Amur Minerals Corporation (LON:AMC ) Chief Executive Officer Robin Young caught up with DirectorsTalk for an exclusive interview to discuss the signing of an agreement with Far East and Baikal Region Development Fund
Q1: AMC have announced this week the signing of an agreement with Far East and Baikal Region Development Fund, could you tell us more about who and what they are?
A1: They’re actually a Russian sovereign agency which was formed under the direction of Vladimir Putin with the specific intent of developing the Russian Far East. This group, obviously named after the Far East and the Baikal region, has a responsibility for developing a lot of the infrastructure within the area, one of the projects that they have is the expansion and renovation of the local airport here in Khabarovsk. The real key development targets are road and power, these are two key elements to the development of our project itself. They are used to funding large-scale projects and in particular, ours located in the Amur Oblast is one of the ones we’ve had discussions with about providing intensive support in the future. At this point of time what we’re working with is the development of them participating as a cornerstone for funding the projects and identifying value for the company and also funds to be used in the development of the project itself, in particular the Chinese agencies.
Q2: Looking at your website events page, this is not the first time that the group has been mentioned, there were previous meetings in Blagoveshchensk, the capital of Amur. You seemed to have moved very quickly to obtain this milestone agreement.
Q2: We’ve actually been speaking to them for a while now and we were invited to participate in Blagoveshchensk in particular to present the project and the milestones that we have obtained ourselves in exploration, resources, reserves, the technical development of the project such as the building of a mill, the open pit, underground mines and possibility of construction of smelter itself. This was a good form where we’re able to speak to many of the local governmental agencies including the presence of the governor himself, Mr Kozlov. So we have been working on this and we’ve developed a blueprint which provides a new platform for economic development of Amur Oblast itself, there’s a lot of incentives to improve the project economics as well and the local government, the Amur Oblast government is responsible for negotiating things like taxation, royalties, export rights etc. So that opportunity was a win-win situation for both sides to develop a firmer, better understanding where we going to take a look at employing up to about a thousand people in high quality jobs.
Q3: Now you’re going to attend the East Russian Economic Forum in Vladivostok, will you have an active role there or will you be attending the conference to gather additional information on the potential of the Far East?
A3: We’re going to take a role where we’re actually participating on both sides there. We are going to be active participants, we have been asked to do specific presentations in various forms at the summit itself. Though it’s not finalised at this time, it’s pretty reasonable to believe that there’ll be a variety of attendees there in particular President Putin, Mr Medvedev and a gentlemen named Mr Trutnev, who is responsible for the development of the Far East, are going to be present at many of the meetings as well and in addition to attendee, we’re looking at large banking consortiums, engineering companies, service providers and other mining companies that will be attending from China and Japan and South Korea as well as the other Asian countries. So we anticipate that we’re going to get a good highlighted presentation at the Far East and we’ll be able to illustrate to these companies from various countries that you can work successfully within Russia and that you can look forward to protection of your investments.
Q4: Now you’ve mentioned China, are you actively seeking participation from any specific organisations in China?
A4: We have two objectives at the Forum, one is to broaden our exposure of the company into the Asian markets. We’ve already spent time working there in the past, we’ve talked to various banking institutions and smelting companies even so we have a pretty good understanding of the area. This is a much broader forum so we’re going to have the ability to contact companies such as equipment providers, people who can fabricate ball mills, sag mills, things like this that are going to be needed components of the operation so this is going to provide us with the ability to source and identify people who can support the operation itself. As far specific organisations, we never really elaborate specifically because there could be inside discussions and we make a point of never discussing those at all, that would be imprudent on our part especially if there’s anything price sensitive.
Q5: What should the DirectorsTalk audience take away from this discussion?
A5: This agreement really is forming the cornerstone and the focus for the development of the company itself and becoming a part of the Far East development plan. By doing this, what we do is we’re going to be able to have to fund a project where the capital cost is in excess of $1 billion, these types of projects really do require a broader reach where you would include a consortium of financial institutions or entities to fund such a project. The Far East project itself shows everyone that we have the backing of the Russian government and we have access to additional capital markets within Russia, China and India which is also providing further strength and underpinning of our existing UK and European markets. So it provides us with a much broader basis andgives us the ability to continue the development project in numerous areas such as technical support, engineering studies, road design capacities, power lines such as that so we really have a point now where this is another key cornerstone and we believe that building good solid cornerstones only leads to a long and permanent structure that will follow on.
