MUNDO MINERALS LIMITED
South American Projects Lead To Strong Quarterly Results
MUN - Quartely Results - Mr John Langford - CEO
Tue, 29 Jul 2008 09:00AM
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Mr John Langford
Tue, 29 Jul 2008
09:00AM Australia/NSW
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MUNDO MINERALS LIMITED (MUN)
ASX code: MUN
Website: http://www.mundominerals.com
Industry: Materials
Principal Activities:
Gold exploration, development and production.
Address:
West Perth, 45 Ventnor Avenue
West Perth
WA
Phone: (08) 9429 8894
Fax: (08) 9429 8800
Executives & Directors
Mr John Langford , CEO
Mr Michael Schmulian , Executive Director
Mr Barry Eldridge , Non Exec. Director
Mr Brian Hurley , Non Exec. Director
Mr Robert KcKenzie , Non Exec. Director
Mr Joe Mobilia , CFO
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Company ASX Announcements
Company ASX announcements can be viewed on the ASX website.
Announcements from the preceding six months are shown below.
Please refer to the relevant stock exchange if any of the above information is incorrect
MUNDO MINERALS LIMITED (MUN) Events
Australia/NSW
MUNDO MINERALS LIMITED (MUN)
| Appendix 3B | Mon, 17 Nov 2008 |
| AGM Presentation | Mon, 17 Nov 2008 |
| Results of Meeting | Fri, 14 Nov 2008 |
| Chairman`s Address to Shareholders | Fri, 14 Nov 2008 |
| Shares to be released from Escrow | Tue, 4 Nov 2008 |
| Quarterly Activities and Cashflow Report | Thu, 30 Oct 2008 |
| Change in substantial holding- AGP | Mon, 20 Oct 2008 |
| Cancelation of Employee Options | Fri, 17 Oct 2008 |
| Rising Stars Mining Conference presentation | Tue, 30 Sep 2008 |
| Full Year Statutory Accounts | Fri, 26 Sep 2008 |
Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.
INTERVIEW WITH JOHN LANGFORD, CHIEF EXECUTIVE OFFICER OF MUNDO MINERALS LIMITED (MUN)
“South American Projects Lead To Strong Quarterly Results”
http://www.brr.com.au/event/48728
TUESDAY, JULY 29, 2008, 9:00 AM.
BRR Good afternoon and welcome to Boardroom Radio. Today, we are joined by John Langford, CEO of Mundo Minerals. Thanks for joining us today, John.
10 MUN Thanks for the opportunity.
BRR John, today you have announced some pleasing quarterly results that have been driven by the Engenho project in Brazil. Did you want to elaborate on these results for our listeners?
15 MUN Sure. Engenho is a project that we have developed over the last 18 months. We were lucky enough to commission our treatment facility on the 30th of April this year which allowed us to start putting the ore from the decline we have been developing through that treatment facility. To the end of June, the treatment facility and the mine have been going exceptionally well and we are
20 very pleased with all the metrics associated with that project. The initial part of the mining has been to develop the mine and expose the ore bodies and that has been proceeding exceptionally well. Up until the end of June, most of the ore that we have put through the treatment facility was development ore because you need to develop through and expose the primary ore body
25 before you can effectively mine it out and mine it out in a logical fashion. Development ore, traditionally, is lower grade and I guess we have been putting through something around 3 grams per tonne. As of last week, we have been accessing the stoping ore which gets us closer to the run of mine. This is a normal part of the mining process. The mine itself, ground conditions
30 are excellent. Our mining team has done a superb job in getting development up and running. An actual fact in the last two months, anecdotally we believe that we have exceeded development records for Brazil. The guys have achieved an excess of 400 metres of declines from using a single Jumbo. We have now exposed a number the ore bodies and the mine is well positioned
35 to develop a credible production profile. With respect to the treatment facility, the treatment facility has been operating in excess of its rated capacity. It has been operating about 10% above the design capacity which is very pleasing and we have had very little downtime. Pretty much, the only downtime we had to date has been associated with the commissioning. We had a small issue, I
40 think last week, where the external power provider had a power blackout for a few hours. Now, this is not related to our plant, but it did create a little bit of downtime for us. Metallurgically, we have a budgeted metallurgical recovery around 93% and the plant has been delivering around 95% to 96%. All of the metrics are very, very pleasing. From a cost perspective, all our costs are
45 pretty much in line with our expectations. Mining costs are a little above our expectations, but that relates to the fact that we have been doing a lot of development work in excess of our budget, and of course, if you do work over and above your budgeted expectations, your costs are going to be up. We will benefit from that in the future because the whole strategy of putting our development program forward is to make sure that we have plenty of flexibility with the ore body as we develop through. One of the final points I will make with respect to the mining is that we have been finding additional ore bodies. We just found another one last week that looks pretty exciting.
