By Peter @Newton Bell, 3 December 2016
The final part of my conversation with Suzette McFaul and Sean Janzer about Clean Gold is provided below. We followed along the questions from Rick Rule’s "Guide to Natural Resource Investing" and discussed many interesting aspects of the business. It's been my pleasure to help provide a platform for the Clean Gold story and encourage you to learn more by contacting the company here.
PB: First off, “what are the company’s goals and what strategies will it use to reach them?”
SJ: There are a few goals here. First of all, we’re a company so our goal is to make money, is to make profit for our shareholders. I think I should acknowledge that first and foremost. But we want to create a company that’s sustainable. We have an initial project that we are working on in San Salvador, Ecuador but really what we’re doing is recreating the model of gold processing. We do have the goal of proving that model and showing how financially viable it can be. The strategies we are using to reach that: we are doing a gold processing operation; we are engaging in a joint venture with local miners so as to align our interest and to secure the supply of ore, which we believe was part of the equation that was missing in previous operations that maybe didn't go so well for some publicly-traded companies.
SJ: We are allocating part of our budget to go toward community economic development. We do see and we do have the experience in economic development for communities that are involved in mining, and we see that there's a big need for that. We're not going to be around forever, nor would any mine and we want the community to have a life of it's own beyond that. Further to that finally in terms of strategy, we have a really strong technical team that has been engaged in this region doing gold processing with the types of processing flow that we are proposing to use on this project so we know what our recovery rates are going to be.
PB: Good work covering all the bases there, Sean. It's hard to do that with so many goals. And a riff on that question: What does success look like for the company?
SM: Success for the company is to start making money. That's going to be the first thing. The second thing is to see the community be in a better place. I mean, profitability is number one but what a great feeling, it speaks to the heart and the chequebook. What a great feeling to see a community of people be better! Taking them out of poverty, making their environment better so that their children are better. The social side is just as important. And the social side will continue to provide us opportunities in the future as well.
SJ: And if I can be more specific on my previous answer to that - success does look like processing that is running at capacity 360 days a year, 100 tonnes a day. From the local side/climate, we are looking at getting the women and children out of the mines or out of more dangerous situations. We are looking at eliminating the use of mercury in processing in that region - in our local community and hopefully in the region as a whole. We're looking at getting better healthcare access to the community, and we're also looking at getting banking into the community because they don't have banking right now. There are a number of goals for the community there, in addition to the benchmarks and milestones that we hope to achieve in the business itself.
PB: And, if successful, what could the results per share look like in terms of cash flow after adjusting for any expected equity issuance to get there?
SJ: In this case, what we are offering to investors is going to be a preferred share. So we are offering a fixed rate at participation so it's not going to be diluted by a common share issuance. In this case, if we did for whatever reason - we don't expect to do a further equity issuance nor a financing from a private lender, so it wouldn't be dilutive in either case for a preferred shareholder so they would get a 15% carried interest of net profit, which we expect to be - if, of course, gold price holds the same and US dollar holds the same (US dollar wouldn't affect this) - in the range of $300,000+ US dollars for the entire preferred shareholdings, per year.
PB: Indefinitely over maybe a five to ten year horizon.
SJ: Yes, and that's after getting their principal paid back with a significant amount of balloon payment of interest.
PB: As we discussed in a prior conversation, that balloon payment is a one-time payment of 60% of initial capital and investors also receive 15% of net profits indefinitely. And that 15% could provide a 35% annual return to investors, over the life of the business. Moving on, how are you going to make me money on this deal and when will I make it?
SJ: I'll give a quick overview of the structure again: What we're doing is a combined debenture and preferred share offering to private investors. We're raising $1.5 million US so that will be essentially the principle of the debenture. The interest on the debenture will get paid back first via cash sweeps. Essentially it's a balloon interest but paid as possible of course due to the variability of operations and the price of gold. So $900,000 flat which is 60% of the original face amount will get paid to debenture holders, then the principle backs forming $1.5 million. So $2.4 million total will come off the table to the investors. They still retain their preferred shares which gives them a 15% carried interest in net profits in perpetuity for as long as the operation exists.
PB: And maybe just to specify that this is not an exploration activity. This is working with people who are already doing mining and providing a new way to do the processing of the ore.
