9 times)
iii. Lots of veins at surface at Humaspunco but grades in drilling were below expectations
iv. Operating in poor money markets (pine for better days)
c. We’ve got something special at Riqueza and South32 recognise this.
4. How would you summarise your own journey as a geologist during this time? Pretty much the same as the company’s. Moments of pure joy (looking at the drill core coming out of the ground at Chanape (DHH-001), etc… and pain (reading the assay results of DDH-001), etc… but focussed on the prize – now it’s delivering South32 to Riqueza. As a corporate geologist – lots of difficult conversations with shareholders, some nasty things said about me on HotCopper, but actually really enjoy interacting with shareholders.
5. In hindsight, what would you do differently as the managing director?
- I wished Inca could have been listed via an IPO not via a merger. Cleaner, less shares at the beginning. Maybe, I could have delayed listing until times were better.
- I think our first two years in Peru were difficult in terms of knowing the “lay of the land” and our spending was too high in places (use of expensive consultants).
- I could have handled the out-going chairperson Sue Thomas better.
- I think we could have started the workshops earlier (Jonathan’s idea).
- …. I could write more on this….
6. What are the main challenges for the company going forward?
- Exploration risk (always front and centre).
- Managing the treasury (not far behind).
- Operating in poor money markets (China-USA tariff tiff, Brexit).
- Competing investment trends (the Canadian “dope floats”).
- Malicious, unaligned, poorly timed Inca trading.
- If it comes, optimising a TO
7. From recent workshops, what would you say are the main questions and concerns of shareholders?
- When will South32 sign the deal?
- When will South32 start drilling?
- What’s the next “Riqueza”?
- Why is our cash so low?
- What are you doing to manage the cash?
- When will the tenements in East Timor be granted?
- What’s the vanadium project about?
8. Lastly, Riqueza’s geophys analysis and final independent report were truly astounding results with so many tier 1 targets identified. You have previously said that you would like to develop Cerro Rayas similar to Riqueza, how would you see these projects as being similar yet different to each other?I could write for pages on this, but I’ll try to be succinct:
- Riqueza (R) and Cerro Rayas (C) share similar geology/structural setting.
- R & C share similar prospectivity for carbonate replacement Ag-Pb-Zn deposits (CRD).
- The tier-1 Antamina mine is a CRD.
- R also has porphyry potential – C less so. There are dozens of tier-1 porphyry mines globally (a dozen in Peru alone).
- R appears generally more fecund with mineralisation than C – this could be just the level of work we’ve completed.
- Activity in the area of C includes BHP, Anglo American, Nexa (formerly Milpo).
Hope this helps and whets your appetite for Adelaide.
Cheers – Ross
(20min delay)
