High Grade Zinc Production with Huge Exploration Potential
Jochen Staiger: Good day ladies and gentlemen, PDAC day 3 here in Toronto. And now we are at the boost of Pasinex. A company which is producing zinc and we like zinc a lot for the future also. Out of Turkey and with me here is Steven Williams, the president and CEO of the company. Steven, good morning?
Steve Williams: Good morning? It’s great to be here. Nice to hear you smile.
Jochen Staiger: Yeah, thank you and great to have you, you’re here with your boost and your company, Pasinex, give us a shot overview. What’s the company about?
Well, we are zinc in Turkey as you already said and we’re mining. We’ve now got 125 people underground. We’ve got a mine in the south of Turkey called Panagazoo [SP]. And it’s high-grade zinc. It’s called Smithsona [SP] which is Zinc Carbonate and its 35% zinc. So, it’s very high grade.
Jochen Staiger: Thirty-five percent. My goodness!
Steve Williams: Thirty-five percent zinc. We’re mining at about 60 tons per day and that graded door keeping. So, we mine it, we track it down the road to Adana. We’ve got a warehouse there, we crush it and we sell it.
Jochen Staiger: Wow. Fantastic.
Steve Williams: Yeah, it’s fantastic.
Jochen Staiger: I love it. Could we crush it and we sell it. That’s very easy, that’s very straight forward. Can you say a little bit, I mean, you produce, you make cash flow, you want to make money with that? What are your production costs? What can people expect from your company there?
Steve Williams: Yeah. Okay. First of all, I guess, I will answer all these questions but backing up a sec. The reason we’re doing this is because, you know, this has been tough times in the industry. The last couple of years have been very tough, and raising money has been difficult. The big objective is exploration. How we build shareholder value and how, you know, all genius, I think, build shareholder value is exploration and building and going after a bigger resource. In this case, bigger resource is zinc. We think there is a much bigger resource as zinc. But, given that, you know, it’s been difficult to raise equity, given that we have this magnificent hydrate zinc. We just got in a mine because that was a way of us being able to generate some cash to be able pay for the exploration, to look for the bigger picture.
Jochen Staiger: And without dilution.
Steve Williams: And without dilution. We still needed to raise a bit of equity but just a little bit. So, you know, the mine is really important for us because that’s how we’re gonna build the future. So, anyway back to questions. We’re selling the product for around…it’s an oxide, we’re starting to see sulfides but it’s an oxide. We sell the product for around 230-240 US per ton. Are all in mining costs running around 140 US per ton? These are their current numbers as per budget this year.
Jochen Staiger: That’s a nice margin of around 50% something like that.
Steve Williams: That’s a very nice margin, and then we’re taking that cash back to…you know, that’s why I wanted to give you sort of bigger picture in what we’re doing strategically. We didn’t take that cash and we’re putting it back into exploration. We’ve got two drills running at the moment. We’ve got one drill running from surface, and one drill running from underground. But that’s the way we’re doing it. So you know, we’ve got this great deposit where, you know, we’ve got the opportunity to mine. And, you know, taking that money and using it to build the future.
Jochen Staiger: Makes total sense. I totally agree with you. I think it’s the right way to be successful for the future. But the correction is, of course, how long will the high grade last to bring your for up? I mean, it’s just like, you know, like narcotine effect, I would call it. Or is this something you say, “No, I think we can produce at least next two, three years and then we are in good shape through the exploration to go to the, let’s say, lower grade and then we can mine constantly further on.”
Steve Williams: We’ve got at least four years in front of us of high grade.
Jochen Staiger: Fantastic.
Steve Williams: Because, you know, we’ve been drilling and we know it’s there because we’ve found it. And we’ve already got an internal resource and we need to have that internal resource to do that mine planning. We’ve got at least four years in front of us at the moment. I actually think there’s a lot more opportunity, and there will be a lot more to find. But as we stand today given the production we’re making right at the moment, we’ve got at least four years in front of us. So, that’s plenty of time to do a lot more exploration to build that. And I think we will build it. So, yeah, it’s looking good.
Jochen Staiger: Do you have already a resource on the property or something like a resource?
Steve Williams: We do. We haven’t published it. And, you know, I’m not…we’re not about to publish it yet.
Jochen Staiger: Okay.
Steve Williams: But we…internally we do because we need that to do our mine planning.
Jochen Staiger: That’s what I thought.
Steve Williams: Yeah. So we do and…
Jochen Staiger: Okay. So you know exactly what you are doing [crosstalk 00:04:20]
Steve Williams: We’ve already done a lot of drilling…
Jochen Staiger: Money out of the blue.
