FinnAust Mining Plc (LON:FAM) Managing Director Rod McIllree caught up with DirectorsTalk for an exclusive interview to discuss the three primary targets identified at Pituffik Titanium Project and what investors should be looking out for in 2016
Q1: Some exciting news out this morning with the identification of three primary targets for titanium. Rod, what can you tell me about this?
A1: The release this morning was really just I guess a bit of a recap on the work that was done during 2015. One of the issues that I saw with the general understanding from investors’ prospective was that the General Meeting to conclude the transaction was late last year, there wasn’t necessarily very much detailed technical information as to the work programmes that had been conducted in any of that material so we just felt that it was pretty important to start the year off on the right foot and make sure that investors knew what type of news flow they can be expecting and there’s a little bit more technical depth into this project.
Q2: You mention three project areas of significant titanium accumulations, can you elaborate a little on each?
A2: The three that we mentioned there are more the sort of the environmental areas that house these deposits. So we’ve got the ‘raised beach’ which is the old beach level, if you like, and that’s quite extensive, it’s a big plain that sits at the base of quite a substantial scarp, it runs for many kilometres, as you can see from the diagram in the announcement of the raised beach. You’ve got the ‘active beach’ and this is sort of the tidal zone plus or minus 5% 15 metres either side of the mid-tidal line, this is an area that is extremely high grade and it is active, as the name suggests then obviously you’ve got the marine side of things. Now, within each one of those environments we have our project areas, if that makes sense, so the ‘raised beach’ environment has interlock which is through the east, it’s a very substantial occurrence of sediment and the Moriusaq is also part of the ‘raised beach’ project area. We haven’t necessarily broken the marine environment down in the project areas yet because we’re still getting a handle on the discoveries that have been made there during 2015 so it’s three environmental areas, all within little project areas that are contained in those three projects.
Q3: Are there any other pure titanium producers elsewhere that investors can look towards for any type of peer comparison?
A3: Yes, it’s an interesting marketplace. I guess many investors will be aware that ilmenite is a product of heavy mineral sands production, there are many mineral sands projects that are in production, underway, in development in the world but from what we can tell, in our market research, this is the first pure ilmenite, heavy minerals sand project that we’ve been able to identify. The other interesting thing with FinnAust particular ilmenite is because it is primary ilmenite i.e. it hasn’t actually gone through any type of chemical alteration erosion-type effect, the impurities in this are extremely low and that really is what sets this particular titanium project, because that’s what this is, this is actually a titanium deposit as opposed to a generic heavy mineral sands project which is the sort of leucoxene’s, zirconium’s, your ilmenite’s, rutile’s, magnetite’s etc. so this is the only one of this kind that we’ve been able to identify so that’s fairly positive, a pretty nice looking titanium prospect at the moment.
Q4: Do you think we’ll have offtakes and bulk samples by the end of the year?
A4: It’s something that were very focussed on, our complete objective is to get this into production as soon as possible because once we’ve got that then we can do other more substantial things in line with some of our acquisitions that have been completed and will continue to be completed throughout 2016. So a big part of that with this type of project is having offtakes, we are in discussions with two groups at the moment, it’s early stage Giles but these things appear to be potentially be able to move quite quickly and again, it comes back to our purity, the lack of impurities in this particular ilmenite means that it is excellent feedstock as the base competent for these smelters that are pulling in variable impure ilmenite’s from all over the world. So having a pure source is actually something that is very sought-after so this has been very encouraging for us to get that so we think that’s achievable, the quantities I guess will be the variable that we need to determine at the moment but certainly by the end of the year we will have offtakes in place that will enable us to attempt to fulfil those in 2017, that’s very much the strategy and the focus of the group.
Q5: Now it is moving pretty quick, what are the key bits of information or news that investors can expect to come from the successful implementation of this process?
A5: I think this again comes back to this reason that we really wanted to get the project update out early in the year. There is an enormous amount of technical and chemical results of these various work programmes; the boomer surveys, that sort of marine seismic, if you like, to test the sea floor, they’re starting to roll through the chemical analysis of all the ilmenite’s of the project area of the ‘raised beach’ areas, will all come in as well. We’ve got the concentration processing metallurgical work being done by the Danish Geological Survey so we’ve got an enormous amount of things that are ongoing and active. I think that we’ll see all of these things feed into the news flow over the next 3-6 months, I mean there’s some pretty good stuff coming I would imagine, having sort of been to site and seeing what this is all about. I think there’s reason to maintain FinnAust Mining on your watch list at the very least if you’re after news flow of something of interest.
Q6: You mentioned the FinnAust Mining Plc shareholding structure as being important, can you tell investors why this matters?
A6: We’ve sort of being working on various companies and various projects throughout the world for many years now and one of the key common themes that we’ve noticed in these types of exercises is the shareholder base. If you’ve got a very supportive, understanding shareholder group that has the same time horizon limits as you, so that 3-5 year mark, if you can consolidate the vast majority of your shares into those sorts of groups that share your strategy, understand the way you operate, have worked with you before and are prepared to hold for the long-term, what this means, in the case of FinnAust Mining Plc, is that we’re sort of around about that 92% of the shares held by sort of 15 unrelated parties, whether it be large UK institutional investors, Western Areas in there, and several high net-worth individual holders as well. So what we have is a very tight share registry that is responsive to positive as well as negative news but certainly is able to move freely up and down so we see that as a huge positive for us.
