Chairman's AGM Address
October 16 2008 - 5:34AM
UK Regulatory
Chairman's AGM Address
16th October 2008
FINDERS RESOURCES LIMITED
Chairman's Address to the Annual General Meeting 16 October 2008
As we have a fairly large body of formal business to attend to, I
will just give you a brief overview of our Company's progress over
the past year, and of our vision for the way forward. Comprehensive
background information is available through our annual report, which
has been circulated electronically to shareholders, posted on our
web-site and hard copies are available outside here. After the formal
part of the meeting, you are invited to join us for morning tea, and
to meet with Directors and staff who will be happy to try and answer
any questions you may have regarding our company.
2008 has turned out to be both exciting and highly challenging for
Finders as we move towards developing the high grade Wetar copper
project.
The excitement has come through progressing the feasibility study,
and the development of a commercial scale demonstration plant for the
Wetar Copper project, and continued highly encouraging results from
exploration at our Ojolali gold silver project in Sumatra.
The challenges arise from construction delays we have experienced
with the demonstration plant, which have resulted in cost over-runs
from our original budget, and the progressive deterioration of the
world financial markets to their current uncertain state. These
factors have placed significant pressure on our share price.
Directors believe however, that although there will be challenges in
the current market place, the high quality nature of the Wetar
project will enable it to be financed and developed in an orderly
manner.
I will deal with the negative factors first, and then outline our
responses to these events. It has been said before, and in truth,
that the difference between good organizations and bad organizations
is not them having things go wrong, but how they respond when things
go wrong.
Delays to the Demonstration plant have almost exclusively resulted
from external contractor issues, coinciding with industry wide
capacity constraints, and logistic issues. To mention the key example
is the supply of electrical busbars- a key component (which weigh
about 4 tonnes) for distributing high current densities to the
electrowinning cells. These were ordered from a South African
supplier for delivery in August, and to cut a long and sad story
short, were finally completed on Tuesday of this week, and they are
being air-freighted via Singapore as we speak. Start up of the
solvent extraction electrowinning circuit is now expected around the
third week in November, with a rapid ramp-up to the full 5 tpd copper
capacity by early December.
These delays in development of the demonstration plant, and
consequent delays in cash flow from that plant, have resulted in us
needing to raise additional funding in order to keep the Wetar
feasibility study on track for completion at the end of this year,
and to maintain our target schedule to commence full scale production
from Wetar by the end of 2009. This has been done through a placement
of shares to sophisticated investors at 60c, and also through a share
purchase plan to enable current shareholders to participate at the
same price. I am pleased to announce that despite atrocious market
conditions, we have achieved commitments for approximately $5 million
through the placement, on whose acceptance you will be asked to vote
shortly, and an additional $163,000 through the share purchase plan.
The placement includes an investment of US$2 million by a subsidiary
of US based Resource Capital Fund, (RCF), a highly respected group
specializing in resource investments, and we welcome them on to our
share register.
Now to the good news.
Without pre-empting the feasibility study and quoting detailed
numbers, all our work to date indicates that at Wetar copper, we have
a project which is extremely robust economically, and will remain so
at copper prices significantly below current levels. The price of
copper, while having retreated from all time highs remains very
strong in historical terms, and the recent financial upheavals will
tend to restrict development of marginal new production.
The combination of high copper grade, open pit mining with very low
stripping ratios, low cost heap leach processing with good predicted
recoveries, and the non acid consuming of the Wetar ore will result
in a highly competitive cost structure compared to other new copper
producers.
Our move to Ausenco as prime contractor for the feasibility study,
with their recent experience in constructing a similar sized SXEW
copper project for CopperCo at Lady Annie, has been very positive,
and the study remains on track for completion at years end.
With regard to financing for the full scale Wetar Copper mining
operation, the development of the demonstration plant has provided a
complete dress rehearsal for the full scale operation, in all aspects
from permitting , engineering, sourcing, logistics, training and
environmental to social acceptance, to the extent that development of
the main operation will really comprise a major brownfields
expansion. We have been involved in discussions with potential
funding partners throughout the year, and currently have four groups
with the resources to provide the necessary development funding,
undertaking due diligence studies under confidentiality agreements.
In this respect completion and successful operation of the Wear
demonstration plant will represent a key milestone.
