TAMAYA RESOURCES LIMITED
Promising Times Ahead For Chilean, Armanian And Portugese Investments
TMR - Half Year Results Presentation - Mr Hugh Callaghan, Chief Executive Officer
Friday, 22 August 2008 11:00am
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Mr Hugh Callaghan
Fri, 22 Aug 2008
11:00am Australia/Sydney
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TAMAYA RESOURCES LIMITED (TMR)
ASX code: TMR
Website:
Industry: Materials
Principal Activities:
Copper mining and exploration in Chile
Address:
, 75 Elizabeth Street, Level 12,
SYDNEY
NSW
Phone: 61 2 9223 2088
Fax: 61 2 9223 3088
Executives & Directors
Mr John Hick , Non Exec. Chairman, Independent Director
Mr Hugh Callaghan , CEO, Executive Director
Dr Christopher Hartley , Non Exec. Director, Independent Director
Mr James Squire , Non Exec. Director, Independent Director
Mr Glenn Kondo , CFO
Mr Bill Lyne , Company Secretary
Company Podcasts
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
TAMAYA RESOURCES LIMITED (TMR) Events
Australia/Sydney
TAMAYA RESOURCES LIMITED (TMR)
| Suspension from OQ - Annual Listing Fees - Non-Payment | Tue, 25 Aug 2009 |
| Notice of Appointment of Administrators | Thu, 30 Apr 2009 |
| Notification of the Appointment of Receivers and Managers | Thu, 30 Oct 2008 |
| Appointment of Voluntary Administrator | Tue, 28 Oct 2008 |
| TMR IBR Maiden JORC Compliant Resource for Regua | Tue, 14 Oct 2008 |
| Extension of current suspension | Mon, 13 Oct 2008 |
| TMR- Suspension from official quotation | Tue, 30 Sep 2008 |
| Request for suspension | Tue, 30 Sep 2008 |
| Director Resignation - Scott Davidson | Fri, 12 Sep 2008 |
| Final Director`s Interest Notice (Scott Davidson) | Fri, 12 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 MR HUGH CALLAGHAN, CHIEF EXECUTIVE OFFICER OF TAMAYA RESOURCES LIMITED (TMR)
“Promising Times Ahead For Chilean, Armenian And Portugese Investments”
http://www.brr.com.au/event/49726
FRIDAY, 22 AUG 2008 11:00AM
BRR Good afternoon and welcome to Boardroom Radio. Today we will speak with Mr. Hugh Callaghan, CEO and Executive Director of Tamaya Resources.
10 Thanks for joining us today, Hugh.
TMR Thank you, Eddie.
BRR Tamaya, this week, announced the write down of $136.4 million of non-recurring items. Why was there a write down? What does this mean to
15 Tamaya going forward?
TMR Eddie, the write down of $136 million reflected the change to the carrying value the company’s placed on assessed in the light of the changed market conditions and emerging technical challenges that we have at the Lichkvaz Project in Armenia. Since Tamaya bought the assets last year, the global
20 stock market and marketing commodities have changed dramatically and I don’t think companies are enabled any longer to place the values on assets that were possible earlier in 2007. In part, I think, this decision recognizes that since the sub prime crises broke, debt is no longer readily available and the availability of capital in the form of equity for junior mining companies have
25 changed, I think, to what may be some considerable period of time. The company no longer sees the potential for rapid development in high evaluation of the project that were placed on at the time of acquisition. We feel that under the modern interest accounting laws that leaves us with very little options but to recognize the impairment. Furthermore, Tamaya had
30 invested in Iberian Resources and of course, primarily the Lichkvaz Project because of what could have appeared to be a rapid timetable to development. This is due to the fact that the mine was already substantially developed. I think further investigation… once old mine working has been refurbished it’s shown that the fresh ores from within the mine there are
35 somewhat different from the old stock piled up outside of the mines from pervious workings. The implication of this process is that the ore is not readily treated in the low tactics conventional process that we’ve relied upon in making our acquisition. Eddie, to my belief that the project may need to be merged with another local gold copper project to best bring forward
40 production and economic treatment process, and of course, following a detailed review of the project in early July when Dan Conder and myself visited sites for a fortnight to review in detail the metallurgy and the implications for development, Tamaya has decided that the investment should be written down to reflect the change carrying value.
45
BRR And what could the write-off of $15 million for Chile (Inaudible) (02:13.4).
TMR Eddie, to my interest on the carrying value of the Chilean assets in recognition that the number of capitalized exploration of expenses in the Punitaqui business take back several years and these are no longer winning value and require writing down on the modern and international accounting standards. These relate to acquisitions before Tamaya or SMC Gold that was previously called, buying the Punitaqui business some years ago. In fact some of these expenses date back to the mid- to late 90s relating to
5 properties that are no longer in effect in operation or in some case, been abandoned completely. These are a number of small mines. But I think at that time, there have been a fairly aggressive capitalization of expenditures hence, that’s the reason for the write-down.
