Exclusive Interview Pasinex Resources, May 2014
Bill: Hello, everybody. We’re talking to Steve Williams from Pasinex Resources today. Pasinex is exploring for zinc and copper in Turkey. Hi, Steve.
Steve: Hi, everyone.
Bill: Let’s get right to it. You had some very good news recently. End of April you received drill permits for your zinc lab projects in Turkey. I understand there was a big hold up. Can you tell us about that and how that got resolved?
Steve: Yeah, there was definitely a big hold. I think we ended up waiting, I don’t know, about 15 months for drill permits. It was an industry wide problem imposed by the government. Well, the government, basically, froze a whole heap of different types of licenses for exploration for minerals in Turkey. The roots of this go back to, well, actually, to around 2010. The government wants to see its pro-business, pro-mining development. And they wanna see mining development in Turkey because they see that as part of their overall strategy to build the economy, the Turkish economy.
And then in 2010, they changed the regulations and, basically, opened up the whole process by which companies could get exploration licenses in Turkey. And I think they were surprised by, you know, how successful that was. There was a lot of companies came in, there were a lot of licenses taken and yeah, a lot of activity coming out of that opening up in 2010. And yeah, I think the government, like a lot of the governments, looked at this and said, “Okay, that’s good but you know, we also want to be sure that we, the government and I guess the Turkish people get their fair share of that activity and that benefit.
And so they, like a lot of countries, went through a process of reviewing regulations relating to mineral exploration and the whole permitting process relating to mineral exploration. And while still doing that review that’s when they froze the whole process. That’s when they froze all the permits and the exploration process and that was the 15-month wait. The reason they froze it is they wanted to make changes and they wanted to affect those changes without having, if you like, the horse bolted.
They have now, we understand, completed that review process, although it hasn’t been finalized in terms of regulatory changes. We understand that they will be bringing through, you know, some higher prices, some higher fees for some of these permits and things like that. But what happened is, you know, the 15 months frustrated the industry. The whole industry got more and more with you know, you can wait for some of these things, but it went on and on and on and on and the industry got quite frustrated and started to mount pressure on the government to release the permits. So, that’s what they did. Obviously, they were getting towards the end of their review process and with the mounting pressure from the industry, they suddenly released the permits. And that was March-April and that enabled us to get back to business, which was great.
Bill: Okay so that is what you’re going to do now, right? The plan is to use the results of some surveys with the ground penetrating radar you did and then just start drilling. Can you tell us a bit what you wanna achieve with this and when you wanna start?
Steve: Yeah. Absolutely. We’ve been doing ground penetrating radar at our zinc projects in Horzum and we’re close to finishing, very close to finishing. What the ground penetrating radar does, it identifies structures within the rock. The zinc tends to be held in cave structures within the limestone rock. And so what we’re looking at with the ground penetrating radar, it’s pretty amazing technology, but what we’re looking at is trying to identify these cave structures in the rocks. And by identifying these cave structures in the rocks, they will be the targets that we will drill for.
Some of these cave structures as I said will contain zinc. Some will not, but some definitely will. But what we do know is that that’s where we should be drilling rather than, if you like, sorta semi blind just drilling in the rock. What we drill at is these structures. So, we’ve been doing that work, we’ve nearly finished and basically, now with the permits in hand we can go from having identified the drill targets to drilling and that’s what we intend to do. We intend to follow very quickly on from this ground penetrating radar to starting drilling on our zinc projects. And I think we should be doing that in a very short time.
Bill: Okay, but you’re not working these problems…projects alone. You’re I guess 50/50 joint venture with the Turkish company. Can you tell us a bit about them and how they might help with the work you’re planning to do now?
Steve: Yeah. That’s correct, Horzum project Pinargozu in Akkaya is a joint venture. It’s a joint venture with a Turkish mining company called Akmetal. Maybe just to tell you a little bit about Akmetal. Akmetal is a long-term, well-established Turkish mining company. Something like around 1,200 employees, I’m not sure the exact number but thereabout. They’ve got three mines in Turkey. They’ve got a chromite mine, they’ve got a base metal mine and they’ve got a gold mine. So, you know, a well-established company. And they’re owned by a larger Turkish family conglomerate called the Kurmel Group.
