Mike Ivey – Castle Minerals

 ONE OFF THE WOOD: The Roadhouse was visited by Castle Minerals managing director Mike Ivey who had a lot of interesting things to say regarding his company’s exploration success on its greenfield discoveries in Ghana.

 

How did the Castle Minerals story begin?

Castle is a company I floated in 2006.

I moved down to Perth from Kalgoorlie and got talking to a friend of mine who had been living in Ghana for around 15 years.

He had started pegging ground over there in his own right. I eventually acquired a package of ground and IPO’d the company on the back of it.

What was the ground like, exploration-wise, back then?

There had not been one drill hole carried out on any of the projects. There was a Ashanti-belt projects that we considered to be remarkably attractive, so we saw the opportunity existed for a junior company to add some value to it.

Had you had much experience in Ghana before this?

None. I was lucky to be able to find it on the map.

The bloke who had originally pegged the ground is my best friend; he has been since our university days.

His experience in the country enabled us to hit the ground with a lot of local relationships already established and a great understanding of how we should operate within the country.

We were able to build on his list of contacts, ranging from expat Australians to Ghanaians.

We still had a learning curve to negotiate but it was without as many road bumps as other juniors entering the region would possibly encounter.

Why did you elect to IPO on land in Ghana instead of Australia?

It’s getting much harder in Australia to make a meaningful discovery from a three to five million dollar IPO whereas West Africa in general provides massive opportunity for a junior explorer.

Plus exploration in Australia comes at a high cost, whereas in Ghana that cost is relatively low.

What sort of progress have you made on the project since listing?

We have found five greenfield gold discoveries and we embarked on our biggest drilling program so far, this year, which is currently underway.

We now have the largest exploration landholding in Ghana.

We found three new deposits in 2011, and increased the Resource base to a quarter of a million ounces.

Those three deposits were all greenfields discoveries; we have gone from target generation, to geochemistry, to drilling them out and hanging a Resource off them.

The bulk of your attention seems to be focused on the Wa project. To you find that you have to explain to people that you are actually exploring in Africa not Western Australia?

I have given presentations where people have commented that they thought we were in Africa and hadn’t realised we had ground in Western Australia.

Can’t you just tell them Wa stands for West Africa?

It’s something people will get used to once they’re more familiar with our story.

Wa is where the majority of work is being conducted.

How are you managing to maintain such a solid work schedule?

We transported our own drill rig last year.

It was shipped it over in a container along with a whole lot of spare parts, almost enough to build another rig.

We cleared customs in January and we have been drilling for the last three weeks at a cost below ten dollars per metre.

As well as saving valuable dollars, having your own drill rig must also be saving a great deal of time?

We have our own rig and the beauty of that is we don’t get delayed by having to rely on waiting for contractors to be ready to carry out our work, we can just move it around our tenements as we need to.

That flexibility is actually quite empowering and our team are really getting a lot of drilling done, averaging 150 to 250 metres per shift.

You’re in a pretty good neighbourhood as far as recent gold discoveries go.

We surround the 800,000 ounce Kunche and the 300,000 ounce Julie projects of Azumah Resources and are just across the border, from Burkina Faso, where Ampella has found three million ounces at Konkera.

We have this massive landholding, which is 200 kilometres north to south. It takes four hours to drive it from top to bottom, and it is over 100 kilometres wide at its widest point.

There’s a lot of activity in West Africa in terms of gold how do you stack up against some of the others in the space?

We consider ourselves to be one of the best value companies sitting in there at the moment, lined up against our peers.

Wa is a cracking project and we are the first ones to be in there drilling and exploring it and unlocking its potential.

We carried out a lot of work last year and now that we have our own drill rig we should be able to get even more done this year while gaining much greater value for our exploration spend as we do.

Do you have any idea yet how far off development or even production may be?

Not yet. We still need to build up the Resource to the critical million ounce point, but that’s our goal.

That’s what we are aiming to do.