SJ: Yes, the ore is there. The gold is there. These people are making their living doing this every single day. Our question, especially from a risk standpoint as an investor - my first question would be: when do I get my risk off the table and everything else is all fun and games, right? And that happens fairly quickly. Under our model, we're looking at 12 months of operations, they can get their risk off the table. This is not a new thing in this community. These people have been pulling ore of this grade for years. What we are doing is simply proposing a method of processing that is more efficient, which actually allows more money to be made off the same amount of ore that's being drawn.
PB: And any comments on what has gone right or wrong in the past with this business model? A little colour regarding the history, so to speak?
SM: What we've done is taken what's gone right which is gold processing with artisanal miners. That has happened around the world successfully. What's gone wrong is the wrong partnership and the wrong model. So we've taken our expertise and experience working with artisanal miners in the past, which has gone very well, and just increased it to make it a better investment opportunity for outsiders.
PB: OK, so all of this builds on your experience with SEF Canada. Did you say 25 years?
SM: 25 years worldwide. 300 communities as far reaching as Mongolia to as far south as Chile or South Africa. It's been an impeccable expertise that we have been successful at. That's what we know we can do right. And we have our technical team, we know they can do right. The only wrong that's happened in the past is the wrong partnerships.
PB: As is this SEF's first foray into for-profit activities, as such?
SM: SEF has always been a for-profit company. We've been working with mining companies and mining communities for profit. We've worked in Ecuador for profit already. So a lot of people ask that question: can you take money out of Ecuador? Yes. Can you make money in Ecuador? Yes. Have we got experience in Ecuador? Yes, as a corporate entity making money there.
PB: So then I guess the point, seeking outside capital is just to scale up the ambition here?
SM: Absolutely, Yes.
PB: Moving on. “What can go wrong? How will I know what is going wrong? And what will you do if it goes wrong?”
SJ: First and foremost, the actual business of processing. There's all sorts of operational risks with any processor. Equipment breakdown, flood, fire, earthquake, HR issues - all those sorts of things. So we've tried to mitigate them as much as we can. So what will we do if those go wrong? We have secured insurance for the actual processing plant itself to insure it against the standard commercial risk including liability. We have redundancies on the equipment. So if you actually look at our Cap-Ex sheet, we've actually purchased redundancies on the equipment so that if something does break down, we don't want to have downtime in the plant. We don't want a 3-month lead time on a piece of equipment coming in from overseas. So we have the redundancies on things that are known issues. And that should give us a pretty good leg up in case one of those things does happen.
SJ: Going down the line of risk, there's also obviously gold price risk. We're sharing that risk with the miners who we're actually buying the ore from, so that does allow us to reduce that risk a little bit. But, of course, it will always maintain a risk and it will affect profitability if you look at it that way. It’s not so much a risk of loss more like a loss of profit or potential profit we could've had.
SJ: There is currency risk. We're dealing in US dollars so believe what you want about the US dollar but that is a fundamental aspect of our business. And then political risk - I think political risk is the one that people always tend to think about first with Ecuador, even though we don't believe that it is a significant risk in this case. So what we've done is actually insurance against the political risk with EDC - a Canadian organisation. And that protects us in case of terrorism, civil unrest, rioting, political seizures, expropriation. Those sorts of things. We've engaged them to cover that risk. How will we communicate if something's gone wrong?
SM: Can I interrupt so I can just take you off base? There are a lot things that we can talk about when things go wrong, and we can talk about civil unrest, and we can talk about all of those things political etc. We are coming back to the SEF side. When you have the community behind you, you have the power that no political arm, no insurance or anybody else is going to cover because the community doesn't want to live without the SEF side. Because we're making their lives a better life.
SM: If somebody came in and said "we don't want you here anymore", the power of the community is going to stand up and actually protest against that. And that's pretty powerful. Whether that's political or other people from other communities. So we feel really well protected and we know because we've seen that happen before. So we've gone through barricades because the community wanted us there. And so I think that's an important piece.
SM: The other thing is that artisanal mining, if you've every looked into it, is informal. They've never paid taxes. And so the local government couldn't be happier to have us as a partner in their local community all of a sudden handing over a cheque that they've never seen before. It's not insurance, but we have to add that into that answer and say that those are really key to making this model work. When things go wrong, we will actually have the back up of the community and the local government.
SJ: We plan to have on-going communication with investors. In the early days, especially, there will be a lot of milestones that we're hitting and we don't want to just keep them in the dark and send them a cheque and they get what they get. We do plan on having periodic distributions made to them whenever there's relevant news.
