Bjorn Junker: Welcome, Steve.

Steve Williams: Hi, Bjorn. How are you doing?

Bjorn Junker: Very good. And I think you’re good, too, because Pasinex has come a long way since we first talked, a couple of years ago when it is now.

Steve Williams: Yes.

Bjorn Junker: Zinc prices have rallied since then, and you were one of the first I can remember talking about it, certainly before the mainstream media. So tell us what does this kind of zinc prices means for the bottom line of Pasinex Resources?

Steve Williams: Oh, wonderful. What to say? Every cent or dollar that the zinc price goes up, it’s just going straight to our bottom line. It’s as simple as that. I mean our costs are in Turkish Lira. Our costs are not depending on the zinc price, so it just depicts our revenue and just goes to the bottom line. It’s a wonderful time right at the moment, and I actually think we still got some upside on the zinc price. So, yeah, it’s really nice.

Bjorn Junker: Well, it’s a good summary. It’s not only the zinc prices that have been rising, also production at Pasinex has been going up. I think last quarter was the sixth in a row that you had higher production.

Steve Williams: Yes.

Bjorn Junker: Are you planning on that continuing? What are your plans for this year and next year?

Steve Williams: Yeah. Well, you know, why has our production going up? Our production went up because we put in a new added over September last year, and so the immediate impact of that added enabling us to pretty much double production. And secondly, this year we’ve been doing a lot of underground development, actually, it’s still ongoing.

Bjorn Junker: Okay.

Steve Williams: It will be sort of doing underground development until November. But this underground development is opening up more mining areas, so enabling us to push the production up. I think that we should see some, you know, positive production numbers in the second half of this year. And so I’m expecting, hoping that we should continue that upward trend. However, it’s not going to…there’s a limit. It’s not so much about our ability to mine, it’s about the resource. We have to mine within, you know, what we see the resource as and not get too in front of ourselves in terms of our resource growth. So, yes, I expect, you know, a little bit of upside in the second half. Then going into 2018, I think we’ll sort of hold up there certainly at this stay. That’s my thinking at the moment.

Bjorn Junker: That’s the planning. Well there’s certainly… and I notice way of having upside for your earnings, which you announced a while back that you are starting to mine sulfide ores, now, which is not only even more high-grade than the what you have been mining before, but can be sold at a higher price, if I understand correctly.

Steve Williams: Yes.

Bjorn Junker: How is that going? How was the percentage of sulfides to oxide ores developing?

Steve Williams: Yeah. We’re currently about, broad numbers about 85% of our production is oxide, and about 15% are sulfide. But that’s up from, you know, you go back a year an a half that was sort of zero. So, you know, the sulfide you quite right. Not only is it a higher grade, but the payable component of zinc in a sulfide is greater than an oxide, so we get a double whammy. So it’s a valuable product. Going forward, a lot of our resource at the moment is still oxide just because, you know, you start high up in the deposit and that’s what you get. You get oxides and you grade down the sulfides. So, going forward, I think the next couple of years that ratio’s gonna be in about where will be maybe 80 20, something like that. But our resource I expect to grow in sulfides, so as we continue to drill I expect that we should add more sulfides. So, you know, you take a longer-term view, you know, three, four, five years then you’ll start to see a significant increase in sulfide production.

Bjorn Junker: Interesting. And you’ve been talking about resource so far, let’s say, I called it an internal resource because you haven’t published any MY43101 compliant numbers yet but you announced you’re working on it. Can you give us an idea when that might come out, and how far along you are with the work?

Steve Williams: We’re very advanced. You know, these are never easy processes, Bjorn, and so, you know, we’re very advanced but there are a few issues that we have to address. So we’re close but not quite at the finish line, but it’s close. It’s certainly imminent. I can’t give you an exact date at the moment, but it’s imminent. Obviously, we’re very conscious that the market is waiting for that independent resource, and we’re pushing hard to get it done.

Bjorn Junker: So, these issues, does that have to do with the nature of your deposit? Certainly, you’ll have to do a lot more drilling if you have one big ore body, right?

Steve Williams: Yeah. Now, this is a… you’re quite right. This is a…It’s not like a porphyry copper which is, you know, a big blob of disseminating copper, I’m being simplistic and the porphyry copper geologists will hate me for that but anyhow, yeah. But it’s a lot more irregular. It pinches and swells, and it’s controlled by the faults. And so, yes, it creates challenges in terms of drilling, and it also creates challenges in terms of when you finally come to do a resource on it. So, yeah, you’re quite right. It is to do with the nature of the mineralogy and the ore.

Bjorn Junker: Okay. Well, but going back, let’s talk about something you announced in or said in a release in August, I think, that you’ve been stockpiling 6,000 tons of ore for big lump sum delivery.

Steve Williams: Yeah.

Bjorn Junker: Did you do that transaction yet? And if not, how big it’s going to be?

Steve Williams: It’s not quite completed yet. It’s actually going to be a 10,000-ton sale, Bjorn. And the reason, 10,000 tons is that’s the size of the boat. It’s a bigger boat but it’s a boat. And so it’s still not quite completed, and so we’re working on it. But meantime, you know, there has been a lot of other sales, obviously, going on. Basically, the boat is all about on the Mediterranean, then going into Europe. So when we sail into Europe with something through boat for shipping, whereas we’re also sailing into Iran. A lot of the oxide will go to Iran and that’s going to be by truck and train. So those tend to be, you know, hundreds of tons, up to thousands of tons, lots on the truck or train. So there are a lot more frequent sales, whereas the boat is a lot more lumpy if you like.

Bjorn Junker: Well, okay. Understandable if you explain it like that. We’ll have to go back to the drilling. You’ve said… we talked about the resource, obviously, a lot of the drilling has gone into defining that. But I think drills should be turning in Turkey also for exploration. Can you give us an update on that because I haven’t read anything?

Steve Williams: Yeah. No, we are due for getting a news release out to the market and I’m conscious of that. There’s been a couple of issues. The first single biggest issue has been finding our resources, that is people I’m talking about here, and there’s no question… we’ve been very focused in the last three months on the 43101 and, you know, that’s been an all in effort it, then it taken some of our people and resources. Meantime the drills have continued.

The second issue we’ve had a little bit of a delay for about six weeks in our drilling. A lot of our drilling is from underground particularly with the sulfides, you know, we’re drilling to go to look for the sulfides as they go deeper. So the way we have to look for that or drill for that is from underground. I mentioned a bit earlier that we’ve been doing a lot of underground this year, but a lot of that has been in the wrong area for drilling. It’s been to open up resource into the northern and higher up section of deposit for future mining. So that’s where we’ve been doing underground development. We’ve done a lot there, we’re still doing it, which is being good for future mining. It enables us to have access to all this ore for mining over the next couple of years, but it was in the wrong direction for drilling.

Bjorn Junker: Okay.

Steve Williams: The development going down deeper to give us access for the deeper sulfide. So we had to wait, you know, again it’s resources just how many people and equipment you can employ with this underground development. So we’ve had to wait a bit. We’re back at it now and we’ve got it now a significant new drill pad at depth that, as I said, we did have to wait for it. So it was a bit of a, just need a couple of, you know, just operational issues beyond that, of course, there are some delays in the last few months.

Bjorn Junker: Okay, very interesting. So I guess we’ll be hearing from you quite a lot about the… among the coming weeks and months.

Steve Williams: Yes.

Bjorn Junker: Let’s see if there’s been progress on one or the other front when we meet again in Munich. Thank you.

Steve Williams: Yeah. Thanks, Bjorn.