ONE OFF THE WOOD: The Roadhouse is never short of interesting clientele and this week has been no exception with Allan Mulligan executive director of privately-owned South Sudan-focused explorers Epic Exploration pulling up a stool at the bar.
Epic Exploration is a private company looking to establish itself in South Sudan. How did that happen?
Epic.Ex was formed about 18 months ago. We consider the next hotspot for Australian exploration companies in Africa will be the Horn of Africa.
We decided at the outset to select South Sudan. The emancipation of South Sudan has opened it up to potential mining operations.
What is it specifically you are looking for in South Sudan?
We’re not following any particular commodity, as such. We are following whatever the country provides for us.
Our philosophy was to go there and see what was there first, simply because the country is so under-explored.
A book was produced in the 1970s, on the geology of Sudan. It said that at that time there had been over 120 projects and mineral deposits in North Sudan.
In the South there were only about two or three.
So you could pretty much describe the entire country as a potential greenfield for mining exploration?
We like to consider it as a green canvas.
It is completely undeveloped, infrastructure-wise as well.
The only developed resources-related infrastructure in the country dates back to the 1970s when Chevron developed some oil fields.
How large is your landholding over there?
We have around 70,000 square kilometres of exploration ground.
Map of Epic.Ex applications in South Sudan. Source: Company
How was Epic.Ex able to acquire that?
The first thing we did was to go there and meet with the government.
This was before the country had conducted a referendum that resulted in it being granted its independence in July 2011.
We also have an Australian-South Sudanese associate who has been invaluable as a cultural information link for us.
How is your landholding distributed across the country?
We have four zones: Paloich, Maiwut, Mundri, and Kapoeta.
Our major focus is on the Paloich manganese project, which has two historic drillholes that were drilled by a missionary who was moving through the country, to provide water for the villagers.
He actually had a geological background. He sent off the rocks that had been extracted from these water bores and found out there was manganese at 32 per cent and iron at 38 per cent in one of them.
In the other hole the manganese grade was lower at less than six per cent, however, the iron ore graded up to 70 per cent.
These two holes are 110 kilometres apart; who knows what we could find sitting in between them.
So that’s where our focus is going to start.
What about the other zones?
Maiwut is a large area with manganese, and gold potential, with the possibility of rare earths.
Kapoeta is an extension of the cross-structure from the Rift Valley that we believe has potential for gold.
There are three listed gold occurrences on the application area as well as an occurrence of copper mineralisation.
There is evidence that there has been a fair amount of artisanal gold mining carried out there over the years.
Mundri is also a possible gold play.
It appears you can really take a diversified approach to this in that you have a reasonable target at Paloich but you are quite open minded about what you may actually end up chasing?
We intend putting experienced greenfield geologists on the ground to start from the beginning with these projects.
We consider ourselves to be geographically-focused entering into this country, not commodity focused.
So you are going to be an exploration play in the true sense of the term, almost to the point where Epic.Ex could be considered to be pioneers?
Exactly; except that we have these two holes, which are an extraordinary point to start from, especially given they were drilled some sixty years ago and have never been followed up.
You’re at the stage now where you have identified these possible project areas, so what is your next move?
We are raising seed money now. We are hoping to raise up to one million dollars to enable us to drill the two sites located on the Paloich zone.
We have already located a drill rig, which is a man-portable rig that we have flown in.
We will drill those two sites in order to confirm the two historic intersections.
On the back of that, along with some upgraded geological information we will go to the market.
Will you be seeking a standalone IPO for Epic.Ex or go for a reverse listing?
It all depends on the market. We are confident that if we can have success with the drilling at Paloich, the market will be keen on an IPO.
When do you think you could be ready to list, be it via IPO or reverse listing?
If we can get the results from the initial drilling program by June, then we would be looking at listing in the third quarter of this year.
There is no time constraint on listing, although there is an element of risk involved in the project, simply because of the greenfield nature of the project, so we would like to approach the market with a greater sense of geological certainty.
It is a risk, being the first company to get on the ground in the country, but is does seem to be a calculated one because you do already have a significant target to initially focus upon.
There were a couple of other companies in working three or four years ago but their efforts came to naught because it was too difficult working in the country at that time.
We are in there now, under the new regime; we’re free to travel around, the economy in the capital of Juba is developing, and there is a robust foundation within the country on which to construct business.
People might raise their eyebrows at your decision to try and develop a mining operation in a totally greenfield country, but once upon a time there was nobody looking for iron ore in the Pilbara.
Look at West Africa. We say this is the new West Africa for Australian exploration companies.
If you are heading to West Africa now, you’re only going to pick up scraps as far as opportunities go.
This is pioneer country, and we are at least 12 months ahead of anybody else.
We have our ground and we have more than enough to get on with.