At the Ojolali gold -silver project in Sumatra, we have slowed down
our exploration activities to low cost surface work to conserve
funds, but we remain confident that with the 140,000 Oz oxide gold
resource established at Jambi and new targets indicated by surface
work, we have the basis for a second mining operation, with
exceptional growth potential for new discoveries in the 30 sq Km area
of mineralization. Our strategy at Ojolali is to resume exploration
drilling after cash flow is established from the Wetar demonstration
plant, with the aim of completing feasibility studies and permitting
for a small scale start up operation by the end of 2009, with initial
production in the second half of 2010.
And finally, I would like to emphasize the quality and commitment of
our board and management team. Directors still control around 25% of
the company's shares, and are contributing $650,000 to the share
placement you are being asked to approve this morning. Our recently
announced appointment of Rob Thomson as General Manager Development,
with his track record of successful delivery of mining projects in
South East Asia, is a great addition to our team. I am also pleased
to announce that Mr Chin Haw Lim, with extensive mining and also
Indonesian operating experience with Straits Resources and Triako
mines, will be joining us as Chief Financial Officer from mid
November.
Thank you for your attention. I will conclude with a brief slide show
showing construction activities at Wetar. Finders directors believe
that with a genuinely high quality project, and a highly experienced
and committed team, we are now well placed to move into successful
copper producer status, and that our shares represent an exceptional
growth opportunity going forward.
For further information please contact
Finders Resources Ltd:
Russell Fountain, Executive Chairman, +61 2 9211 8299
Chris Farmer, Managing Director, info@findersresources.com
Financial PR:
Doug Macdonald, +61 424 255 959, Capital Group (in Australia)
Paddy Blewer or Nick Elwes, +44 20 7457 2020, College Hill (in the
UK)
RFC Corporate Finance Ltd - Nomad and Corporate Adviser:
Rob Adamson, +61 2 9250 0000 or Stuart Laing, + 61 8 9480 2500
FinnCap - Finders' Broker for the AIM market
Mathew Robinson, +44 (0) 20 7600 1658
Joe Lunn (Analyst), +44 (0) 20 7600 1658
Background
Finders, listed on AIM and ASX, is the operator of the Wetar Copper
(~73% and earning), and Ojolali Gold-Silver Projects (72% with
option) in Indonesia, and holds an investment in Geopacific Resources
NL, an ASX-listed company with active exploration programs for gold
and copper in Fiji.
At the Wetar Copper Project, Finders has previously announced the
following resource estimates for the Kali Kuning and Lerokis
deposits:
Attributable (72.4%)
Category Tonnes (M) Cu% Cont. Cu Tonnes (M) Cont. Cu
(KT) (KT)
Kali Kuning Measured 3.3 2.7 89 2.4 64.6
0.5% Cu Indicated 2.6 2.4 63 1.9 45.3
Cut-off Inferred 0.6 1.8 11 0.4 7.7
grade
Total 6.6 2.5 165 4.8 119.1
Lerokis Indicated 2.9 2.5 71 2.1 51.6
0.5% Cu Inferred 0.4 1.7 7 0.3 4.9
Cut-off Total 3.2 2.4 76 2.3 55.1
grade
Overall 9.8 2.5 241 7.1 174.2
As part of a definitive feasibility study, a demonstration SX-EW
plant with 5t per day copper cathode capacity is being installed with
planned cathode production from September/October 2008, pending
timely delivery of late equipment. The Company is targeting
commercial production of 20-25,000 tonnes per year cathode by the end
of 2009.
At the Ojolali Project, Finders controls what it considers to be a
major new epithermal gold district, and has been undertaking an
extensive exploration program comprising detailed drilling to
establish and initial mining resource, supported by extensive surface
geophysical and geochemical surveys. Finders' believes that the
Ojolali project has strong potential to generate short-term cash flow
through open pit CIL/CIP development of the gold resource at the
Jambi Oxide gold deposit.
For further information on results previously reported and a full
resource statement please visit our website www.findersresources.com.
Competent Person Signoff
The Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (the 'JORC Code') sets out minimum
standards, recommendations and guidelines for Public Reporting in
Australasia of Exploration Results, Mineral Resources and Ore
Reserves. The information contained in this announcement has been
presented in accordance with the JORC Code and references to
"Indicated" and "Inferred Resources" are to those terms as defined in
the JORC Code.
The geological and Mineral Resource information in this announcement
has been reviewed by and is based on information compiled by Dr R
Fountain who is a Fellow of the Australasian Institute of
Geoscientists and a Director of Finders. Dr Fountain has sufficient
experience that is relevant to the styles of mineralisation and types
of deposits under consideration and to the activity that he is
undertaking to qualify as Competent Person as defined in the JORC
Code. He consents to the inclusion in this announcement of the
matters based on his information in the form and context in which
they appear.
---END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
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