|
Hunter Dickinson Inc. |
|
|
Mining Beyond Borders: Insight on Trends in Global Mining – An Interview
with Hunter Dickinson Inc. Offering Commentary on Global Business Activities
How does the company view last year’s trend of large-scale mergers and
acquisitions in the mining sector?
We are seeing an inverse relationship between acquisition activity and
exploration expenditure. Given the low success rates in grassroots
exploration amongst major mining companies, we have seen a steady decrease
in exploration expenditures, especially between the mid 90’s and 2003. This
strategy preserved cash during the bear years while recent commodity prices
have, especially over the past 24 months, added record earnings and
liquidity to the war chest of ‘Majors’. This combined with projected
long-term favorable market conditions, have resulted in management of major
mining companies feeling pressured to act on the mergers front or return
large amounts of capital to shareholders.
Many may have looked to mega-mergers and market consolidation in other
industries where – at least on aggregate – such activities have appeared to
have succeeded. Sure, a large-scale merger will likely deliver cost savings
at the administrative level, however on aggregate, these transactions do not
replace one ounce of the rapidly depleting Reserves. Once the waves of post
merger integration have smoothed, we will see a further increase in the
appetite amongst majors, to earn into junior mining assets that have
projects close to production.
Can you give further information on how the company’s “Black Economic
Empowerment” strategy was developed?
The strategy was developed with Anglo Platinum who initially introduced us
to its Joint Venture and Black Economic Empowerment (BEE) partner on
Ga-Phasha. There was recognition that it would be advantageous for all
parties, if our group would lend its 20+ years experience to a range of very
promising assets identified in the Bushveld Complex (RSA). We had built a
reputation for responsible mineral development, with proven ability to
deliver mutual benefit for shareholders, business partners, employees and
local communities and were seen as an ideal partner to showcase a best
practices approach to BEE initiatives for national and international
recognition. After extensive due diligence on the front including asset
valuation and assessing the political climate for mineral development and
production in RSA, we soon recognized that there was a tremendous
opportunity to establish a dominant strategic position in the country, where
over eighty percent (80%) of the world’s PGMs are produced. The transaction
was closed through a reverse takeover by which Anooraq Resources became the
BEE Company that complies with the legalities of mineral exploration in
South Africa, while delaying a free float of shares attributed to BEE
shareholders, until a date closely linked to the start of production. We are
now recognized as the preferred BEE partner for a wide range of mineral
exploration ventures and anticipate that this will lead to many rewarding
transactions.
Can you describe any particular challenges and benefits in your operations
in South Africa?
As in many other nations and industries, the South African mining industry
has seen the challenges in the face of a devalued US Dollar against
commodity prices and the cost of production. Management of Anooraq Resources
has always been conscious of currency risks and has taken this into careful
consideration when stepping into South African opportunities.
Our prominent projects on the Northern and Eastern Limb of the Bushveld
Complex are located in very close proximity to infrastructure erected by
Anglo. We can leverage this and anticipate low capital expenses when we
bring our assets into production.
Given the existing opportunities currently opening up in China, does the
company have an eye on expanding operations in this direction?
Continental Minerals Corp. had been looking for opportunities in China in
2003 and was presented with an exciting copper–gold–porphyry opportunity 260
kilometers west of Lhasa. The Xietongmen property lies along a four
kilometer long alteration zone. The deposit has been defined by 62 drill
holes (21,000 meters) at 50-meter spacing, extending over an area of
approximately 900 meters by 400 meters and averages approximately 200 meters
thickness. We recently announced a resource estimate of 1.15 billion pounds
of Copper and 2.5 million ounces of Gold in 106 million tonnes of measured
plus 29 million tonnes of inferred mineral resources at a 0.5 CuEQ% cut off.
Everything is heading towards the completion of a bankable feasibility study
and initiation of the permitting process in 2007.
While the Xietongmen property provides a range of excellent additional
target opportunities, Continental is also constantly evaluating additional
opportunities in this region and enjoying the process of expanding its
relationships amongst the local communities and various levels of
government. Continental Minerals is headed up by Gerald Panneton as
President and CEO. Prior to joining Continental earlier this year, Mr.
Panneton was Barrick's Director Advanced Projects and Evaluations for the
Exploration-Corporate Development group. He brings 25 years of mining
exploration and late stage international project management to Continental
and was part of Barrick's worldwide exploration, project valuation and
acquisition group since 1998. He was instrumental in the acquisition of
Pangea Goldfields in July 2000 and played a key role in advancing the
Tulawaka Project through feasibility and environmental assessment and
permitting to now having become a 100,000+ ounce per year gold producer.
|
|
Hunter Dickinson Profile |
|
Hunter Dickinson is a private company whose head office is located in
Vancouver, British Columbia, Canada. They manage publicly traded companies
who are active around the world in all phases of mineral exploration and
development. Their team is composed of industry leaders in the fields of
geoscience, engineering, the environmental sciences, finance and investment,
property acquisition, regulatory and government affairs and community
development. |
|