SJ: We also want to keep them connected to the community with project updates on what's happening there because we want them to be engaged. This is definitely the first foray into processing alongside community but its not going to be the last one, right? Obviously there's also annual financial statements which can be available to them, but the key is we want to in communication with them so that their engaged with what we're actually doing.
PB: It's always hard to speak to the "what will you do if it goes wrong?" part of the question. With mineral exploration, you can pivot or you can search in another area but you are pretty committed to this course of action. Any comments?
SM: Suppose that the miners aren't bringing in ore anymore -- they run out of ore. Well, we know that right now in those regions, we can put at least 6 to 8 particular processing plants. We already know that through the community relationships that we have. The worst case scenario we're going to end up having a line up of miners looking to process their ore, so we open up another plant. If we don't have a line up of people and we're not pile stocking ore, is that there's so many other regions that you could drive to because there's access to the road that will bring us their ore. And because of our SEF relationships, we know that we can bring other people in from other areas to bring us ore if there was no longer ore left in that area.
PB: Great, thanks. Now, the roads in Ecuador have a bad reputation.
SM: Oh, they're brutal. You know, they're dirt roads and you hit your head on the ceiling multiple times.
PB: Well, it may be better to locals driving on them. They may be better at it, in some way.
PB: Moving on, "what is the current liquidation value of your company versus the market cap?". It’s not entirely relevant as a private company currently raising capital, but there is still an idea in this question around the valuing the company’s key assets?
SJ: Well that's a fair question. We're planning to use new equipment. It is all new equipment, and the other smaller capital bits to create the plant. They have a defined value in the market. Of the $1.5M US that is coming in, $1.16M is going into capital assets that would have a market value. You could say that would be partially realizable value, depending on when and where and how you're extracting those assets.
SM: There is intellectual property and there is goodwill. I mean if we were a public company, and we were really valuing this, it would be worth a lot more than the equipment.
PB: And speaking to that, any comments on comparables? It's kind of hard given that this model is distinctly different from the other things that have been done before, but just to ask about that: if you have any comments, on that? Any comments on NPV or IRR stuff?
SJ: To be confirmed on the IRR. I didn't want to run an NPV because I didn't see that there was an appropriate discount rate for this project because there is no history with other companies doing it. I'd prefer to run an IRR and see what that comes out at.
PB: Well, I would think that the ability to reinvest is there so an IRR calculation would be appropriate in that case. Any comments on debt or any of the financial structure behind the company?
SJ: Only the debenture holders. They'll be in first position. They'll be the only significant debt aside from transactional debt. Nothing else.
PB: Great, moving on. “Who else will you tell this story to? How will you tell them? And when?”
SJ: Right now we've got interested parties. We're having ongoing conversations daily with potential investors through private and public individuals. We're speaking with lenders as well, that's part of it. There's always different potential ways to capitalise a company. Our technical team members are doing work on this and they've done a lot of ongoing work on this.
SJ: Aside from those parties, we've also been working hard to engage - and maybe this is a bit ahead of our time - but engaging with non-for-profit entities out there. The Artisanal Gold Council - we've had significant conversations with them. World Bank, the UN - they've all been extremely keen to see this project move forward. They want it to succeed. With us, and especially with the Artisanal Gold Council, we're working in the exact same vein as they are. Our success is mutual. Not only that but if you look at the World Bank and the UN, there's a big move to eliminate mercury. And this is a step in that direction, albeit a small one.
SM: I'm going next week to Washington, DC preaching worldwide about our project and what we're doing. So it's not as succinct. Everyday we're doing this we're doing this particular thing in terms of promotion. But the promotional part is getting out there. We're starting a social media plan. If we go down the path of maybe a crowdfunding operation, I think that'd be big. We did a media release that will be published in January. And then of course, the big launch pad will be able to update all of those people at the end of January at Round Up and the Cambridge conference.
PB: And just a comment myself – I feel like you guys have several stories to tell. It's all really part of one story, but there are a lot of aspects to it. I would think that makes it difficult.
SM: You're absolutely right. There are so many different types of parties that are interested in the project. Today we're really talking about what opportunities can we invite the investor to be able to participate. And that's really the key message on why we're talking today with Peter Bell. There is a world wide convention that says we need to stop mercury use. And we haven't brought it up before but governments are signing - and including the Ecuadorian government - we need to stop using mercury. And they are looking for solutions.
