NORTH QUEENSLAND METALS LIMITED
NQM Ends Quarter as Gold Producer
NQM - June 2008 Quarterly Report - Mr John McKinstry, CEO
Thu, 31 Jul 2008 02:00PM
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Mr John McKinstry
Thu, 31 Jul 2008
02:00PM Australia/NSW
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NORTH QUEENSLAND METALS LIMITED (NQM)
ASX code: NQM
Website: http://www.nqm.com.au
Industry: Materials
Principal Activities:
Gold Producer and Explorer of base metal deposits in North Queensland.
Address:
269 Wickham Street, Level 11
FORTITUDE VALLEY
QLD
Phone: 1300 308 832
Fax: (07) 3666 0510
Executives & Directors
Mr Neville Thomas , Chairman
Mr John McKinstry , CEO
Mr Bruce Kay , Director
Mr Donald Walker , Director
Mr Michael Tilley , Director
Ms Kylie Anderson , Company Secretary
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Company ASX Announcements
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Announcements from the preceding six months are shown below.
Please refer to the relevant stock exchange if any of the above information is incorrect
NORTH QUEENSLAND METALS LIMITED (NQM) Events
Australia/NSW
NORTH QUEENSLAND METALS LIMITED (NQM)
| Audio Broadcast - Half Year Forecast | Wed, 10 Dec 2008 |
| Forecast Half Year Profit of $6-8 million | Tue, 9 Dec 2008 |
| Release from Escrow | Fri, 28 Nov 2008 |
| Company Update | Thu, 27 Nov 2008 |
| Results of Meeting | Tue, 11 Nov 2008 |
| Audio Broadcast | Tue, 11 Nov 2008 |
| AGM Presentations | Tue, 11 Nov 2008 |
| Change in substantial holding | Mon, 10 Nov 2008 |
| Company Update | Fri, 7 Nov 2008 |
| Change in substantial holding | Mon, 3 Nov 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 MCKINSTRY, CHIEF EXECUTIVE OFFICER OF NORTH QUEENSLAND METALS LIMITED (NQM)
“NQM Ends Quarter as Gold Producer”
http://www.brr.com.au/event/48832
THURSDAY, JULY 31, 2008, 2:00 PM.
BRR Good afternoon and welcome to Boardroom Radio. Today, we are speaking with Mr. John McKinstry, CEO of North Queensland Metals. Thanks for
10 joining us today, John.
NQM Thank you.
BRR John, you have released your quarterly report today and we see that you ended the quarter as a gold producer with full production at your Pajingo
15 Mine, which you have a 60% interest in. What have been the developments at this project?
NQM (Inaudible) (0:00:23) talk about those as presented in the report because we have six months now at Pajingo. We have been working hard at returning the mine to a full production status and in getting to what we believe is the most
20 sustainable production level. Production for the quarter was slightly down on the previous quarter and I guess, in short, the reasons for that are simply that we are in some of the older remnant stopes left by the previous owner and some of those have proved a little more difficult than we perhaps allowed for in our original plans. But probably more importantly, we are set about
25 restoring development to get access to the new stoping area so we can get a bit more flexibility into the mining schedule and be able to take the more difficult ones with something better and have less of an impact on our production. So for us, it is a case. We believe we are there for the long term and it is a matter of setting things up correctly, and if that costs us a little bit
30 more in the short term, then that is something we are prepared to do for the sake of the long-term operation. If you will recall it, we are working towards establishing our operation with 300,000 tonnes per annum of ore and that should deliver us around 70,000 to 80,000 ounces of gold a year. We see no reason to back away from those earlier targets. Everything is looking as it
35 should. While our costs for the previous quarter have been a bit higher than we had even perhaps forecasted, if you recall, we did had a forecast of slightly higher cost of production for this quarter, but we do not see any reason to shy away from our earlier targets of around the $5.50 per ounce mark. During the month, we got onboard our technical team up there. It has
40 taken a while to get a hold of people like geologists and engineers. They are not easy to obtain in this market, but we have got a good team up there now. They are really starting to make an impact and we have been able to get the processing plant converted over to operating continuously which will give us a better result from the milling side of things too. We have also been able to get
45 our exploration geologist onboard there, so he is now busy looking at the targets which we will be singling out in the next six months for some activity.
