This is a full transcript of the interview.

Tom Wallace: Ladies and gents welcome to, this episode is coming to you from the 2017 Sprot Natural Resource Symposium in Vancouver. Joining me today is Teo Dechev, the CEO, President and Director of Mundoro Capital. Teo is an executive and capital markets professional with a career that includes equity research, investment banking, public company directorship, and financing's of over half a billion dollars. She has an MBA from York University, Schulich School of Business and a Bachelor of Applied Science in Geological and Mineral Engineering from the University of Toronto. Today Teo is going to be talking to us about Mundoro Capital and their projects in Eastern Europe, so make sure you've got your pen and paper ready because here is the interview.

Tom Wallace: Teo thanks for joining me.

Teo Dechev: Absolutely thanks for having me.

Tom Wallace: Can you give me a history of Mundoro?

Teo Dechev: Absolutely, so Mundoro today is an exploration company that's very much focused on exploration of the Western portion of the Tethyan belt, which falls in Eastern Europe, between the two countries Serbia and Bulgaria. When we originally came into this district we came in 2011, the idea at the time was we were in the process of divesting one of our assets in China, and at that time we had an interesting opportunity, we had a couple of project generating geologists working in the company that we sent out here and they really spent about a year in the district trying to build up a database of information about really where are there unique opportunities, low hanging fruit for new exploration companies to come into the district.

The Tethyan belt is very well known, but not a lot of people had really come out and dug through the data and so we did that in 2011 and by the end of that year we had identified these 10 projects that we currently have. So we applied for them at the end of 2011 and started to get those licences approved in 2012. What was very fortuitous for us was that Cukaru-Peki was discovered and announced in September 2012, so we were able to build a land package that is really very regional, its large scale, 800 square kilometres is something that typically a small company never has an opportunity to build, particularly in a very well endowed porphyry district and so we were able to do that because the ground was available there had not been a new discovery and people had really overlooked the region.

So, that's kind of the genesis of the programme in Eastern Europe. From then, we had taken the view that this type of a land package really requires a very systematic exploration programme. It's not about going in and chasing one little target here and there, it's about trying to go through the entire package in a systematic way and build the level of data so that you can look at the entire package and make a decision on similar based data. So stream sediments, soil sampling, trenching, drill testing in some areas, putting that all into a database, complimenting that also with ground magnetics, in some areas we had also done CSAMT work, and IP geo-physics.

So that took a long time to build out, so when we got the licences in the beginning of 2012 it really took us a few years to put all of that information together. At the same time, like I mentioned Cukaru-Peki was discovered, there was a reemergence of interest in the district and so a lot of the seniors who are very focused and understand kind of the importance of early stage exploration in known mineral belts, started coming back into the district. So there's lots of opportunities as well in this district now for what I call, M and A transactions, which is either through joint ventures or basically sale of projects, like we saw with Reservoir.

Tom Wallace: Can you go over the projects that you hold?

Teo Dechev: Absolutely, so there are eight projects in Serbia, they're all within the Timok complex. The Timok complex is the dominant volcanic complex where you see those porphyry systems in the Eastern portion of the country along the Tethyan belt. In there we ... basically if you look at the Timok complex we like to separate it into the North and the South. In the North we have four licences that are approximately are about 150 square kilometres, those have been optioned out to JOGMEC, which is the Japanese Oil and Gas Middle Economics Corporation, which is a Japanese fund that has been mandated with really helping fund exploration programmes around the world for Japanese companies that would like to secure also copper concentrates in the future.

So those four Northern projects are very interesting, we've made a porphyry discovery at the very North end in the Zeleznik licence, which is just North of the Majdanpek Mine, which is currently in production. That's a really interesting discovery because it's a brand new discovery, no one had done work there in the past, it's very covered by vegetation, so there's lots of trees there, which was really the interesting opportunity. We discovered two more porphyry centres just North of Majdanpek in our Zeleznik licence. Really the stage that we're at now is to drill it off and try and determine if there is some form of an economic resource there.