SM: Sean, you mentioned the World Bank. Those are the types of people that need win out of this project. So they are a different story than the investor's story who wants to see the return on investment. The other story is, from the environmental side, we have to talk about community wellbeing on the social side. The other story is what is the success of alleviating poverty in a community. That's a success to a different stakeholder. That's a success to the community who says if there's an earthquake they now have funds to be able to deal with the earthquake. So you're right - the message is different for a bunch of people, but it’s the same thing. We're going to have a successful business and its going to speak to all of those different areas. But first and foremost, if we can get the money in, we can make those things happen; and that's why we're talking to you today.
SJ: As a sidebar, that did remind us of something that we haven't talked about much but you may be interested in – the clean water side of this. Obviously, there has been big news. There have been shots fired here between Peru and Ecuador in terms of the water contamination. It’s a major, major issue. Potentially we're talking about a major political issue here. And, like I said, of course one processing plant is not going to clean up all the rivers in the Amazon; but if this model proves to be economically viable - and as you can see from our numbers, quite lucrative in fact - then this can happen. It will happen. It's an incentive.
SJ: It's like capitalism. This business model is the most efficient way to solve this social problem. It will help clean up the rivers from mercury. That is an interesting angle, and there is a lot of interest from stakeholders on the clean water side of things.
PB: And I would point out as well, this is not a venture for which you will need to raise money again, for this particular business. And that's a big deal.
SM: Yes.
PB: Thank you. We've done it before, but if I can ask you again. “Please tell me about your management team and directors, and particularly about past success in mining and markets.”
SM: Well I am actually running the team and my team is way more powerful than me alone. So as the CEO of the company what I've been able to do is bring the best of the best. On a technical team side, and past successes in mining, the lead is Dr. Marcello Veiga. He's really leading in the technical team. He's got 40 years experience in the artisanal marketplace around the world. And I don’t know of anybody whose got 40 years of that direct experience working with gold processing of artisanal mining. So we're really happy to say that he'd leading that charge of it.
SM: Working with him is Adriana Goncalves, who speaks English, Portuguese and Spanish and she's spent 3 years on the ground in Ecuador working with the artisanal miners and processing their gold. She just got her 2nd Masters degree. I don't know of anybody else who has that much direct experience there. And her thesis shows that she's been able to achieve over 90% recovery rate consistently of gold out of the ore. There's not many people who can achieve that with the artisanal miners.
SM: We also have Javier Nava, who is a mining engineer. He has community experience in Ecuador and was working on the Lundin project. He'll now be working with us on this project. He's been working with SEF Canada. Another for whom Spanish is his first language. He's been super successful. I have to fight with SRK Consulting for his time, but he's part of the directors and shareholders of Clean Gold Solution.
SM: So that's the technical team, but just as important as the technical team, is just that there's three pieces to making this business successful like in any business is that you may have marketing and technical, the market that is the public side, but what about the business side? There's this huge business side that says, whose run a business before that has been successful? So if we start looking at that side of the team, and I sit on that side of the team. I can unequivocally prove to you that using my methodology and running a business you have a better than 80% chance of success, even after 5 years. We don't seem to mention that well enough. But that's my success rate.
SM: We've got the community side, but that's the business side and then on the business side we've got Sean Janzers of the world, whose been working with a multitude of companies. I've worked with him personally for the last couple of years. Companies that needed to be successful through finance and from direction. We've worked together on those great successes in that. We've have Jeff Durno who sits as a partner in Cassels & Brock, but also runs Emprise who is going to deal with all of our CFO activity so they are holding the money. They've got stellar backgrounds in terms of what they are able to achieve.
SM: And the community side, which is our 3rd side. So, we've got the best technical team, we've got the business team, on the community side again - SEF 25 years, 300 communities. Never a failure worldwide. So you can't look for anything that we're missing in terms of our core team. Then we look at our advisory board and we have the likes of Dr. Peter Bradshaw, CEO of First Point Minerals. He’s a geologist and is a Mining Hall of Famer. He worked for Placer-Dome for many years. He has put money into Clean Gold, as an advisory board member. George Ritchie, he's on the fund security side. He's president and CEO of Strand Security. He knows about the markets from the private-equity side and he brings that to the table. We have Jim Simpson, the ex-COO of Peak Gold in Australia. He's a mining engineer and he worked with Gold Corp. He worked with New Gold project and he sits on our board.
SM: We have indigenous expertise because when you are working in communities, you're working with indigenous peoples. Lana Eagle, who is another top Canadian indigenous person who brings that skill set. We basically have every piece of a business covered within our advisory board, our technical team, our business team and our community team. It's well positioned to make this thing happen. And everybody's got skin in the game. How often can you say that? You can appoint people to boards but unless they put skin in the game, what's in it for them? These people have skin in the game. They're shareholders of this particular company.