So, again, a well-established, well-known Turkish family business. And what they bring to the joint venture is the wherewithal there…They’ve been in Turkey, they’re well-established, they know how to get things done. The way the joint venture works is we do the technical management, we do the geology, we lead the exploration. And Akmetal, they bring all the wherewithal, as I said. So, in the case of drilling, you know, we’re very fortunate that they actually have their own drilling equipment. So, we expect to be using some of their drilling equipment to drill on these targets. So, we will identify the targets and that’s the work we’ve been doing with the ground-penetrating radar. Then they bring in the drilling equipment and the team to do the drilling and get at it. So, that’s actually why we can get things done fast and also cost effectively.
Bill: Okay. That’s quite an advantage. Let’s step back a bit. We’ve been talking about the zinc project, perhaps some listeners don’t know what we’re talking about really here so give us a short rundown of your project in Turkey, please.
Steve: Yeah. Okay, we’re rooted in two things. We’re rooted in base metals and we’re rooted in Turkey. In base metals, we’re in zinc. In the projects we’ve just been talking about Pinargozu in Akkaya in the province of Adana in the south of Turkey and we’re into copper in a project called Golcuk, which is in the northeastern province of Ceviche in Turkey. Zinc is a metal that, I think, has a great upside on its zinc price in the next couple of years, the next two to four years. There’s a lot of short-term supplies shortage. There’s a number of mines, significant mines have either closed or about to close in the next few years. So, I think, you know, zinc we’re gonna see some good upside on the zinc price. And so that’s why we really think that zinc is our priority at the moment and that’s why we’re really pushing ahead with our Horzum projects.
Copper? We have a copper project called Golcuk and copper is Dr. Copper it’s the third most consumed metal in the world. It’s very much tied to world economic well being, world economic growth. It’s pervasive in its use. It’s in buildings and cars and electronics and houses and everything that we do. So, I mean, I really believe that copper has a great future. Because I do believe in overall world economic growth. So, that’s why we’re rooted in copper. So, I think we have a good portfolio. Zinc is a metal that has a bright future in the next few years in terms of price. And copper is a long term stalwart of economic growth.
Bill: We’re talking about mines closing. They’re closing because they are running out of reserves. That’s what else that’s happening.
Steve: Yes. Yeah, there’s a number of mines, Bathurst mine in New Brunswick, Canada closed last year. That’s a mine that dates back from the 60s. And it’s just run out of resource and that’s why it’s closed. Coming up, Lisheen in Ireland, Century in Australia, Skorpion in Namibia are all mines and I’ve missed a couple. But they’re the old big mines that are expected to close in the next two to four years, as I said. And that’s, yeah, they’re big mines and that’s a significant supply side shortage on zinc. And that’s what will drive the zinc price.
Bill: Okay. One last question, all this costs money. You raised some money recently, but probably not enough to finance all these, all the drilling that you want to do this year. So, can you tell us, will you have to go to the market or how do you think you have to finance your work?
Steve: Yes, we just raised just about 500,000 gross, March-April, just now, recently announced. And you’re quite right, we do need to continue to go back to the market. You know, the reality has been for us and for companies like us that the last, last year was a tough year. It was a tough year in the markets. Share prices were down, it was tough raising money. But what we’ve done is…And this sort of reflects the way I think you should do it, is focused on the basics. Money is tough, but continue to work on your assets. Keep pushing ahead, doing things like ground penetrating radar and then doing some drilling now that we can do some drilling. Just keep pushing ahead, developing your assets and this I believe will reflect ultimately in the share price.
I do believe that the markets will start to turn around and I think we’re starting to see some little green shoots. It’s a bit early at the moment but I think we are starting to see some little green shoots. And as long as you’re focused on the basics as long as you’re focused on your assets. You position yourself that as the markets turn around you get some strengthening in your price and then you can raise more money. And so that’s what we’ve been doing, that’s what we’ll need to continue to do. I do need to raise more money this year to continue to do the drilling but I think we can have success. And I think we’re very focused on trying to maximize the value of the money that we’ve put into the ground and on the back of that we’ll continue to raise money.
Bill: Okay. Thank you, Steve.
Steve: Thanks, Bill.