Intermin Resources’ (ASX:IRC) shares are currently sitting at $0.065, for a market capitalisation circa $10 million.
Taking into account cash of $2.1 million and listed ASX investments circa $4 million, the Enterprise Value of the company is $3.9 million.
Intermin recently revealed bonanza grade gold results from reverse circulation drilling at its Selkirk prospect, part of the Menzies project north of Kalgoorlie in Western Australia.
Highlights include: 3 metres at 88.62g/t gold from 84 metres; while multiple high grade shoots were identified amenable to open cut and underground mining. Menzies has an extensive history of high-grade gold production.
To discuss the next steps, we are joined exclusively by the recently appointed managing director, Jon Price, in Proactive Q&A Sessions™.
PROACTIVE INVESTORS: Welcome Jon.
First of all, following the bonanza grade gold discoveries, what are the next exploration steps at Menzies?
High grade results like these from Selkirk are typical of the Menzies region, a bit tougher to find but very rich when you do.
We have so far defined around 100 metres of strike at Selkirk and the veins are open at depth with multiple vein sets identified.
Planning for the next drilling program is already at an advanced stage to follow up Selkirk along strike and at depth together with Aspacia, Pericles and Yunndaga.
We expect to be drilling again early in the June Quarter.
Can you take investors through the gold production history of Menzies, and what Intermin Resources is looking to achieve?
We are exploring in one of the last remaining unconsolidated gold provinces in Western Australia, and the Menzies gold project has historic production since 1894 of over 1 million ounces at 22g/t gold.
There is significant potential for high grade underground ore below 80 metres depth, the project only has limited shallow drilling in most areas and there has been no mining activity since the 1990’s when gold was A$500 an ounce.
Our goal is to grow the resource inventory below the existing shallow oxide resources within our own tenure, look to consolidate the Menzies to Kalgoorlie corridor with value accretive acquisitions and generate a 4-5 year mine plan to justify a standalone low tonnage high grade mining and milling operation in the Menzies area.
What metallurgical information does the company have on the project, and what plant design would be used for gold extraction?
The gold occurs mostly in the rich quartz veins so the metallurgy is excellent with a very high gravity recoverable component.
This leads to a simple low cost milling circuit design with a high capacity gravity circuit required to maximise recovery and minimise reagent consumption in the CIL circuit.
We can also utilise in pit tailings storage to reduce capex further.
In regards to ore or milling agreements, is there potential for Intermin Resources to monetise high-grade ore through third party processing?
The nearest operating mills are 100 kilometres away with the toll mills 130-150 kilometres away so while this is certainly an option in the short term, we are mindful that haulage and toll milling charges erode margin.
Our ultimate aim is to use milling infrastructure we have access to in Perth to construct a flexible low cost 3-400,000 tonnes per annum circuit in the Menzies area to process not only our own ore, but potentially any third party ore that is mined in close proximity.
The focus for us will be on cash margins, not scale.
A small mill can be run continuously or on a number of different roster scenarios to match the ore mined. I have learnt the hard way that the key is to honour the geology, maximise ore extraction and minimise dilution.
You were recently appointed managing director, what specific goals and achievements did the company outline for you during 2016?
Interestingly, Intermin has been an ASX listed company for 25 years but many do not know much about it.
We have developed a clear strategy for our Menzies and Kalgoorlie projects, have excellent JV partners like Evolution Mining over the Binduli north project and Mithril Resources over the Nanadie Well project, royalty and holding positions that can deliver value and the proprietary calcines gold project technology.
Our roadshow is to raise awareness and articulate this strategy to those interested in the gold space.
More specifically, we aim to significantly increase our resource inventory through exploration, complete mine optimisation studies and develop the mine plan.
We are also on the lookout for acquisitions in our area of interest and see opportunity to consolidate at, what has been, a difficult time for junior explorers.
Finally, why should an investor consider adding Intermin Resources’ to their portfolio?
Intermin Resources is in the right commodity in the world class goldfields of Western Australia, we are well-funded and have an enterprise valuation of under $3 million.
For those looking for value and capital growth in the gold sector, we believe that Menzies can continue to deliver exploration success like it has to date to build a production profile.
I believe our other assets can also deliver value and neither are reflected in the current share price.
I joined the company as I see considerable potential to build a gold business in this very exciting part of the world.
And with the Australian Dollar gold price currently over A$1750 an ounce and costs of doing business declining, we believe the timing is right.
PROACTIVE INVESTORS: Thank-you Jon.
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