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Success Factors – The Quest for Investment – Force Commodities Limited – InvestorIntel

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A conversation with Alastair Stephens, Executive Director at Force Commodities Limited. The start of a series of articles on ASX Listed Gold Explorers.

First, the introduction from their web site.

Force Commodities Limited (Force Commodities) (ASX: 4CE), formerly Sovereign Gold Company (ASX: SOC), is an Australian-based exploration company. The company has two key projects, Halls Peak Base Metals Project and Mt Adrah Gold Project, both located in NSW, Australia. It also has a majority stake in the Rocky River – Uralla gold project, also located in NSW.

Force Commodities endeavours to promote good relationships with landholders in a manner that will enable it to carry out its exploration activities in a responsible and effective manner, whilst respecting the needs of landholders and the local community. Its Community and Landholder Liaison Program (CLLP) is to provide a management framework, which will assist Force Commodities to provide an effective means of communication with all landholders and other stakeholders.

Strategic Approach

  • Focus to realise underlying value of key projects by targeted project development consisting of:

    • resource development
    • supplementary brownfields exploration and
    • feasibility study programs
  • Halls Peak
    • Targeted drilling to define a high-grade Zn-Pb-Cu-Ag mineral resource
    • Complete a scoping study
  • Mt Adrah
    • Identify and define high-grade, near-surface mineralization
    • Undertake early-stage discipline studies and complete a project options study

What is your current resource position and what is your proposed resource development schedule?

Halls Peak: define small high grade DSO type ore Zn, Pb, Cu, Ag plus mine plan by EOY. 2018 Approvals then small UG mine with a crush screen sort and feed to Imperial smelter. Could sell low grade ores to others for conventional con feed …. dunno…..maybe?

Mt Adrah: 770,000 Oz. Avg grade 1.1g/t in a 150M2 pipe by +900m deep – only rational mining method is a block cave but Capex is too high. Need to find higher grade vein – start small, high grade, then can get deep and expand later to block cave, upgrade concentrator, economies of scale

What is your proposed funding strategy for that development schedule?

Small placement needed in 2017, funding Halls Peak development in 2018

What is your expected schedule to production and what are your expected bottom line operating costs?

Halls Peak

  • 2017 resource plus mine design and rehab plan
  • 2018 approvals (start mining)
  • 2019 mining. NP $1m/month

Mt Adrah – post 2020

What are the inherent advantages or otherwise of your mineralogy?

Halls Peak – Low capex , maybe $10m max. Gazetted road to lease boundary and within 400m of mine site, UG mining by contract (topography allow us to strike drive directly into mineralisation without waste development), met plant by lease, No need to concentrate, no tails dam, no waste dumps. We know the material is marketable (already tested), NP Cash flow maybe $1m per month. Short life of 2 years almost certain, but the mineralisation is likely to keep yielding more small high grade pods. Would not be surprised with a 5-7 year mine life.

Mt Adrah – can float to concentrate then treat with Cyanide. Disadvantage arsenic.

What are the social, environmental and political factors associated with your projects that may be of concern?

Halls Peak: Crown land special reserve (mining) no native title, no pastoral, no houses, not a State Significant Project therefore only local council approval needed = NSW government signoff. Sensitive area though with National Parks etc in the region. needs a careful management plan and rehab plan. Keep small, underground, bottom up, backfill as you go, no concentrator, no waste dumps

Mt Adrah: Pastoral lease, landowner issues, arsenic management critical, tailing dam management

What are the short to medium term possible highlights that potential investors should be looking out for?

June: Drill intercepts Mt Adrah White Deer – high grade gold vein target

July/August: Halls Peak base metal drill results and met test work results

Q4: resource statement Halls Peak, mine design, rehab plan