So that's pretty exciting, and in terms of more closer to the centre of the Timok complex where the Bor town and the Bor mine, that historic mine that's been in production for a 100 years, around that we have licences and basically again those are part of the JOGMEC option. What's really interesting is that this year after a number of years of trying to build up that data set, what we've discovered is a very large alteration system, you know we announced it to the market in March of this year, 750 metres of alteration. We can see the nice change in the zones of that alteration from argillic to advanced argillic, propylitic, and really what we're looking for now with the next drill programme that's starting next week is the potassic core. That's where the majority of the metal contents lives within these systems.

So that's going to be an exciting programme, then we've got the Zeleznik programme to the North, drilling in both areas. I think that's going to really help kind of put Mundoro in that next position of value amongst our peers.

Tom Wallace: I guess when it comes to jurisdictions, a lot of peoples views on the Balkans might, if they haven't been keeping up with the news, would still be ... when they hear Serbia, they might be thinking, Kosovo, AK47's, all the rest of it, how have things changed from the 90's to where we are now?

Teo Dechev: Right, well there has been a significant change, it is a very peaceful country, and very safe to travel. Eastern Europe is a remarkable place, it's obviously the ex-communist block so there's some kind of, I would say interpretation by perhaps North Americans or anyone in the West, that it's a rugged place, or it's hard to get around. In reality, you can take a flight from London to Belgrade, it's a two hour flight, you can arrive in Belgrade, it's a full city, it's thriving, the Danube is there. They have a lovely restaurant community, art community, the government is very receptive to foreign investors coming in. So really what you see is, what I think, is a culture there that wants to demonstrate to the world that there is real talent, real opportunity, we can certainly see the metal-agenic opportunities in the country, regardless of the situation it's very well endowed from natural resource perspective. The people there are very well educated because of the Communist system, there was a very good schooling structure in place in the country.

From a foreign investment capital perspective it's a very cost efficient place to do business. You can achieve similar goals at probably half the capital investment, that will not last forever, inflation hits every country, but that's kind of the opportunity and a lot of what we see when we go to Serbia and visit the conferences and the local business chambers is that there's a lot of Western-European companies that go there and ... for example, high end tailoring, which requires a certain skill set, they have a lot of production there in Serbia, as well as Bulgaria. Fiat opened up a factory in Southern Serbia, which is another demonstration that you can do high end manufacturing in this country.

So I would say that anyone who goes there, first of all, beautiful jurisdiction, I mean just lovely landscapes to see, lots of farm land. Infrastructure is excellent, roads are very good, you have now a national highway that runs right through Serbia into Bulgaria, which kind of is a main conduit. You have really excellent food, I love the food there, and really good people, people who really want to work with you and I think all of those things ... obviously over time things change but right now, certainly over the last five years that we've been there, it's been a wonderful place to do business.

Similarly for Bulgaria, Bulgaria's already in the European Union, so they've had a lot more infrastructure spending than for example Serbia has, but we certainly see that coming for Serbia. Again, same kind of cost equation, effective labour rates, you can achieve a lot of milestones with kind of half the capital investment that you would in Western Europe for example. Certainly the mineral wealth is very good in Bulgaria, the roads are excellent, there's power lines everywhere, you can get cell phone reception anywhere and everyone pretty much speaks English, so you really don't have a, what I would say a significant barrier to communication the way that you might in other jurisdictions.

Tom Wallace: You pretty much covered all the infrastructure, what about the local work force there? You mentioned that there was operating mines nearby, how will you guys go getting skilled workers there?

Teo Dechev: Well we're very fortunate, there's a lot of good skilled labour there. In Bor specifically there is a, what I would like to call, a 100 year old mining community there. Meaning that the main mine, the Bor Mine has been in operation for 100 years. So what that means is that this entire town, which is the Bor town, of which I believe is around 70,000 people, everyone there understands the purpose of mining and I would say even more so than perhaps we do in Vancouver here. They recognise that these are multi-generational assets that they can bring a lot of wealth to a community, they can create jobs and new opportunities as well. So when you come in as a foreigner in the mineral sector, you're really greeted by a community that already recognises the value proposition of what you're trying to bring. People are always willing to work with you in terms of permitting for land access, for specific areas that you want to drill or trench, and I think that's wonderful.

