Interview with Alex Black, President and CEO of Rio2 Ltd (TSXV: RIO).

We like Black's honesty. The managements track record is good. They have made investors money. They have a problem with water but has a work around. They had a large Feasibility Study plan, which has halved in size. Investors are concerned. We ask him why investors should trust him.

Rio2 is a Gold mine development company, focussed on taking its Fenix Gold Project in Chile to production, and its exploration platform in Peru.

Rio2 used to be the talk of the town, but things have changed in the last couple of years. Since hitting reaching CAD$2.85 at the end of March 2017, the share price has fallen to CAD$0.43 today. The market cap stands at c. CAD$78M. This decline will be more concerning given 2019's strong gold performance.

Why has Rio2 struggled? Black explains the primary driver behind Rio2's fall from grace is the expectations of investors. As a gold mine development company, Rio2 plans to methodically develop a fully-operational mine in the shortest possible timescale.

While Rio2's management team has an impressive track record of developing gold mines, demonstrating technical prowess and adding value, what are they doing today to get Rio2 out of this slump? Strangely, given the current gold bull market, Rio2 has decided to reduce the scale of the gold project laid out in a PFS conducted by a different company in 2014. Why reduce scale? Black acknowledges it might take some of the "sexiness" away from the opportunity Rio2 presents, but is adamant it is the right way to go. An updated PFS was concluded in August 2019. The scale is down to get cash flowing. CAPEX has reduced from USD$400M to just over USD$100M. The strip ratio is lower and the IRR is slightly higher, but the AISC has increased, for now. This is a low-grade gold bulk tonnage operation, so surely scale is the most important element of this resource? Rio2 will seek to get the gold mine constructed as quickly as possible to create value, increase the production rate from an initial 100,000oz per annum to 200,000oz of gold per annum, and reward investors with returns.

Black is keen to explain how his team is different from any other junior: diverse with a variety of specialist roles. Black also touches on the environmental and political challenges of Chile as a gold mining jurisdiction, with a particular focus on the water licence/trucking situation. Is this interim solution effective? Black is attempting to concurrently apply for a permit while generating cash. This could mean investors won't have to wait as long for value to be added. He then explains why an EIA should be very straightforward for Rio2 to complete in the next few months. Rio2 can't afford to hang around. Investors will want to see results soon.

Rio2 has about US$13M in cash currently. They've already spent c. CA$40M on the project. Rio2 is going to be telling its gold story to the markets. What is going to make them stand out? Long-term Rio2 is M&A a possibility. Rio2 will continue to pursue strategic acquisitions with the intention to build a 'multi-asset, multi-jurisdiction, precious metals company focussed in the Americas.'

Company page: https://www.rio2.com/

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Interview with Mark Heyhoe, COO of Harvest Minerals (AIM: HMI).

Harvest Minerals is an AIM-listed organic natural fertiliser producer in Brazil. Heyhoe claims Brazil is the fastest-growing fertiliser market in the world.

Harvest Minerals fertiliser brand is KPfertil. Heyhoe claims KPfertil has significant production advantages and consumer advantages over more conventional forms of fertiliser. He claims that KPfertil is cheaper to produce than more conventional fertilisers (around US$18 per ton with scaled-up reduction to US$7.50). He also claims KPfertil is much easier to produce than many other fertilisers, because it is found in heavily weathered rock/lava at surface. The only processing required is for the KPfertil to be crushed, and Heyhoe claims crushers are inexpensive. Heyhoe also explains that KPfertil is organic and natural, which feeds into the green narrative a lot of investors quite like. He also claims KPfertil has advantages for farmers; specifically, there is no leaching. KPfertil goes straight into the soil and stays there for longer than other fertilisers.

Heyhoe claims that Harvest Minerals has performed “extensive” trials in order to the get the product registered, with a focus on KPfertil’s primary markets: sugar cane, coffee and maize. Last year, Harvest Minerals produced 50,000t on KPfertil for local farmers and farming groups to test KPfertil on crops. This mean results will take a year to assess and then for orders to be placed.

Share price performance has been disappointing for investors. Starting the year over £0.14, Harvest Minerals sits at £0.03 today. The market cap is £6.6M.

