Joachim Brunner: Steve, thank you for your time. I said in my German introduction: First, you’re coming up with really great results, and second is, for me…the first is I have a conflict of interest. I’ve been a shareholder of the company and I’m a proud shareholder of the company.

Steve Williams: Yeah, I know you were a shareholder.

Joachim Brunner: And, I must say, my best explanation is, you’re a production company but with your market cap of an exploration company.

Steve Williams: Yes.

Joachim Brunner: But first, please start and tell a little bit more about the first quarter results.

Steve Williams: Yeah, we had a nice profit the first quarter. Our revenues were Canadian $5.8 million. This is the joint venture company, the operating company and 50% margin, so, pretax margin. So, it was very nice.

Joachim Brunner: And the reason also why you have so high margin, and this is…but I must always say in the interview is really unusual: Your ore is so high grade, almost 30%, that you can [inaudible 00:01:38]. And this is really unusual in the industry.

Steve Williams: It’s very unusual. It’s 32% zinc. So, yeah, we mine it, we crush it, we sell it. And that’s great. You know, goes back to one of the old things in mining where the grade is king and if you’ve got a high grade and you can sell it direct, you should. And that’s what we are doing. And that’s actually, you know, why we can have such good profitability. We did a lot of mine development last year and now we’re benefiting from that.

Joachim Brunner: This quarter, first quarter, you make one cent profit per share. So, but also you are saying in the press releases that you will increase the production over the next quarter. So, how this come? From the development last year or…

Steve Williams: Yeah, we put in this third [inaudible 00:02:26], a bigger [inaudible 00:02:27] August, September, last year and we’re starting to see the benefits of that. We achieved, on average, 140 tons per day of direct shipping ore in the first quarter and we’re continuing to do mine development underground. We got probably five kilometers of underground development already and we are still doing more. So, I expect that we’ll see some further upside on that. So, you know, the first quarter was very strong and I think that we can have some more strong periods coming up.

Joachim Brunner: One of the downsides, or negative side, was…everybody talks about it. Yes, you’re production company but you don’t have the resource on it. But, in one of the last press releases, you’re coming up that you’re working on this. So, what we can expect?

Steve Williams: Yeah, so we appointed an independent group called CSA Global about a month ago. And they’re going to be coming in and doing an independent 43101 resource. Probably August, we should be releasing that information to the market. Internally, we’ve had a resource for quite some time, because, when you’re building a mine like this, you’ve got to do mine planning. So, you have to know where you have resources. We’ve done a lot of drilling. So, what CSA Global are doing now is they’re taking what we got and they’re critiquing it and then once they’ve critiqued it, then they’ll put it out and it will be officially independent. But we’ve had it internally for a while.

Joachim Brunner: Can you guess how long the mine life, it will be around? Mining is nice and revenue is nice and profit is nice, but when you can only mine for one year, then it’s not so nice. So…

Steve Williams: We have several years in front of us…

Joachim Brunner: Several….

Steve Williams: …as we stand at the moment. That will come out in the reports, but we have…

Joachim Brunner: Yes, but you cannot say something. It’s important if you can say, “Okay, it’s only for a few quarters or is it for a few years?”

Steve Williams: No, it’s several years. We are high up in this deposit. We’re still in the oxides, just coming into the sulfites and……

Joachim Brunner: Are the grades changing in the sulfites?

Steve Williams: Yes, the grades go higher in the sulfites. They go to 48%/50% zinc. So it gets even higher, so it’s fantastic. But these systems…it’s what’s called chimneys and mantles. They can run kilometers. So we’re only down about 250 meters. So, I think there’s a lot more here to be discovered. So, the point here is, we have to keep drilling and keep, you know, growing our resource. So, what’s important for us is to have enough years in front of us, and that’s the current situation, enough years in front of us so that we can keep doing more exploration so that we can continue to grow bigger. And, you know, that’s the way we’re trying to manage it if you understand what I’m trying to say.

Joachim Brunner: I must come back to the quarterly results. And when I read the press release, one question comes to my mind. The money, what you make, stays in the Turkey subsidiary or is it in…bring the money out of the country to your Canadian operation?

Steve Williams: Okay, there’s a number of things to say. First of all, you know, we built this mine over the last three years basically. We recognize very quickly where they had a high-grade deposit that we could do direct shipping. And, you know, it’s been tough times. We’re starting to come out of the tough times, but given that it was tough times, what we decided to do was build the mine. So, up to now, all the money has gone back into the mine, into drilling, into mine development, all that five kilometers that I told you about. Also, we have started to buy some equipment. So it’s all gone back into the mine. This year, because we’ve stepped up the production significantly now, we’re going to actually have cash beyond our…

Joachim Brunner: The development plan.

Steve Williams: …development plans and drilling and all that. It will take later in the year to start to really realize that job, but we will have. That’s what I would expect. At a certain point, you know, we would like that we have that money coming out to the two shareholders. And what will we do with that money? Initially, it will stay in Turkey. There is no question. Probably, you know, the big picture here: This is a wonderful deposit that we’ve got. And there’s no reason to think this is an isolated deposit. Quite the opposite. Nature doesn’t put these things like a little-isolated thing just here. They will be more zinc to be found. So, what we’d like to do is to step up our expiration, not just at the mine, but nearby. We’d like to step up that expiration. So, I think that’s probably… We haven’t made that decision yet, but that’s certainly a priority in terms of where we’d like to spend more money, looking for the next thing…

Joachim Brunner: So, that means, also to summarize a little bit, you keep the money into Turkey, storage also then for the next exploration phase, not only concentrated on these mines but look for other mines. Then normally is that they are in clusters and not only isolated on one thing.

Steve Williams: Yes, that’s correct.

Joachim Brunner: So, okay, in summarize, in general, is first quarter was great, but you see further development in next few quarters. So, the production should go up. It means also the profits should go up if zinc stays on the same price level what it is now. And that means for us, the shareholder, you make more money per share and that should bring the share price higher.

Steve Williams: Yes. And the other thing here…yes, everything you said was correct. The other thing here is that zinc price…you know, I actually think that there’s still more upside on the zinc price. You know, this year, we run up a lot. Last year, we went from 65 cents to nearly $1.30, $1.20. This year, it sort of bounced.

Joachim Brunner: Consolidation a little bit?

Steve Williams: Yeah, maybe we run up a bit too high last year. But, if you look at the fundamentals, zinc stocks in the world are still going down and down. And, you know, we’re…

Joachim Brunner: Some mines running out of the ore the last few years, so it is…

Steve Williams: And we are selling zinc. And I can tell you, that we get a lot of people trying to buy our zinc off us. So, I actually think, probably second half this year, I think there’s still upside on the zinc price and…

Joachim Brunner: They should good for our profits and that’s mean…

Steve Williams: It’s even better there.

Joachim Brunner: Even better. Steve, thank you for your update. It was a great one. Thank you.

Steve Williams: Thanks, Joe.