Noricum Gold Ltd (LON:NMG) Managing Director Greg Kuenzel caught up with DirectorsTalk for an exclusive interview to discuss the raising of £1 million for the Bolnisi project and early stage production opportunities
Q1: This morning we saw news that Noricum have raised £1 million to advance production at the Bolnisi project, what can you tell us about that Greg?
A1: Just to recap the project, it’s a new project for Noricum Gold, we acquired the Bolnisi project in Georgia mid last year. Having previously focussed predominantly on earlier stage exploration, we had, over the last 18-24 months, being trying to put in a strategy that saw us acquire or pick up more developed assets and having looked at quite a few, Bolnisi was right at the top of what we’d seen. Historically it’s had quite a lot of work undertaken on it, it had a lot of drilling in Soviet times, in the 60’s and 70’s, which has led to an overall Soviet drill defined resource over the area covered by our licence of close to 1 million tonnes of copper, over 6 million ounces of gold and 20 million ounces of silver. I guess more importantly though looking at the development and the near term production potential of the 17 odd targets we have covering the 860 square kilometre licence area, we have identified 2 priority targets; Tsitel Sopeli and Kvemo Bolnisi, now these have had a significant amount of existing drilling undertaken on them so they’ve got existing resources. They’ve had more recent work undertaken, including drilling and geophysics, by our local partner and importantly they’re very close to our partner’s 2 existing operating copper and gold mines and other existing infrastructure and this is critical for us in moving this project forward and moving through development into early stage production. At those 2 sites, we’ve identified 2 at-surface secondary quartzite gold mineralisation deposits that, given we have an existing mining licence in place and access to the local infrastructure, provides us with a very quick, cheap and easy path through to initial production and cash flow and that’s obviously important for a variety of aspects. Number one it means we can continue to develop the bigger targets using internal cash flows, it helps us develop the relationship we’re building with our local partner in that we’re being able to bring in new management, new technical expertise focussed on the real commercial and economic aspects of these projects and I guess, also sets us aside from a lot of the other companies out there that are at this late stage exploration and development stage.
Q2: You’ve said you can develop early stage production opportunities as soon as Q3 this year, how achievable is that and is there anything that really could hinder the timeline?
A2: No, look we think it’s very achievable, we’ve tried to build in some slippage into those timeframes. As I said, these 2 early stage targets are relatively small but they do present the opportunity to provide us with significant cash flows. They are simple because they are at surface so the drilling we’re doing at the moment is from surface down to 10 metres, the style of mineralisation is a style that’s been mined and processed in the area for 30-40 years so it’s very well understood so there’s limited metal processing work that needs to be undertaken and as I mentioned, we have a mining licence and the intention is to utilise our local partner’s existing operations to process these. So it is a very very simple process, we don’t need any CAPEX, we don’t need any infrastructure and as a result, we bypass things like feasibility studies so no, we think those targets are very achievable.
Q3: Ok, so what are Noricum Gold’s immediate plans for the money that you’ve raised?
A3: A portion of it will go towards the drilling that’s currently been undertaken as I guess the final step before we start pit planning and the mine design. A lot of it will then continue to be used on the overall development work which includes converting some of the balance of the existing resource to JORC and also looking at developing some of the larger assets that we have so once we’ve commenced this early stage production we then, as we come into next year, have some larger deposits to move into that next stage so ideally we want to look at having continual production year.