Why has the share price laboured? Heyhoe explains issues with a sales partner, that didn't hit targets of KPfertil that Harvest Minerals had set, is one major problem. Harvest Minerals with a recently financed (c.£1M) a 320,000tpa processing plant is capable of producing a lot more product should sales take off. The question the market is asking is if Harvest Minerals has the ability dramatically increase sales quickly and scale-up the operation and cashflow? Harvest Minerals has consequently employed its own sales team to take control.

The worry for some investors will be that farmers will be hesitant to switch to KPfertil; the harvest season to central to the lives of the workers, and their fiscal health can hinge on it being a success or not. They will not want to risk things going wrong and may take their time to build up their orders. As a consequence of this, Harvest Minerals are currently producing stock to order. The largest current customer only accounts for around 9% of total sales. Harvest Minerals is keen to talk about the biological advantages of KPfertil which enhances the soil quality rather than targeting the plants. It is also potentially cheaper than the competition. The company has been reluctant to give financial or sales guidance at this point which is causing some frustration with shareholders. We are keen for them to show how they evolve from small agricultural player to meaningful, cashflowing, dividend paying company. margins and profitability is ok, but it's much better when done with scale.

In 2020, Harvest will seek to make more trial arrangements permanent and will upgrade their storage capacity so it is more in line with future production capacity. This is very early days, so let's take a step back and watch things unfold a little.

Company page: http://www.harvestminerals.net/ 

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Interview with Mark Chalmers, President & CEO of Energy Fuels (NYSE: UUUU).

It's a bloodbath for uranium equities at the moment. There is no news from Washington. Most Uranium CEOs have gone quiet. So we call Mark Chalmers to see what he knows.

Company page: http://www.energyfuels.com/ 

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Interview with Nicholas Bridgen, CEO of Ferro-Alloy Resources Group (LON:FAR).

The Ferro-Alloy Resources Group (FAR) is a vanadium development company. Their primary focus is the 'giant' Balasausqandiq vanadium deposit in Kyzylordinskaya oblast of Southern Kazakhstan. The deposit is claimed by Bridgen to be amenable to a much simpler, cheaper processing treatment than other deposits. In fact, Bridgen thinks FAR can be the lowest-cost producer in the world, and could still maintain a reasonable margin even in an environment of low spot prices.

Even for the most optimistic shareholder, they will have been left disappointed by the share price performance of FAR. Starting the year at £0.56, the price has fallen to £0.15 today. FAR's market cap is £47M. Excess supply and low spot demand from the steel industry pulled down ferrovanadium alloy prices in Europe and the US to a two-year low in the first week of October 2019. This has clearly been a key factor behind this decline, but could the management team have done anything differently?

Bridgen argues the macro story of vanadium will lead to price discovery, but he is keen to dispel the common assumption that vanadium redox flow batteries (VFRBs) will be economically viable in the near future. In fact, companies with inferior Vanadium projects that base their model of primary demand for VFRBs are "deluding themselves." We appreciate Bridgen's pragmatism.

Bridgen claims to have an experienced team behind him, but the two key things here are scale and margins; this is what is supposed to make FAR stand out. +90% of the world's vanadium production and 70% of the world's supply comes from a material called magnetite. It is low-grade iron ore, so creates more cost because of additional shipping and processing expenses. Bridgen is very critical of the flowsheet followed by his vanadium juniors. They all have to go through a complex process of concentration, roasting to 1,100 degrees celsius, then a regrind before the material is ready to be leached. FAR's material is ready to be leached right from the off.

As far as a mining jurisdiction, Kazakhstan has now become a 'well-run country,' that is 'above all the other stans in terms of its government.' While Kazakhstan isn't necessarily an ideal jurisdiction, Bridgen appears confident it is an area FAR can flourish in.

There is a significant overhang at FAR, and investors will want more justification than the vanadium price. The company listed at around £0.70 after all. Bridge insists FAR is in control of progressing the project, and dilution; these are the key to driving the price back up. Investors will be sceptical and will want to see this reflected in the market before having any confidence.

The next step will be a larger Feasibility Study. How will FAR finance this? Bridgen wouldn't tell us how much cash FAR has on hand, but did say they need to raise capital this year, sooner rather than later. FAR is debt-free and option free, so it seems debt may be an area Bridgen looks at. Will they go to market?