PB: You mentioned a few people who've been with you for years. Any additional comments on when all of this team has come together?
SM: They already have. We're working together on the Clean Gold project. This business plan was not built without them and all of their input.
PB: But just to say, for how long have they been together?
SM: We've been working together with my advisory board for the past 4-5 years.
PB: And that's the same people that are involved now with Clean Gold?
SM: Absolutely.
PB: Maybe a tangent, but to what degree did this idea come out of prior activities, or where did it come about? Where did the idea come from?
SM: Well, SEF was invited down by the Ecuadorian government to start working with artisanal miners in southern Ecuador. Peru -- I think Sean spoke to this -- fired a shot at Ecuador saying, we're going to sue you because you're poisoning our river -- not that they don't do it themselves -- but they fired the first shot. The first call came to Vancouver, British Columbia from the Ecuadorian government and the Ministry of Mines said “can you come down here and help us? We will pay you to help us.” We sent a team of UBC expert researchers on the ground to start working with the artisanal miners. SEF Canada was invited by the Ecuadorian government, paid for by the Canadian government, University of British Columbia and the processing association in Ecuador. The tiny little processing guys paid for us to come down to their community and help them.
SM: So we went down there and said “OK here we are, we're going to help you.” We helped them and then we got a phone call from a group a couple hours to the north asking SEF Canada to come down and do the same for a new group. The asked “Will you come and help us? We'll put some skin in the game and we'll pay for you to come down and help us.” When we looked at it, we asked what’s going on in your community? Well, they were artisanal miners. They said “It would be our dream to be able to do processing.” That motivated us to take our knowledge, put our technical team together, put this team together and build a business plan that allows us to go into that community, provide our expertise to train them. We need capital now, so we are going to outside markets to share this opportunity to participate in a great return on investment. We've got a winning solution to help those miners and the community. I don’t think there's a better opportunity.
PB: Great, I would ask to clarify about what you did last year. Was that more of a conceptual and consulting piece, whereas now you are actually doing it?
SM: That's exactly it. When they asked us to come down, we said "what are you looking for?" They said they wanted SEF Canada to comedown and help with economic development. In other words, to increase their chances of good enterprise for themselves. At that point, we had a representative on the ground in Ecuador who used to be with the Ecuadorian Government. He went to the miners and asked if they would joint venture with us if we brought the money: “Will they like this model? Can we make this happen?” The answer came back “absolutely, please come in”. He has a letter from the miners saying this is what they want, this is what they will participate in. In the meantime, I have to build a business plan to show how I do I get the money, how do we make this work, how do we get through the technical side of this and bring everything together. Adriana is actually the newest team member and she brings a lot of the technical expertise.
SM: We needed to build a business plan that was as airtight as possible. Our advisory board members went through it with a fine tooth comb. Taking it apart, putting it back together. Where did you get that number from -- every number in that business plan has gone through twenty sets of eyes. Adriana has two Master's degrees – first a chemical engineering degree and now a mining engineering degree. Her mining engineering degree was based on a thesis that is over one-hundred pages, which is full of research that was done on the ground, in Ecuador, processing this ore. All the numbers in our projections are backed up by real numbers that were actually achieved.
SM: That kind of stuff took us a year to come to fruition and make sure that, when we came to the markets looking for a partner for finance, that we had the best possible chance. Failure is not an option. The SEF reputation has been stellar for 25 years and we can't afford to have this not work.
PB: Is there any policy that is aiming to stop the use of mercury in this way?
SM: Mercury has to stop. The worldwide Minamata Convention on Mercury was hosted at the University of British Columbia and I was at it six months ago. Coming around to Washington, DC, it is one of the core issues coming up. We have been talking with the Tanzanian Government, saying "can we have SEF Canada on the ground? We need seven projects." That money is coming from the World Bank, that's not coming from private enterprise.
SM: The difference is that private enterprise people can move faster. They are more nimble and can make things happen. We don't need more research -- you've got to go in and do it. We have that capability. Working with the World Bank -- love it. We love working with governments. It's great that everybody wants to make this happen, but how is it actually going to happen? Getting real money from real people who have a sense of urgency of getting that money back in their pockets.
PB: Big issues come up there around the effectiveness of policy versus private market solutions. Whether you are more likely to stop mercury by telling people to not use it, or by helping find a better way.
