Dundee Resources has over $250MM in assets and just became Premium Exploration's largest shareholder
Colin Jones, B.Sc., MAusIMM, Executive VP of Dundee Resources discusses the recent investment.
Could you give us a brief background on your professional accomplishments and work history?
I have been a geologist for over 30 years and have been involved in exploration and mining of various minerals on all continents during that time. My current role with Dundee Resources is to assess mineral projects in order to make the right investment decisions and to help manage the projects that we have a significant investment in. Prior to joining Dundee I was a Partner in an international consulting firm called RSG Global, based in Perth, Australia, during which time I acted as Independent Engineer for a number of banks providing debt finance for mine project construction. Prior to that I was Exploration Manager for Freeport in Indonesia where I was responsible for the management of a $50MM copper and gold exploration program.
What role did you play in the recent financing of PEM?
I was part of a small group within Dundee that made the decision to invest in PEM. I was also responsible for introducing the company to other prospective investors and assisted PEM in presenting to those investors.
What made you decide to become a director of the company?
I am representing Dundee, which holds a significant interest in PEM and is its biggest shareholder. As such, it was felt that Dundee should have board representation. I also like to think that I can contribute to the work programs as the project advances and assist with future financings.
What does Dundee look for when financing a mining company?
We concentrate primarily on the quality of the asset so we look in detail at the technical parameters of the project and make sure that the work has been done such that the data are reliable. We also look at management and form an opinion as the effectiveness of management and the personnel on the ground. Because of our technical expertise, we are able to form an opinion as to the potential size and scope of a project at an early stage when the relevant company has a low market capitalization that does not reflect the ultimate value of the assets. PEM is a good example of this.
What other companies have you financed?
Too many to mention here. We have a portfolio with an approximate value of $250MM in about 15 companies.
How long have you been following Premium?
Since just before the last financing in June.
What distinguishes Premium from other precious metals juniors in the region?
PEM has consolidated a very interesting area with potential for significant gold resources. Because of this, the company was able to raise enough cash to carry out a comprehensive drilling program. Other juniors in the region do not have such good potential and are restricted to relatively small work programs. In addition, PEM management are very familiar with the area and are committed to the project.
Much cash does Premium have? Do you have sufficient funding for the foreseeable future or will you be going back to the market for more capital?
PEM?s cash position must be approximately $7.5MM, which is sufficient to complete the current drill program. The company will go back to the market for more capital at some point, but not in the short term. The timing of another capital raising and the amount of funds raised will depend on the results of the current program.
What would you say is the biggest risk for investors in your stock?
Exploration is a risky business and there is no guarantee that economic gold deposits will ultimately be defined. Apart from the normal exploration risks, there do not appear to be any unusual risks associated with the project. With the price of gold set to keep increasing and the sorts of results that we anticipate, I expect PEM?s stock to continue to increase in value.
What else do your shareholders have to look forward to in the coming year? In 5 years?
In the coming year, shareholders will be able to look forward to continuing impressive drill results from a number of targets and an updated resource estimate for the Friday deposit. In 5 years we would hope to have defined a number of such deposits and have completed feasibility studies and project financing and be ready to start construction of a major new gold min Stockhouse Editorial Staff
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