The reality here is the quality of the asset and the vanadium macro story can only help FAR so much. Investors want to see active decision making. They want to see their money spent wisely. Bridgen and his team have an awful lot of work on their hands if they want to get FAR back on track, and back delivering for shareholders.

Company page: http://www.ferro-alloy.com/ 

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Interview with Justin Tremain, Managing Director of Exore Resources (ASX: ERX).

Exore Resources, formerly Oroya Mining Limited, is an Australian-based Gold exploration and development company listed on the ASX, and was founded in 1985. The company owned lithium mining projects in Portugal and Sweden.

Exore Resources recently acquired what it claims to be 'some of the most compelling Gold exploration ground in northern Cote d’Ivoire, covering 1,948km2.

Exore claims Côte d’Ivoire is an 'established and proven jurisdiction for exploration, permitting and mine development, with an attractive fiscal regime and mining code.' While the country has seen 5 gold mines developed over the past 10 years with several recent additional +1Moz gold discoveries at resource definition/feasibility stage, we were keen to ask about the current operational environment; specifically, the surge of terrorist activity regarded by the UN as 'unprecedented' in the Sahel (West Africa) in their neighbouring countries of Mali and Burkino Faso. Is this an investable jurisdiction right now? Find out what Tremain has to say.

Exore Resources' flagship asset is right on the border with Burkina Faso, a country that has descended into chaos, with hundreds dead and around 650,000 citizens displaced at the hands of ISGS, Ansar ul-Islam, Boko Haram and al Qaeda amongst others. Tremain is adamant that while this is a situation they are monitoring "very closely," it is not one that will affect their operations. Tremain points to the lack of attacks in the Côte d’Ivoire, in addition to the strong government as reasons for investors to feel reassured. He also speaks about the heavy local military presence in the area, supported by the French government. Exore Resources itself does not employ security.

Exore Resources stated it would deliver a Maiden Resource of c. 400,000oz - 500,000oz in September, 2019 to show analysts the company is progressing. We questioned the benefit of doing so at the time. It didn't in the end deliver a Maiden Resource. Tremain explains that while the company didn't deliver, plenty of work has been done, and Exore Resources intends to make its Maiden Resource larger after conducting additional drilling. Tremain claims shareholder feedback was also a big factor, with shareholders allegedly saying they were very pleased with drilling results and wanted to see continued drilling. The overall strategy is to define a +2Moz resource. Tremain claims the Maiden Resource would have been an interim step rather than a true reflection of Exore Resources' potential.

How has the market responded to this strategy? The share price was AU$0.07 this time last year, but now sits at AU$.06. Has all this drilling actually added value? The market cap stands at AU$36.84M. Tremain has work to do.

Exore Resources' recent drill results were good, but it appears there are question marks elsewhere; does the management team have what it takes to get this resource out of the ground economically? Tremain's "surprise" at the falling share price speaks volumes. We wait to see how they can change this trend.

Exore Resources recently went to market last 2019, raising AUS$10M at AUS$0.085. Around 80% of this investment came from institutional Gold investors. Exore Resources has spent AUS$8M in Côte d’Ivoire. How much has actually gone into the ground? Tremain says 90%, so why hasn't the share price gone up? He is scratching his head a little, especially given the drill results.

The new strategy is drilling, but what is the end game? Tremain states he intends Exore Resources to develop a mine and go into production on a large scale, standalone Resource.

Company page: https://www.exoreresources.com.au/ 

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Interview with Murray Hill, CEO of Marenica Energy Ltd. (ASX: MEY)

Marenica Energy is an ASX-listed exploration company focussed on uranium exploration and the application of its patented beneficiation process called U-pgrade™. U-pgrade™ is claimed to reduce processing capital and operating costs of uranium mining operations by c. 50%. We ask him where and what type of ores U-grade works for. It doesn't work for everyone. So is it going to generate them any cash in the short-term?

Marenica has several deposits across Namibia and recently acquired an asset Australia. All are at varying stages. Is this long list of assets more a liability than anything else right now?

