FinnAust Mining Plc (LON:FAM) Managing Director Roderick McIllree caught up with DirectorsTalk for an exclusive interview to discuss his new position as MD, the Bluejay Mining Limited acquisition and growth strategy
Q1: Firstly, congratulations on your new position as Managing Director. You were appointed interim CEO in July this year, did you twist the Board’s arm or were they impressed with your work this year?
A1: It’s a relationship that’s actually many years in the making, I’ve worked and been taught by several people from Western Areas which is the largest shareholder of FinnAust back in my university days, I have also been well-known to the existing Board. So it comes as no surprise but we’ve been working hard on making sure that the FinnAust opportunity is fit for purpose for the current market situation and that’s what led to the appointment as a Managing Director is really the successful implementation of that strategy.
Q2: Now, as you mentioned you’ve been working in both the finance and resources sector for over 20 years and you’re also on the Board of a few companies including one called Bluejay Mining Limited. What can you tell me about Bluejay?
A2: Bluejay was a private company that actually we set up round about 18 months ago to take advantage of some opportunities that were becoming available in Greenland. It is the owner of Pituffik titanium project located in North-West Greenland and that is the subject of the FinnAust merger with Bluejay that was announced to the market today.
Q3: Indeed, some excellent news there, the acquisition of a 60% interest in Bluejay Mining and an option to acquire the remaining 40%. Can you talk me through the reasoning behind the acquisition?
A3: The project itself sits within the sort of the strategy that FinnAust identified through the market, it’s a very high grade and high value commodity. It is what appears to be quite substantial in its extent and it’s actually been the subject of many decades, having first been discovered in 1915 by the Danish Geological Survey, and has been subject to many campaigns of work and technical investment but it’s really just the last 15 years that has seen the project open up to potential exploitation really is a function of climate change being witnessed in that part of the world.
Q4: What will you be looking for when deciding if you should acquire the remaining 40%?
A4: Well there’s a couple of trigger there but essentially FinnAust has the perpetual rights to acquire the balance of the 40% should certain criteria be met by the project and also the licencing of that project. So at the moment we don’t own the off-shore licence, that is a negotiation that we will open with the Greenlandic regulators in the coming months, we don’t see that as being particularly difficult to achieve, it’s just a function of engagement with the licencing regulators. That is the key trigger point I guess that should that off-shore area come into the licencing arrangement that will expand the known occurrence of this sediment by orders of magnitude and that will facilitate the acquisition of the balance of the 40%.
Q5: How soon before Bluejay can meet the goal of generating a cash flow?
A5: It’s a tricky one and it’s probably something that we would ideally comment on at this time but I think what we’re looking at here is a fairly simple process of exploitation and there’s a couple of unique factors that come with this project. Firstly, it is a singular occurrence of metal in sands so it’s an ilmenite-based sand that makes the concentration if you like of that particular element far simpler and far cheaper. I think next year the work programmes will involve taking bulk samples and getting those concentrates off to potential end-users, I think that is the critical part in terms of its development but conversations are already underway with a number of groups as to potentially putting place some off-takes. So whilst it’s not yet known, we’re going to work to ensure it’s quicker than what a lot of people would otherwise assume.
Q6: Brilliant. Finally then, you’ve said that FinnAust Mining Plc have defined a strategy focussed on growth through acquisition, do you have your eyes on anything at the moment?
A6: This was the strategy that was formulated with our largest shareholder Western Areas, as you’re already aware they are one of, if not the, largest nickel producer in Australia and sitting there at 30% shareholding post this Bluejay proposition, really gives us some leverage in the overall marketplace to take advantage of depressed commodity prices. We have evaluated a number of projects and have discarded almost all of them, we do have our eye on two other significant opportunities that we are progressing at the moment but we’re probably best to leave that in terms of any information until we have some more clarity on those things.