5 With respect to the ore resource model, what we are finding with respect to developing the ore body is that there is a very strong reconciliation to the models. Overall, in the early stages of our mine, we are very, very comfortable with Engenho.
10 BRR John, that is some very good news there. But also, as part of this project, you have established some short-term funding. Why have you chosen this option?
MUN We did that as part of our normal business planning. One of the things that is really important to us is to appraise our Company as a business and make decisions that are good for the business. It was really important for us to
15 make sure that the treatment facility was operating effectively and we ran that the treatment facility import our first bar of gold in mid June. We sold that gold very early in July. Once we have born our first bar of gold and proven that the system worked completely, we ceased production of gold for two weeks. The reason for that is that we wanted to allow our covenant stocks to get the gold
20 loadings correct so that when we were operating the project on a sustainable basis we had a strong continuity of production and that we were not robbing the gold circuit of excess gold just to pull bars of gold. It is a valid strategy and it is a strong business decision. In addition to that, we have been doing affirmative development work in Peru. While we have limited our exploration
25 activity mainly because we were scheduled to begin a lot of review work in this period of time, we have been operating a full exploration team and their administration so we thought it was prudent to put in place a $10 million financing facility just to make sure we had a buffer with our financing and cover our costs until we had sustainable gold production. I must say we now
30 have sustainable gold production and our financial position is as we expect it will be. We do not expect to be using that financing facility much past September, so it really is only a buffer to allow us to approach the business in a cohesive manner.
35 BRR Okay, John, I just wanted to touch on your other South American projects which you have also had some pleasing results out. Would you like to just explain to our listeners what you guys have been able to achieve with your other South American projects?
MUN We have three other projects in South America, one in Peru and two in Brazil.
40 Now, our project in Peru, Torrecillas, is an area of very high-grade deposit. We currently are in the process of project assessment on that project. We are putting a decline down to access the ore bodies. During the quarter, we did access the ore bodies and we are about to start developing along the mineralised veins. We expect in the next couple of months to start to develop
45 a very small production profile from Peru which will help subsidize the cost there. We have also undertaken technical testing with respect to mechanical ore sorting. Our initial review of that is very positive and very encouraging and we will incorporate all sorting into our feasibility study. Our assessment on Torrecillas at this stage is that we are very encouraged by it. We need to keep doing some technical assessment work and that will appear over the next few months, but all of the indications we have at the present moment are very positive.
5 We have a project in Brazil called Tocantins. Tocantins is a joint venture we have that we can earn up to 80% interest in any resource we have there. We have been focusing in one area called Conceição. Conceição has been an area that we have been getting some significant exploration success. We stopped drilling during the quarter because we thought it was necessary to
10 undertake a data review. That data review is ongoing, but we believe that we now understand the structures. It appears that the mineralised trends there are pipe-like structures that go into the earth and we expect that that resource, as it develops, will be an open-pittable resource for us. We are very highly encouraged by that. At this stage of the resources development, we
15 believe we are well on track to develop our resource there. The next stage of exploration at Conceição will be to do a JORC compliant resource. During the quarter, we did a couple of diamond drill holes into a tenement to the east of Conceição. We had some encouraging results from that tenement. We got 1.25 metres at 17.9 grams per tonne. We do not have assays from the other
20 drill holes, but I can tell you that the initial exploration that we have undertaken at that new tenement, the new tenement is called Ampar, is most encouraging and we will also be focusing on that.
The final project we have that we have undertaken some work is called
25 Jaqueira. Jaqueira is a potential high-grade deposit there. We have a target there of maybe half a million ounces at 10 to12 grams per tonne. We have not done any drilling work on that tenement. It is very early stages. During the quarter we have been preparing the tenements for drilling and we hope to drill those tenements starting in September. The access for the drill works has
30 been completed. We are just waiting for tenements to be issued to us. The geologist did take some channel sampling on the tenements when they were preparing the drill access and we got grades between 6 and 65 grams per tonne. So that tenement is most encouraging for us and that we expect that we will have some idea as to the viability of that project early in 2009.
35
Overall, all of our projects are showing strong legs, and based on what we are seeing at the present moment, we have no reason other than to expect that all of our projects, with the right amount of work, will develop into production assets. We believe that we are on track with disciplined and
40 focused management to develop Mundo Minerals to deliver what we have always said is a sustainable production base of in excess of a quarter million ounces of gold.
BRR Thank you very much for your time and also the insights today that you have
45 provided our listeners, John.
MUN No problems at all and thank you very much for the opportunity. It is always great to be able to just spend a few moments just explaining some of the rationale behind what is in our quarterly report.
BRR That was John Langford, CEO of Mundo Minerals. If you have any questions in regard to this broadcast or any other broadcast, you can contact us on brr@brr.com.au. I am (inaudible) (0:10:16) and thank you for listening to Boardroom Radio.
INTERVIEW CONCLUDED
Contact brr@brr.com.au for more information
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