Marenica, like most uranium juniors, has had a tough year in terms of market performance. Starting the year with a share price of AUS$0.08, Marenica has experienced a tumultuous year. The price today sits at AUS$0.07, with a market cap of AUS$8M and 117M shares outstanding.

Marenica has AU$1M in the bank. Its burn rate is "fairly low" compared to most companies at AU$800,000 per annum. Hill speaks about how Marenica is trying to maximise the bang for their buck, an example of which is drilling holes in Namibia at a relatively low cost, less than $50,000. However, investors will have some questions regarding the prudence of this move. is this drilling really going to add value? it hasn't thus far, and investors do not want to see their money squandered.

Investors have a lot of choice in the uranium space, so what sets Marenica apart? Hill points to the size of the Namibian resource, the Marenica Uranium Project. It has an inferred resource of 61M lbs across two deposits, the Marenica and MA7 deposits. The resource is a surficial calcrete hosted uranium deposit in the same palaeochannel system that hosts Orano’s Trekkopje Uranium Project. Marenica claims the project shares similar mineralogical characteristics to Paladin’s Langer Heinrich deposit and Deep Yellow’s Tumas deposit. Marenica also claims to have 48.5M lbs underground in Australia.  

Company page: http://marenicaenergy.com.au/ 

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Interview with Marco Romero, President & CEO of Euro Manganese Inc. (TSXV/ASX: EMN)

Euro Manganese is a Czech Republic-based Manganese tailings/recovery story. Euro Manganese is working on a Feasibility Study. It has already done a PEA, and is in the late stages of its EIA. It is also filing for permits and preparing to build a demonstration plant.

Euro Manganese has a share price of CAD$0.15, a market cap of CAD$25M and 176M shares outstanding.

Romero regards Manganese as the forgotten battery metal. He says every Western EV brand needs Manganese. Manganese is predominantly intended for NMC cathodes in lithium-ion batteries. Euro Manganese offers investors access to Manganese, in the form of Manganese product production from tailings.

Euro Manganese has a single asset: the Chvaletice Manganese Project. Romero regards it as Europe’s largest manganese deposit by far, and a "globally significant deposit." The resource has been 95% quantified over the last 4.5 years, and this has been aided by the mineralogy of the material: very fine particles that are well homogenised and distributed throughout the deposit laterally.

A pilot plant was built as part of the PEA, bur Euro Manganese is now ready to construct its demonstration plant. It needs to source appropriate funding of US$4M, and US$1M per annum for operational purposes. The demonstration plant is designed to produce bulk, multi-ton samples of manganese products for companies to trial. This will prove Euro Manganese's processing flowsheet is effective, which Romero is confident about, given all technology is completely conventional. If they like the manganese products, a CAPEX of US$400M + operating costs has been suggested for a main plant, designed to produce 50,000t of high purity “pharmaceutical” grade manganese products for Chvaletice’s life of resource: c. 20 years.

There are some problems in the way of progress for Romero. Euro Manganese only has US$4.2M on the books as of Q3/19, and will need to raise cash soon to get things off the ground. While the company has signed some contracts an extremely large Chinese international mining company investors will have questions regarding the 'pay-as-you-go nature of Euro Manganese's supply. There is an element of uncertainty as to how much companies will buy, and if they will come back for more. Investors will want to see supply contracts soon.

Romero didn't state Euro Manganese will go to market to raise capital, but we expect this to happen, leading to dilution for shareholders. Will this be the right strategy in the long run?

In terms of timings, investors will also have some major questions. Our educated assumption is that the Demonstration Plant will take c.1 year to construct, followed by a trial period for the Manganese products. Then the Main Plant will need to be constructed and made operational. This could be 4-5 years before EMN actually starts to demonstrate its potential, and there are a huge number of obstacles in the way as far as raising capital, permitting and supply contracts. This story looks like a slow-burner, but one that could be rewarding in the long term. We will keep watch as this story progresses.

Company page: https://www.mn25.ca/ 

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Interview with Mark Kenwright, Associate Director of Wardell Armstrong - International Mining Consultants.

This is a first conversation with a very well respected mining consultant, with a view to open up to Retail shareholders how institutions view risk when making investments. Due Diligence is everything. Kenwright is honest and gets straight to the 'crux' on a variety of topics investors may find interesting.

