FinnAust Mining plc LON:FAM, the AIM and FSE listed exploration company with projects in Greenland, Finland and Austria, has given DirectorsTalk its interim results for the six months ended 31 December 2015.
Chairman’s Statement
In my inaugural statement as Chairman of the Company I am delighted to report on what has been a transformational period for FinnAust with the acquisition of the Pituffik Titanium Project in Greenland. The Project hosts a titanium occurrence, which displays characteristics suggestive of a top percentile project in terms of grade.
Greenland is highly prospective, has a supportive government, transparent Minerals Act and a firm rule of law combined with a perceived low sovereign risk. We are excited by the fact we have acquired what appears to be globally significant titanium project and we expect to increase the Company’s footprint in Greenland over the coming years.
Pittufik is located within the broader “Thule black sand province” in North West Greenland, comprising coastlines several hundred kilometres long that contain both ilmenite and magnetite-rich regions. Within these regions are localised higher concentrations of ilmenite, and it is these areas that FinnAust is targeting.
Based on work to date, the Company will focus its attention on three primary target types along more than 30km of prospective coastline. These target areas are broken down into Raised, Active, and Drowned beach targets. The Company has identified two key project areas for focus moving forward, Moriusaq and Interlak. Moriusaq is most advanced and has returned the highest ilmenite grades to date, whilst Interlak offers the largest volume of heavy mineral sands with grade upside potential.
We expect to shortly receive the results from the broad spaced, shallow marine sampling program and we remain optimistic as to the potential of the Project with initial results to date suggesting significant areas of mineralisation within the licence area. To support the development of this target we are also now working on extending the coastal boundary of the Pituffik Exploration Permit, as it currently covers onshore ground only. We are working with the Mineral Licence and Safety Authority in Greenland to this effect and expect to receive the extension to the Pituffik Exploration Permit around the middle of the year. In the meantime, the permit extension process is not expected to have any effect on the Company’s ability to continue with its work programs, including off-shore work.
Looking ahead, whilst development plans remain subject to the aforementioned results, FinnAust continues to aim for a proof of concept “bulk sample” during 2017 which is in line with the Board’s stated strategy of generating cash flow from Pituffik in as timely a manner as possible.
It is expected that the Moriusaq bay area will advance first, as there are a number of logistical and infrastructure benefits to support this approach such as existing power, communications and accommodation that will greatly assist in this initial development scenario.
To support its development strategy the Company has appointed a number of consultants post-period end in February and March 2016. SRK Exploration Services Limited (‘SRK’) has been appointed to review and standardise exploration activities, TZ Minerals International Pty Ltd (‘TZMI’), a recognised leader in the provision of accurate and up to date technical, engineering and marketing support within the mineral sand industry, will also provide technical support on marketing, and independent expert Peter Waugh will assist the team in the overall management of the Pituffik development. Peter is a very welcome addition to the team and has broad industry management experience as well as valuable knowledge of the international titanium dioxide pigment industry.
Finally NIRAS Greenland A/S and Orbicon A/S will assume critical support roles for the completion of permitting and associated regulatory requirements. Importantly, both companies are Danish and have proven operating experience in Greenland and lastly but certainly not least is the involvement of the Geological Survey of Denmark and Greenland (‘GEUS’) whom have been commissioned to design and execute the 2016 field season alongside FinnAust personnel. Utilising a Danish institution such as GEUS means we get high quality deliverables for low cost, GEUS is considered crucial to the Company’s development plans moving forward.
With a choice of two major port and logistics hubs both within a 5-minute helicopter ride the core operating area of Moriusaq also happens to be located at what is considered to be the highest grade area of the Company’s licence area.
Wider Portfolio
Whilst Greenland is the primary focus of activity for FinnAust, the Company has a wider portfolio of prospective assets in Finland and Austria.
In Finland, the Company owns 100% of a portfolio of copper, zinc and nickel projects; the Hammaslahti Copper-Gold-Zinc Project, the Outokumpu Copper Project and the Kelkka Nickel Project.
Post period end in January 2016 FinnAust increased its licence coverage across these project areas by approximately 50%. The Company continues to see value in these project areas however will minimise expenditure until markets improve.
Corporate Updates
On 11 March 2016, Dan Lougher retired from the board as a Non-Executive Director having stepped down as Chairman on 9 December 2015. The Board would like to extend its thanks to Dan for the significant contribution he made during his time with the Company.
On 9 December 2015, I took the helm as Chairman of the Board and also welcomed Rod McIllree to the Board as Managing Director, Rod was initially appointed as the non-board interim Chief Executive Officer in July 2015. Rod has strong corporate and operational experience in Greenland and more than 20 years of experience working globally in both the resources and financial sectors. These skills will be invaluable as we focus on advancing Pituffik and our broader project portfolio.
With these corporate changes complete I am confident that we have the necessary team in place to achieve the fast-paced growth we are targeting.
Supporting our active growth strategy is ASX major Western Areas Limited, a cornerstone investor of FinnAust. FinnAust not only benefits from access to potential funding opportunities through this arrangement but also gains the experience of a proven management and technical team; Western Areas is one of Australia’s leading nickel producers having advanced from greenfield exploration to a highly successful high grade nickel miner.
Finally, complementing our increased presence in Europe, we dual listed on the Frankfurt Stock Exchange post period end in February 2016, making the Company’s shares more accessible to European investors following significant demand. These shares have been admitted to trading under the symbol ‘S5WA’, and will trade alongside our current AIM listing (under the symbol FAM).
Financials
As is to be expected with an exploration company, for the 6 month period ended 31 December 2015, the Company is reporting a pre-tax loss of £239,335 (six months ended 31 December 2014: £375,609). The Group’s net cash balances as at 31 December 2015 were £334,661 (six months ended 31 December 2014: £1,806,785). The Group’s cash position currently stands at £1.04 million.
Outlook
2016 is set to be an extremely active and exciting year for FinnAust. With our sights firmly set on achieving near term production at Pituffik our focus is on further defining the resource potential of the Project area. To this end we have already made excellent progress; three prospective target areas have been identified, including an unusually pure titanium occurrence, which demonstrates its potential to be in the top percentile of projects worldwide in terms of heavy mineral grade.
The new incoming management of FinnAust, in particular Rod McIllree, have operated successfully within Greenland for most of the past decade and I am confident that their proven skills and experience combined with a supportive Government, proximal infrastructure and targeted growth strategy ideally positions Pituffik for production.
The strategy of the Board is to generate cash flow from Pituffik to create a company that is capable of eventually self-funding exploration and development opportunities that it currently owns as well as continuing to evaluate other complementary opportunities. We look forward to keeping shareholders updated with developments relating to this.
Finally, I would like to thank shareholders for their on-going support. We remain committed to maintaining an active dialogue with the market and look forward to 2016 as we advance Pituffik.
Graham Marshall
Chairman