The same thing in Bulgaria, although you don't have that 100 year old mining community that you have in Bor, there are a number of mines that are currently operating in Bulgari, obviously one of them is Western run, which is by Dundee Precious Metals. But there are other operations that are run by Western-European companies. That just kind of speaks to again an understanding that mining is important in these jurisdictions, there will always be points in time when communities need to understand what the future development will be of a project, but overall I have seen a genuine interest in what's going on, and a willingness to work together.

Tom Wallace: Is there anything else you'd like to cover when it comes to the projects?

Teo Dechev: Well, in terms of the projects, the Southern projects in Serbia, which are not in joint venture with JOGMEC, so those are 100% owned by Mundoro and there's an opportunity for us to also joint venture those projects if the right opportunity presented itself. That's an area that we continue to add value by exploring and demonstrating that there's mineral resources and future targets for drilling there, and similarly for Bulgaria. We've made a porphyry discovery, there's an epithermal gold system as well there and those are very interesting opportunities to continue working on in terms of the next few years. There's definitely no lack of targets to drill in these areas.

Tom Wallace: How are you guys going for cash, and what's the current share structure of the company?

Teo Dechev: Right, so as of the first quarter of 2017 our last announced financial statements, we have 4.2 million cash Canadian, we are currently today trading at about 9.8 million. So that's approximately 6.5 million enterprise value, which I think is considerably less than a lot of the peers that are in the exploration space, that have programmes that are currently running of around two to three million Canadian, even 4 million Canadian. Our burn rate in terms of corporate GNA is quite low, we always try and keep it around 750,000 annually.

There's a really great study by a consulting group in Australia called Midex, you probably know Richard Schroder, who's done some really good work on taking a look at what really over time is the average burn rate of companies. Really what do they need in order to continue generating, or just basically being a public company, and that 750,000 is a pretty, what I would say, good benchmark to kind of compare companies on. That's where we've kind of kept ourselves over the last five years, so I think that's important to note.

So when you look at whose actually spending an exploration budget of around two to three to possibly four million on exploration, and has a low burn rate of around 750,000, and is trading at 6.5 million enterprise value, other than Mundoro I haven't been able to identify another company. I used to be in equity research, I dig through a lot of data, and that, I think that's a really interesting opportunity for investors.

Tom Wallace: What catalysts are coming up in the next year?

Teo Dechev: So what we're doing right now in terms of the drilling with Borsco, that's a very important catalyst, we're going back in, drilling 3000 metres and trying to identify the potassic core of that particular alteration system that we've discovered. That's a very important drill programme for the company. The second one is the Zeleznik resource that we're going to go into and drill a drill fence this year in order to establish a first resource in the first quarter of next year. So those are two very important programmes going on and that's all happening in the next six months, so those are the most immediate catalysts. Then other catalysts coming in would be another joint venture with another company on the rest of the package or more joint ventures on the package. Certainly our own exploration efforts in terms of more discoveries.

Tom Wallace: What is the level of management and inside ownership, and do you have any strategic or institutional investors beside JOGMEC?

Teo Dechev: So Mundoro is primarily a retail traded and invested company, there are very few institutions that can go down to a 6 million enterprise value company, that's just the reality of investing. I think a lot of Bay street knows and has heard of Mundoro but because of our market cap size, it really does not necessarily speak to an institutional portfolio. So there are no institutional investors, however there are a number of high net worth individuals and family funds that are in the stock, those represent about 40% of the company.

Management and Directors and senior officers are about 8% of the company, and the rest I would say just be a very wide and dispersed retail base, which are actually a very good retail base because they do create a lot of liquidity in the company so we typically trade around 100,000 shares a day down to maybe on very slow day about 20,000 shares. So there is liquidity, we've had one shareholder for example who bought about 8% of the company, just through the open market, and had no problem in accumulating that position. So if one really had the conviction and the interest to purchase, I think very quickly you could build up that kind of position in the company.