Wardell Armstrong, founded in 1837, is an international consultancy firm providing engineering, environmental and mining services in the mining & minerals, infrastructure & utilities, and property & development sectors. Kenwright himself is a chartered professional FAusIMM CP(Geo), with over 24 year's experience as a geology/exploration Manager.

Wardell Armstrong doesn't build mines, but they provide studies and reports at various stages to help companies get mines constructed. Companies generally hire Wardell Armstrong to obtain a competent person's report, scoping studies and due diligence studies and similar before conducting an IPO listing or investing into them. These reports can cost anyway from £50,000 to £150,000. The "bread and butter" services that Wardell Armstrong provides are scoping studies, desktop studies and due diligence for mining companies at a development stage. They are providing a much more detailed version of what Family Offices and HNWIs should be doing themselves.

We were interested in asking about the transparency and integrity of Wardell Armstrong: do clients influence their reports? Kenwright insists that while Wardell Armstrong can treat certain subjects delicately, everything must be disclosed as part of their publications. Nothing is held back and they have a legal obligation to ensure this is the case. If Wardell Armstrong doesn't talk about something at the request of one of their client's, they have to disclose why. There is a table that very few investors seem to look at towards the end of these studies, that will inform them of things they need to know, yet often don't.

Kenwright then touches on the IMO3 conference in London. The title this year is 'Mining and the Electric Vehicle.' Mining companies, regulators and academics will meet on the 29th-30th January to discuss issues, ideas, and solutions to problems in the mining world.

Kenwright then talks about the Western Africa security situation. The Sahel has been suffering from increasingly widespread instances of terrorist attacks, and mining companies, such as SEMAFO, has suffered heavily at the hands of ISGS, Ansar ul-Islam, Boko Haram and al Qaeda amongst others. How has this impacted other mining companies and what is the outlook? Wardell Armstrong is well aware of this issue, courtesy of their standard practice of performing a risk assessment. Kenwright describes the deterioration of the situation in Burkina Faso as "shocking." Kenwright has discussed the situation with senior security operatives in the region and they have coined the phrase "Kabulisation", in relation to the similarities with Afghanistan, where security forces only have control of a very small area around the capital. Everything else is "bandit country." We wonder if this will expand in to other territories.

Kenwright explains there have been 650,000 Burkina Faso residents displaced; this has not received any mainstream exposure. He does, however, claim it is still possible to mine economically in the region. Kenwright takes a "life goes on" view, but can investors afford to be so confident?

Kenwright also touches on the outlook for the struggling lithium market, and provides some general investment advice, such as considering avoiding a management team that changes frequently (LinkedIn is apparently very useful)!

What did you make of Mark Kenwright? What questions would you like to ask about Wardell Armstrong or general mining topics in the future? 

Company page: https://www.wardell-armstrong.com/ 

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Interview with Darren Klinck, President and CEO of Bluestone Resources (TSXV: BSR).

Bluestone Resources is a Guatemala based high-grade gold development company, listed on the TSXV. It is currently focussed on the Cerro Blanco gold project, which is a permitted, high-grade underground gold project located in South-Eastern Guatemala. Over CAD$200M has been invested by previous holders of the asset.

Bluestone Resources also has the potential for green energy production with the Mita Geothermal Project. A Feasibility Study has been conducted, 19 geothermal wells have been drilled, but for now Bluestone Resources is not looking at the options for commercialising the project as it focused on their Gold development.

2019 has been a tumultuous year for Bluestone Resource, ending on high. Starting the year at CAD$1.35, the price fell to a low of CAD$0.90 in May, but has climbed back to CAD$1.47 today. The market cap is CAD$100M, and there are 69.23M shares outstanding.

Bluestone Resources is currently trying to put financing in place for Cerro Blanco. Klinck claims the company has seen interest from private equity and strategic partners, in addition to commercial banks. The advanced nature of the permits, in combination with the infrastructure in place after previous expenditure at the property, has seen the interest from banks become stronger. Klinck is hoping to announce a Bluestone Resources debt package. Interest appears to have been high, so let's keep following and see what happens. Is a short life-of-mine (8yrs) and the risk of a single-asset model putting investors off?

