We’re here today with Matt Gauci managing director of Metalicity. Matt thanks for your time. Are you able to share some of that Metalicity history?
Matt Gauci: [00:00:14] Yeah sure. So Metalicity listed on the ASX approximately two years ago. It was on the back of the acquisition of the world class Admiral Bay Zinc project and the listing at the time included the sale of a net smelter royalty to Resource Capital Funds who then also became our biggest shareholder.
Resource Capital Funds are a two and a half billion dollar mining private equity group and supported us in terms of the listing, the resource estimation and scoping study on Admiral Bay.
David Tasker: [00:00:43] And what are some of the activities that you’ve achieved on the projects since listing?
Matt Gauci: [00:00:47] Sure. So the most important thing with Admiral Bay is really taking the database apart. With respect to the resource and the previous pre-feasibility studies, doing a detailed audit on the work that was done and then really recompiling the mineral resource estimate which we were able to publish halfway through 2016 which become a mineral resource estimate of 170 million tonnes at 7.5 percent equivalent.
On top of that was an exploration target range of up to 250 million tonnes, again 7.5 percent zinc equivalent and those combined would clearly make Admiral Bay the largest zinc project in development anywhere in the world. So that was the first step.
The second step was then to undertake a scoping study to ascertain the economics of the project and certainly ascertain what the technical challenges would be. Any large scale long life asset you’re going to have some serious technical challenges particularly one that sits at 1200 metres depth.
And so that scoping study was delivered by SRK consulting independent technical experts at the end of 2016. And that again was a study which defined the project as being technically feasible and certainly we’ve done our own work to ascertain what the economics of the project are and while we can’t publish those on the ASX we’re certainly confident that Admiral Bay is a project that is very, very economic.
David Tasker: [00:02:14] And a project of this size and global significance. What sort of interest has it attracted?
Matt Gauci: [00:02:20] Yeah really good interest. We’re in constant contact with the top 20 sort of mining companies in the world and we’re in constant contact with the biggest zinc smelters in the world and clearly we’ve got existing relationships with some of the bigger PE funds globally.
So we’ve recently signed a memorandum of understanding with China Minmetals. China Minmetals are China’s biggest zinc producer and also China’s biggest zinc smelter. An enormous organization, one that has got far reach or reaches into the far ends of the world with respect to base metal projects.
China Minmetal’s by way of example, in 2016 their revenues were larger than the combined revenues of Rio Tinto and BHP. So we’ve got a really strong relationship with those guys and we see them pretty often in Beijing sharing a lot of our current pre-feasibility study work with them. We recently just commenced a metallurgical test work program with China Minmetals and that obviously will deliver a result.
To understand exactly what the recoveries will be on the on the Admiral Bay ore as well as understanding what the final concentrate grade of zinc and lead will be. So we’re really encouraged by that relationship and clearly a large organisation such as China Minmetals doesn’t move quickly but it’s certainly heading in the right direction and the ox is slow but the earth is patient.
David Tasker: [00:03:42] In terms of some of the milestones investors should be focused on over the coming three to six months?
Matt Gauci: [00:03:47] Yes. So we commenced a pre-feasibility study on Admiral Bay by the beginning of 2017. That’s being done in two stages. The first stage is addressing some key technical challenges that came out of the scoping study and they primarily relate to the geo-technical competency of the host rock, the hydrological competency of the host rock.
Undertaking metallurgical test work as recently mentioned with China Minmetals and also rebuilding the high grades zone of Admiral Bay in terms of mineral resource estimate. But now that currently sits at around 20 million tonnes at 10% and that alone, which only makes up about one tenth of the ore body, that alone is one of the largest and highest grade zinc / lead deposits in Australia.
So the second stage of the pre-feasibility stage one is near complete. And once that’s done we’ll then step in to PFS stage 2 which will be drilling the resource up to the indicated category such that we can then publish a prefeasibility study with all the accompanying technical and economic parameters.
David Tasker: [00:04:54] Matt thanks for your time.