Steve Williams: No, no, no. we’ve already done a lot of drilling. And we’ve built resource and yeah, we definitely see a lot more in there. So, you know, it’s not something from my head, it’s not an imagination. It’s real.
Jochen Staiger: That was important to me. So, my question would be, now you talked about high grade like 35%. I mean, this couldn’t be the average for the next 10 or 20 years, that’s for sure, yeah. But where do you see then when you already explored a bit, you know a bit in the rock. But where do you see realistically then to move on with, let’s say, more high tonnage mining the grades? Yeah, what can you imagine?
Steve Williams: Yeah, I think it’s gonna be high grades for a while. This is what’s called Covenant Replacement Zinc. And we’re at the top end of the system. And the top end of the system, I think, we’ve got a high-grade system. So, the oxes [SP] is a high grade, but the sulfides we’re already starting to see it in the sulfides, they also seem to be high grade. So, I think, the sort of chimneys in Manta part of this system is gonna be high grade. And this is the bigger opportunity. It’s also possibly associated with what’s called a Scan, which is a scan lead zinc. That will be low grade that will be a lot high tonnage that will be lower grade. And, so that’s what we’re looking for. So, our first objective is to look for more of this high-grade stuff, and we think there is more. But then beyond that as it probably goes deeper, there is an opportunity for a much bigger tonnage, low-grade deposit. So [crosstalk 00:05:56].
Jochen Staiger: …like 3%, 5% zinc or what do you think?
Steve Williams: It’s a bit early to say [inaudible 00:06:00]. You know, maybe it’s gonna be 10 combined or something. But really don’t hold with those numbers. Because at the moment I don’t know.
Jochen Staiger: That’s speculation, I know, that’s speculation. Yeah, only to give our viewers a bit of an idea.
Steve Williams: No, it should be still reasonable grade because it would have to be real…Oh, no.
Jochen Staiger: It’s okay.
Steve Williams: It’d have to be reasonable grade to support the high grade that we’re already seeing, so that’s one thing.
Jochen Staiger: Okay, super, great. You have also some rocks here? Maybe you wanna show it to the camera?
Steve Williams: Yeah, I’d love to. So, there we go. This here is the high-grade exhibit feather. Go a little bit further.
Jochen Staiger: Yeah.
Steve Williams: That’s fine.
Jochen Staiger: Good.
Steve Williams: So this here is the high-grade zinc that we’re mining. And this is the oxide. This is the mineral called Smithsonite which is the zinc carbonate. This is a limestone system so that’s why it’s carbonate. So, this is Smithsonite. This particular rock. This is a very nice rock.
Jochen Staiger: Absolutely. It looks outstanding, absolutely yeah.
Steve Williams: Oh, it’s an outstanding rock. This is 52% zinc right here. And, you know, we’re mining about 35 but you see some of this very, very high-grade specimen type samples.
Jochen Staiger: How much is that?
Steve Williams: That’s about 52 right there.
Jochen Staiger: Fifty-two, wow.
Steve Williams: You’re looking at.
Jochen Staiger: So half of the rock is like zinc?
Steve Williams: Half of the rock is like zinc. Yeah, yeah, yeah, yeah. It’s cool.
Jochen Staiger: Super. That’s pretty cool. Great, great, thank you, fantastic. So, what is the major objective you want to achieve for 2016?
Steve Williams: Yeah. Our objective this year we’re mining at 60 ton per day. And actually, we’d like to look to possibly even further slightly increase production later this year. So, we want to stabilize the 60 ton per day, and look at the opportunity perhaps getting an update 10 per day or something like that later in the year. Which, you know, further increase the cash. Then as I said, the real thing is then to take that cash and to put it in exploration, looking for the bigger opportunity that we think is there.
Jochen Staiger: Super. Perfect, great. Steven that was a super final sentence, thank you for that and very interested in the rock. I will make a close-up of that also. And all the best and yeah, good luck and, I mean, Turkey is a perfect spot to mine. That’s also for sure. And, yeah, soon I’m sure we will soon report some good updates from you.
Steve Williams: Thank you.
Jochen Staiger: Thank you very much. Ladies and gentlemen the boss Steven Williams from Pasinex, the president, and the CEO. And yeah, you heard it, this is a zinc production. Small production but it is production. Profitable production out of Turkey. And the rocks you have seen, it’s like a 52% of zinc. I’ve never seen this in my life before. So, fantastic. They mine out the high grade, by now maybe for the next three, four years, they are quite confident that they can do it. And with that they get the money. Yeah, to get the mine on a higher tonnage for the future prepared. And to mine much, much longer. We will see, we keep you posted. Thanks and bye-bye from Toronto.