Bluestone Resources appears to have some operational advantages compared to other gold juniors. A worldclass AISC below USD$600 is particularly noteworthy.

So, what is Bluestone Resources going to do this year to tell their story to retail investors? The big selling point is the resource itself. The Cerro Blanco project is estimated to contain 3.44Mt of proven and probable ore reserves grading 8.5g/t Au and 32.2 g/t Ag and containing 940,000oz of Gold ore and 3.5Moz of Silver. Now Bluestone Resources needs to give investors the confidence it has the know-how and financing to extract the value from this promising asset.

The next steps involve trying to push the life-of-mine up via further drilling/resource measurements, basic and detailed engineering, optimisation and flowsheet refinement. "130% of their (the company's) time is spent on Cerro Blanco at the moment." Acquisitions won't be looked at until Cerro Blanco is in production. All of their eggs appear to be in this basket.

Bluestone Resources has the Mita Geothermal Project at an advanced stage, and hope an opportunity will arise to commercialise it in the next few years. It is currently parked, though it provides solid optionality, and Klinck hopes it can be incorporated into the mine.

Strangely Klinck avoided our question regarding Bluestone Resources' cash reserves. He did, however, state that equity is an unlikely route; instead, they are looking at a debt package and should have something to tell shareholders in the next few months.

In terms of Guatemala, there has recently been a 5-month transition period, though the new government has now been sworn in, and they appear to be very pro-mining.  

Company page: https://bluestoneresources.ca/ 

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Interview with Merlin Marr-Johnson, Director of Salazar Resources (TSX-V: SRL).

We're back with another interview with Salazar Resources, an Ecuadorian/Colombian exploration and project development company that offers investors exposure to gold, copper and silver resources, and copper-zinc VMS deposits. This years Exploration is fully financed, courtesy of a JV with Adventus Mining Corp.

Salazar Resources started the year with a share price of CAD$0.11 but has risen to CAD$0.21 today. The company has a market cap of CAD$26.56M.

A common theme amongst smaller junior mining companies is the lack of a coherent business plan; it usually goes: we're going to acquire a licence, we're going to drill it, we're going to see if it's worth drilling further, then we're going to drill again. Salazar Resources has a refreshing approach. It has a clear Business Plan, has structured a financing plan via a farm-out, consultancy fees and leasing of 3 fully owned drill rigs. They currently have c.$5M in the bank. With an additional recurring income and an extremely low G&A. Marr-Johnson says that their exploration program for this year is consequently fully funded.

The partnership with a larger mining company, Adventus Mining Corp., looks promising on paper and means Salazar Resources expects no dilution in 2020 for shareholders. Salazar Resources has just farmed out its first gold-copper asset, the El Domo Curipamba VMS (Volcanogenic Massive Sulfide) ore deposit discovery. It now looks to employ a cookie-cutter approach to continue the development of its portfolio of Ecuadorian and Colombian mining assets. The cash burn is minimal and the numbers look attractive.

Marr-Johnson himself has an impressive resume, with recent experience at Uranium producer and zinc revenue generator Global Atomic Corp. Ex-Newmont country team leader and Salazar Resources CEO, Fredy Salazar, is a vastly experienced Ecuadorian geologist. He is the go-to geologist for the many majors in Ecuador.

Marr-Johnson is keen to state the respect Salazar Resources' name holds in Ecuador, both locally and nationally. By ensuring they work with local communities to implement sustainable mining practices, and maintaining a good relationship with government officials, Salazar is a respected name in the up-and-coming mining jurisdiction of Ecuador. Investors are taking them much more seriously than most juniors; should we too?

Investors can also see growth from the seemingly reliable development of existing copper/gold/silver/zinc assets, but what about the future? Marr-Johnson states Salazar Resources always has its eyes open for potential acquisitions that could add value for shareholders.

This appears to be junior mining done right: something of a rarity in a market of big promises and disappointing delivery. However, they need to keep their feet on the ground. While the evidence appears to be positive, let's see how Salazar delivers over the coming months.

What did you make of Merlin Marr-Johnson? Has Salazar Resources impressed you with its gold/silver/copper/zinc discoveries? What about the business plan? How do you rate Ecuador and Colombia as mining constituencies?  

Company page: https://www.salazarresources.com/  

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