Ian Mulholland – Rox Resources
ONE OFF THE WOOD: Rox Resources managing director Ian Mulholland popped into the front bar this week to fill us in on the company’s exciting exploration portfolio.
The company is currently working away of the Mt Fisher gold project in Western Australia; and the Myrtle zinc / lead Marqua phosphate projects in the Northern Territory.
Two of your three projects, Mt Fisher and Myrtle, are receiving a lot of exploration attention at present, how would you rate these in order of importance for the company?
Both are important.
The major focus for Rox Resources at present, operationally, is the Mt Fisher gold project in Western Australia which we believe has the potential to host gold deposits in the 1-2 million ounce range.
However, Myrtle, which we have farmed out to Teck, has the potential to be a major world class zinc deposit and if it proves up as we hope that willhave a major impact on us as a company..
We’re very keen to keep an eye on how Teck is progressing with Myrtle because if you consider the different, relative potential size of each project, Myrtle could potentially end up being ten times the value of a one or two million ounce gold deposit, which is what we are looking for at Mt Fisher.
You acquired Mt Fisher from Avoca just over 12 months ago and since then have been fairly active out there. To what stage have you brought it to?
Last year we conducted 8,500 metres of RC (reverse circulation) drilling, basically following up drilling that previous explorers had done.
That drilling campaign allowed us to issue a Resource statement, the first for the Mt Fisher area, earlier this year stating we had 86,000 ounces of gold in three high-grade deposits.
Do you have any immediate plans for any of those three high-grade deposits you have identified?
We would much rather press on with our current exploration schedule in order to move to that 1-2 million ounce target.
I look at that project and at the Mt Fisher Belt and I compare it to the Yandal Belt to the west.
Back in the mid-1980s everyone said there was no gold in the Yandal Belt and so far there has been 17 million ounces discovered and mined there.
That said, we do however have an opportunity to maybe toll treat one of them at one of the plants located nearby but that would really be only a small amount tonnage-wise and is not our main focus.
Is Mt Fisher far away from Yandal?
Geologically, Mt Fisher is the next belt over from Yandal so there is a good chance it should also contain multi-million ounce gold deposits.
So far between Rox, and another company exploring to the south of us, there has been around 400,000 ounces of gold identified.
We have a large number of anomalies and targets to follow up on our tenements; the hardest decision for us at the moment is deciding which one we start with.
As exciting as the Mt Fisher project could be you still seem to be quite bullish in your regard to the Myrtle project. How did that Joint Venture relationship with Teck come about? Did they come knocking at your door or had you let it be known you were looking for a partner for the project?
We’d had a relationship with Teck for a while, well before the Myrtle project came up, through previous lead and zinc exploration we had carried out in Laos.
They had liked that project and the way we operated it. They approached us in regards to that project, but as it turned out we were unable to do a deal at that time.
When we acquired Myrtle and realised its potential, Teck were the first people we thought of.
Were they happy to receive that call?
Absolutely; I think it is now one of their main projects within Australia, at least.
What are the terms of the JV?
They have to spend $5 million to earn 51 per cent of the project by mid-2014 and they are well on track to do that.
They had to spend one million dollars and conduct 2,000 metres of drilling by July this year. They have spent the one million dollars but bad weather restricted them from completing the 2000 metres of drilling.
They’ll be back there as soon as the weather permits and we’re confident they will easily meet the required number of metres in time.
If they want to move beyond the 51 per cent stake they can earn 70 per cent by spending another $10 million – taking it to $15 million in total.
That’s two projects behaving nicely for you, is the Marqua phosphate project falling in to line as well?
We spent around half a million dollars on our Marqua phosphate project last year, which is also in the Northern Territory.
We did quite a bit of drilling there, which took the project to the point where we are now looking to bring a Joint Venture partner in there as well.
Have you raised the Marqua flag to the market place yet?
To a small degree, but at this point I think we are really looking for more foreign investment for this particular project rather than local investment.
We have been approached on Marqua but we’re still considering what we want to do with the project and we have people out there looking to see what options are available to us.
Is it a case of taking the time to ascertain exactly what sort of partner the project demands to enable you to define your search?
To a certain degree; you can spend a lot of time spinning your wheels by talking to people and not getting anywhere.
We were very-focused when it came to our JV partner search for Myrtle and that paid off for us and we would like to repeat the success of that process at Marqua, if we go down that route.
Should you strike a JV agreement for Marqua that would pretty much free Rox up to solely concentrate on Mt Fisher?
The opportunities offered to Rox at Mt Fisher really excite me.
I can see parallels between what happened at the Yandal Belt and what we have at Mt Fisher is very encouraging.
With the way the market is behaving at the moment, for a small company such as ours, gold is a good sector to be in.
Are you looking at building your own plant at Mt Fisher or would the toll treatment plan you mentioned earlier be the way forward for you?
I would think building our own plant would be the way we are heading.
We are clearly seeing the project has the potential to host multi million ounce deposits, so that’s the direction we want to follow.
We will build-up that resource inventory so that when we do launch a project at Mt Fisher it will be a very successful project.