BabyBulls (SAN DIEGO) – BabyBulls had the recent opportunity to speak with Barb Filas, President of Geovic Mining Corp. (OTCBB: GVCM; TSX: GMC). Barb updated us on the Company’s operations in Cameroon, Africa as well as in New Mexico and provided us with a number of milestones to look for as we head into 2012.
PETALUMA (Critical Metals Report) - The Critical Metals Report: Most resource stock investors are focused primarily on the precious metals and copper and, to some extent, the rare earth elements (REEs), which have gained increasing coverage in the past few years. Base and industrial metals such as nickel, manganese and cobalt seem to attract little investor interest. Why is that?
Rick Mills: Well, let’s focus on cobalt, which has never been on the radar screens of most investors. It is something new and investors have to get their heads around exactly what it is, and just how important it is to the functioning of a modern economy, in the green movement and in defense applications. Cobalt is going to undergo a massive sea change in perception among investors because it is so much more than an industrial metal. I call it the “King of Critical Metals.” Cobalt is an emerging story we can expect to hear more and more about as critical metals are the sexy new story.
TCMR: Why don’t you give us a definition of critical metals so everyone’s on the same page?
RM: There’s been some controversy over what is and isn’t a critical metal, so let’s lay it out for our readers based on three reports published in the last year or so. The U.S. Department of Energy says materials used in four clean energy technologies: wind turbines, electric vehicles, solar cells and energy efficient lighting, are critical now. The American Physical Society’s Panel on Public Affairs and the Materials Research Society coined the term “energy critical element” to describe elements that are essential to one or more of the new energy-related technologies. The European Union commissioned a report that identified 14 materials critical to the EU.
Geovic Mining (OTCBB: GVCM; TSX: GMC) has completed the staking of five square miles (13 sq. km) of mining claims at its Cornudas Mountains exploration prospect in southern New Mexico. Initial work completed by the Company indicates that the Cornudas Mountains claims host an alkaline laccolithic intrusion that contains significant concentrations of the heavy rare earth enriched mineral eudialyte. In addition to the rare earths, significant enrichment in zirconium, hafnium, tantalum, tin, yttrium and niobium have been confirmed.
Geovic Mining (OTCBB: GVCM; TSX: GMC) released its Final Feasibility Study for its Nkamoua cobalt-nickel-manganese project in Cameroon, Africa. The results appear quite favorable, with Geovic’s 60.5% share of the project holding a $405 million net present value (NPV) assuming three-year trailing average prices for the respective metals, and a $191 million NPV assuming a 15% reduction in these average prices.
The study, completed by world-class engineering firm Lycopodium with input from numerous industry experts including a three-member panel of metallurgical experts, appears to set the stage for project financing later this year, and potentially equity investments from major industrial conglomerates into the project. Offtake demand for the company’s PRIMARY COBALT DEPOSIT, particularly given that it is in the politically stable country of Cameroon, has been very high, so this study could catalyze conclusion of these discussions.
With a market capitalization of roughly $60 million, news of finality regarding the Feasibility Study clearly yields significant upside potential for the Company, particularly if it can solidify offtake and financing arrangements as anticipated.
Geovic Mining (OTCBB: GVCM; TSX: GMC) has been granted exclusive exploration licenses in New Caledonia, a French overseas island territory in the South Pacific. These licenses will enable the Company to evaluate the quality and extent of promising chromite-rich heavy mineral beach sand deposits in a program expected to commence later this year.
By way of background, several members of Geovic’s senior management team prospected for chromite deposits in the mineral-rich sands along the coast of New Caledonia during the 1980s. Based on this work, together with subsequent advances in mineral separation technology, the Company determined that an opportunity existed to define and ultimately develop a potentially economic major chromite resource.
Geovic Mining (OTCBB: GVCM; TSX: GMC) makes some changes to its senior management team. To start, Jack Sherborne will no longer be President and CEO, but rather will be in charge of the New Ventures Division. This stems in large part from a mild stroke Jack experienced recently, from which he is expected to make a full recovery. We have enjoyed working closely with Jack over the last several years, particularly traveling with him to various cities giving presentations to the investment community.
Michael Mason, a current director of the Company, has been appointed as Chief Executive Officer; Barbara Filas, the Company’s Chief Administrative Officer and Executive Vice President of Corporate Development, will become President; Timothy Arnold, most recently General Manager of General Moly, Inc. in Eureka, Nevada, has joined the Company as Chief Operating Officer; and Timothy Arnold will assume the role of Chief Operating Officer for the recently retired David Beling.
According to Wade Nesmith, Chairman of the Board of Directors, “These are important developments for the Company as it advances the Nkamouna project. The next year will be critical for us and we are pleased to be moving into 2011 with a realigned and augmented management team. Our key focus is to finalize the Feasibility Study Update and move forward toward identifying and executing the best plan to finance and develop the Nkamouna project. We are encouraged by the strong support of our partner, SNI and the Government of Cameroon. This project is of key strategic importance to Cameroon and we are determined to lead this project to fruition. Mike, Barb, and Tim will play key roles in this effort.”
Geovic Mining Corp. (OTCBB: GVCM; TSX: GMC) expects to release a feasibility study for its Nkamouna cobalt-nickel-managanese project by the end of April 2011. The report will incorporate project changes since 2008, including improvements to the process chemistry, processing plant, and mine plan.
Geovic Mining (OTCBB: GVCM; TSX: GMC) has acquired 71 exploration permits on a 66.5 square mile area in the northwest Whetstone Mountains of Arizona, specifically in Pima and Cochise Counties.
During a 2009-10 sampling program, Geovic discovered surface gold mineralization discontinuously along a nine-mile trend, in what appears to be a “hot-springs”, quartz-hosted, micro-fine gold deposit in regional detachment faults. Such settings tend to be excellent sites for hosting shallow, bulk-tonnage disseminated gold deposits.
Geovic Mining (OTCBB: GVCM; TSX: GMC) released a corporate update today, all of which was extremely positive, including the appointment of Phillip Mason as General Manager of Geovic Cameroon PLC. Mr. Mason is a mechanical engineer with more than 30 years of mining expertise, including 20 years in the African countries of Angola, the Democratic Republic of Congo, and the Republic of South Africa. Below please find highlights from the Company’s corporate update:
Nkamouna Project – A bankable feasibility study update is scheduled for completion by year end and is expected to include several process improvements resulting in lower costs and higher profitability.
Mining – An updated mine plan (i) incorporates an increase in measured and indicated resources resulting in a five year mine life extension to 23 years and (ii) anticipates an increase in cash flow in the early years.
Processing and Metal Recovery - Geovic has finalized its 3-stage metal recovery process which it will use to produce cobalt oxide, nickel carbonate, and manganese carbonate. However, the Company, at its discretion, has the option to sell a high-quality mixed sulfide precipitate, which is the end product of the stage two process.
Product Marketing – The Company continues discussions with several potential cobalt, nickel, and manganese purchasers to effect long-term metal sales agreements.
Environmental – The project has an approved Environmental and Social Assessment (ESA) in conformity with both Cameroon regulations and international environmental standards, which it recently updated as a result of the above described process changes.