10 BRR What happened with the ordinary uprighting cash flow for the period? Is Punitaqui operation profitable?
TMR Eddie, the Punitaqui operation accorded a gross operating margin of $7 million for the half year despite mining low grades of developmental. Of course, you may remember we treated some very expensive third party or in
15 January or in February. All the mines itself sell profitable on an operating basis that isn’t yet able to cover capital development which behind till 2009 and the cost of servicing debts and corporate overheads. Clearly, therefore, profitable operating phases but not in order to cover debts and capital at this stage. But we do believe that as volumes increase and grades improve, the
20 mines should be able to cover all of its operating capital expenditures, share and corporate cost by the end of the year. I think the trend that we’ve shown shareholders has been extremely positive and we do expect cover prices to remain firm.
25 BRR Hugh, why is so much underground development taking place?
TMR Eddie, we can’t be spending approximately $800,000 a month on underground development and this is expected to be completed by June 2009. The reasons for this are as follows. When we finalize the mining plant for Tamaya in the June quarter, this showed us that high grade portions of the
30 Cinabrio mine are widely disseminated but as a strata abounds sediments hosts to deposit. This is fairly typical of the kind of deposits in Chile. The implications for us from an operational perspective is that the grades will vary significantly in the mines unless a significant amount of development is undertaken to ensure that high grade ore is always available to mine. This
35 doesn’t mean that the lower grade ores will never be mined at one day and maybe they will be towards the end of the life of the mine and the remnant mining but the flexibility that this higher grade and all this development gives Tamaya for the life of mine deposited is significant. Of course, it does give us an option for very cheap and rapid further expansions of some dates in the
40 future.
BRR Tamaya has indicated that it’s working to divest Iberian Resources. Why is this?
TMR Eddie, since we bought Iberian Resources, the group was fortunate to
45 acquire the expiration portfolio known as Latin-American Copper in Chile which is proving to be an outstanding set of assets. It may be that this…. poor in acquisition of Iberian has turned out to be so to the lack assets seem to be an absolutely outstanding acquisition that will go a long way over the next two to three years in making up for the write-off that we’ve taken in Iberian. I think the decision we’ve had to make is that we don’t see the equity markets for junior stocks turning around in the near term with macro economic uncertainties, the realization by a number of institutions that junior mining stocks aren’t generally liquid. In recognition to the fact that we don’t think
5 equity and debt will be forthcoming, Tamaya has had to make the decision that we cannot, in these conditions, market conditions, try to fund both Chile and Iberian. The decision has been taken to dispose of Iberian Resources and refocus to the (inaudible) (05:47.0) Chile only. Of course, we are going to seek when the Iberian resources assets are divested. We will be seeking that
10 repayment of shareholders loans are made to Iberian in the past year. Iberian has, of course, appointed devices to the sale of the Armenian assets an we expect those loans to be repaid and Tamaya will use the proceeds to pay down debt.
15 BRR And as you would have the assets that Tamaya has for sale?
TMR Eddie, we’re in the process of marketing this CIL gold plant which is located in Australia and which was purchased as part of the plan to develop the gold business of Armenia. The sales process underwent; it isn’t clear around when the plant was sold or what price has been realized for the sale. Being
20 realistic, while the plant is an outstanding condition, Petunia market, which be the likely customers but is not exactly in the best of condition amount of stock markets as it is. But we do see the lightly bias of the plant emerging during the next couple of months. We hope that once again to sell down…. sell the plant and pay down debts with the proceeds. We’re also looking to sell the
25 gold exploration lease at Charter Towers at Queensland which has been in the company’s ownership for a number of years since the company was known as SMC Gold… in fact operated the gold mine in the area. We do expect that this will be predominantly a pencil-scribble-paper deal. I think there are outstanding exploration leases but clearly not a focus for Tamaya.
30
BRR And lastly, Hugh, what is happening on the operations at the moment?
TMR Well, that is a timely question, Eddie. I’ve just come back from operations in Chile and I think everyone’s hard at work in lifting availability of the crush and plant and we’ve improved maintenance. We’ve seen that’s been a key to
35 higher throughputs. The Cinabrio mine itself, Eddie, has been producing at volumes and grades that are well above budget but at this point in time, the plant, of course, is our key bottleneck. We’ve made a number of adjustments to the crushes and while it has been extremely heavy rains in the past two weeks, almost torrential rains, which is greater than is usually expected this
40 time of the year which have affected production, we nevertheless see that we’re able to mill, at the moment that’s somewhere between 2600 and 2800 tonnes of ore a day and the most important part is we do feel we’re building the capacity to take its operating level to the targeted 3,000 tonne a day level which we believe to be the current capacity of the plant. I think we will be
45 providing the market with regular updates going forward as we’re aware of that this is really important.
BRR Hugh, thank you very much for your time today. I’m sure our listeners will appreciate the update and we look forward to speaking to you soon.
TMR Thank you, Eddie.
BRR That was Mr. Hugh Callaghan. CEO and Executive Director of Tamaya Resources. If you have any questions about this broadcast or any other
5 broadcast, please feel free to contact us on brr@brr.com.au. I’m Eddie Sari and thank you for listening to Boardroom Radio.
INTERVIEW CONCLUDED
Contact brr@brr.com.au for more information
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