At Pajingo, as we have said in the report, we have received a good average price for the quarter. However, with the current markets as they are, the Board have elected to take some put options. Looking ahead, these are essentially an insurance against the severe drop in the gold prices and we have taken the option at $850 an ounce, which does not limit any upside in the price of gold. It simply protects us from a severe downturn, and at $850,
5 they are not terribly expensive and we just believe it is good insurance for our shareholders. These options extend through to April next year and we will be reviewing them on a very frequent basis just to see where we stand.
Apart from that, as we said, a couple of key appointments. Alex MacDonald
10 has started up there as a General Manager now. He has got his feet firmly under the desk. Simon Jackson is also right there as the Mine Manager. Simon is certainly having an impact on the mine. It is good to see the team all working together out there.
15 BRR John, we also see the Herberton project which North Queensland Metals has a 100% interest in. Seeing the development of the Baal Gammon project moved forward, what have been the highlights?
NQM Just as you say, Herberton project of which Baal Gammon is the first of a number of projects we hope to get operating up there in that area, reporting to
20 the central plant, we have been busy during the quarter looking at the sales of their products and also (inaudible) (0:04:27) because of a number of options. Our best guess is predicated on selling a concentrate. However, a number of options have popped up in recent times and we are looking at both smelting in Australia and using a hydrometallurgical process also in Australia which, in
25 each case, would give us separate copper products and indium products so that we can separate our credits here from our core metal which is the copper. The difficulty in selling this particular concentrate to overseas markets is a lot of smelters are too large to really be able to acknowledge the credit for the indium. So, in terms of extracting the maximum value from the ore, we
30 see these options as being very important. Part of that, we have done underground workings at Baal Gammon and we are in the process of extracting around 300 tonnes of oil which will give us enough concentrate to play with both those options there, and from there, we will work out which is the best. We have got several parallel paths being trod there, and of course,
35 as part of that also, we are looking at the various financing options, most of which are linked to the end-product. So, low activity happening in that area with the Herberton project. With the exploration side of things, we are focused on finding a bit more copper in the near vicinity. During the quarter, we have had the EPM immediately to the north which of course we had the
40 agreement to purchase on granted. We are now able to really look at that seriously and start looking at getting drills moved in to drill some of these targets we have wanted. The first of those is Consolation which is about 1 to 2 kilometres north of Baal Gammon. Some old records show very similar mineralisation up there to what we have got in Baal Gammon, albeit a bit
45 steeper dipping but we are very keen to get in there and just see whether there is something more substantial and something that could add to the feed for the plant. On top of that, we have got Isabel which is only about 2 kilometres to the east of that too. Although it is a lead/zinc deposit, that one, where it is very high grade, we are very keen to get it drilled and just see what is actually in there. But as I said, priority is on copper at the moment and we will just focus on that. We have got a lot of information there from old drilling, not sure if it is actually of a standard that would comply with JORC these days, but it does help target holes and obviously, internally, we can use a lot
5 of the information to build up resources and be able to get to something that we can report on fairly quickly. On the permitting side, everything is progressing very nicely. The L.U. agreements that we have had up there with the traditional owners have been able to be actually registered and we are putting out an announcement very quickly on that, and that should allow us to
10 progress towards getting the mining leases granted.
BRR John, for our listeners, if you can just briefly touch on what the future holds for North Queensland Metals and what opportunities there are.
NQM Pajingo is the cash producer for the Company, so obviously we are very keen
15 to see that performing as it should. We are expecting in the coming quarters to increase the production rate and get some of the mine planning and scheduling really anchored down and get it up riding as it should. We have obviously got work to do with costs in keeping them down and getting the development in place further out for the development of the new resources,
20 particularly in the (inaudible) (0:08:18) areas. We are looking at some opportunities up in the Charters Towers area to provide further feed for the Pajingo operation. That is looking fairly exciting at the moment. We hope to go and make an announcement within this next quarter as to what we are doing there. Up at Baal Gammon, the feasibility study has been concluded,
25 but we are now, as I said, still working on the marketing and the financing angles and we would expect to be concluding that too within this quarter. So a lot happening there. Also, as I had just mentioned before, we should be getting leases granted and moving forward being able to actually do something physically on the ground.
30
BRR Thank you very much for your insights there today, John. Also, thank you for your time, we do appreciate it. We look forward to hearing from you soon.
NQM No problem, Eddie. Thank you very much.
35 BRR That was John McKinstry, CEO of North Queensland Metals. If you have any questions about this broadcast or any other broadcast, please feel free to contact us on brr@brr.com.au. I am Eddie (inaudible) (0:09:26) and thank you for listening to Boardroom Radio.
INTERVIEW CONCLUDED
Contact brr@brr.com.au for more information
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