SM: It's nice that they are backing us up in their business plan. That's really what it's all about. That message is going to back us up to make sure we're successful.
PB: Alright, the last question here is "who owns this company, how much did they pay for it, and when can they sell it?"
SJ: I can speak to that. It's a bit different because we're not talking about a public company here. To date, this has been totally funded by SEF Canada and the respective advisors and technical team. We're also the shareholders. It has been fully self-funded. There is no anticipation of a sale or a liquidity event. Clean Gold Ecuador 1 will not have any shareholder loans -- there is nothing lingering on the books so we're coming in with a clean slate, if you will.
PB: And the parent vehicle -- I saw that it has $100,000 in it.
SJ: That's the seed capital to cover the incidentals while we're in the process of finalizing this financing. We want to do the metallurgical testing, that's important because it confirms our processing plans.
PB: And the 85% of the profit share, that goes back to the parent vehicle and the management of Ecuador 1.
SJ: Yes, there are some shareholders in Ecuador 1 but the lion's share will go to the parent company.
PB: Well, it simplifies things as a private company there.
SJ: There is no threat of dilution, it is just a share of profits.
SJ: And there is no ongoing costs of being public. That can be a killer for small companies, but we don't face those costs.
PB: If there was an Ecuador 2, then that would be another round of financing -- not trying to roll it in anyway.
SJ: We want to stay under that 100 tonnes per day and we want to contain the risk. Our first investors will get the risk off the table and will have the opportunity to redeploy in that separate company, but that will have to be on it's own merits.
PB: Great, my last question is "how much money do you have, how much money do you need to succeed, and how are you going to get it?"
SJ: Clean Gold Ecuador 1 needs $1.5M US to pull off everything we have talked about. We have a very specific budget. It includes capital expenses, ore costs, operational reserve, and then contingencies. We're doing this by way of private capital raise, primarily with accredited investors. We are giving consideration to using the crowdfunding exemption, but we haven't listed with a portal yet.
SJ: Just as a reminder, the securities that we are actually offering are a preferred share and debenture.
PB: And the detailed budgeting -- how much of a runway is built into that before you are expecting to be operational and pulling in revenue?
SJ: Once we're capitalized, we can put in the orders for the equipment. The lead time on that is 2-3 months, so we are assuming 3 months here. Once the installation of equipment and training of the onsite staff is done, which is done with the UBC partnership as we're getting some experts down there. There is going to be a ramp-up, we're not going to start processing at full capacity right away. Of course, we need to hire a ground staff. That, in itself, is an anticipated minimum of a three month ramp up as we gradually go from 25 to 100 tonnes per day. You're looking at a six month ramp up period to get up to full production.
PB: That’s pretty quick!
SM: The good news is that the gold processing and equipment isn't new. We know what the timeframe is and we have the expertise and experience to be able to wrap that up.
SM: The capital costs do include the manufacturer sending some of their technicians on site to make sure that it is working the way it needs to and that our technical people can work with it the way they need to.
PB: I will point out that it helps to have all the artisanal miners already in operation, so to speak.
SM: They're looking forward to being able to make more money.
SJ: They are hoping it was up and running yesterday.
PB: Any comments in terms of infrastructure beyond equipment, any kind of road build out or electricity or water access?
SJ: That's all included in the capital budget. Tailings, power, all the auxillary items, so to say.
SM: The water and the power is already there. We have budgeted for it, but don’t expect to have to spend that money. Ecuador has a lot of water. There's not that many Latin American countries who can say that 'they have a lot of water'.
PB: If there was some money left over, would you plan to return it to investors or is there some place in the business where you could redeploy it?
SJ: There is a period of time where the big upfront cost, operationally, is the ore. We do need to have the payments for the ore. That is already built into the reserves but, once that is secure on a month-month basis, we are doing cash sweeps and they are first in line to get the cash that would go to payback the debenture.
PB: And, over the life of the business, is there much opportunity to reinvest in the business, or is it really about keeping this one isolated?
SJ: It is a self-contained project. So, any reinvestment would be in a parallel project. Same model, could even be in the same country.
PB: Great, well thanks again for the conversation Sean and Suzette. It is a unique situation of ‘doing well by doing good’. And it makes me think of Rick Rule’s comments that companies would do well to look for ‘corporate social opportunity’ instead of focusing on corporate social responsibility. I will certainly be watching to see how things unfold for you and wish you the best of luck.
SM: Thanks, Peter. Nice to talk with you today. Please give my regards to all your readers.