Tom Wallace: Could you go over the management team and their skills, experience, qualifications that they have, that can really help you guys out?

Teo Dechev: Absolutely, the team is very important and local experience is critical. From myself personally having a background in equity research and investment banking, commodity trading, I've been with Mundoro for 10 years and taken it through this transition of getting it into Eastern Europe. I'm obviously from Eastern Europe, so I really understand the mindset of the district, and that I think has been very helpful.

In terms of our local team there we have built up a team that's all local, and has amongst the team we have well over 50 years of experience in exploration. That's primarily from three exploration managers and the idea here is this group has been in Rio Tinto, Anglo-American, Newmont and they bring a knowledge set with them on running programmes, running systematic programmes, recognising the mineral systems, and having done that on other parts of the district can bring that knowledge to our specific ground packages. So that together with the capital markets experience, what I like to call the perfect fit for a small company, you really need both components. It's great to have a strong technical team, but you need the market awareness as well, that can raise capital and communicate with the market. You don't want just the communications team, you want a team that can execute well, and I think it's also really important to have a team that works together for a long period of time.

We've been together for five years, you see a lot of start ups in the exploration space that bring in technical advisers, here and there, oh we've got an expert from this part, which is great, you do need to bring in experts on specific time frames but you really need to have a cohesive team that's worked together in order to really come and be able to get through large programmes. Inherent square kilometres is a tremendously large package and you need to be very disciplined in terms of how you explore.

Tom Wallace: Is there anything you'd like to finish off with, anything that we might not have covered?

Teo Dechev: Well I think the main thing is just to leave a message for potential investors who are looking at this district. That it's I think a daunting task sometimes to retail to try and filter through companies. Having been in equity research and I have a mining engineering degree, I have an MBA, I worked in the industry for 22 years now, it's not easy particularly when stories are early stage in exploration. It's a very kind of finite scope of experience and very few people have that experience, and so I sympathise with retail investors in trying to understand, "Wow there's 2000 companies, really what's a good one, what's a bad one?" Coming to these conferences like Sprot is great, but at the end of the day I think you really have to have confidence in the people that are running these companies, in the technical team that's working the ground, understanding that they have to be in a good district, I mean that's extremely important, and recognising is the value proposition still there? Certainly from our point of view at 6.5 million enterprise value, the value proposition is definitely there.

Tom Wallace: Teo where can investors find out more about Mundoro?

Teo Dechev: Well they can absolutely call me, that's never an issue, just call us on ... in Vancouver or send us an email. Send it just directly to or go onto our website and fill out the contact us form. We always answer questions and it's absolutely just give us a call on the phone and we're always there to pick up.

Tom Wallace: No worries, last question, who would you consider to be one or maybe more mentors, specifically within the junior mining sector? Who do you look up to? Or who have you trained under?

Teo Dechev: Well unfortunately he passed away a couple of years ago, but Pat Sheridan, when I first graduated from university I started working for him and he has ... he's kind of a legend in the industry because he was really doing exploration in the junior company context, you know going right back to the 1960's. I remember walking into his office the first I met with him and he showed me a million dollar cheque from Tec that he had received and he had never cashed. Which I'm sure he did, but he said he never cashed it, and it was a very interesting opportunity right in the beginning of my career to work for someone who had been so successful and to recognise what it took in order to really communicate with the markets and explain to them what exploration is. Why are you investing in these companies? What is it that you're trying to achieve from this investment? How can we work together in order to kind of reach that goal? He was a tremendously wonderful and generous person with knowledge and I gained a lot of information from him. He became one of our biggest shareholders in the company, so I think he's definitely my best mentor.

Tom Wallace: Teo thanks for joining us.

Teo Dechev: Yes, absolutely.

Tom Wallace: Cheers.

Teo Dechev: Thank you.

Tom Wallace: Ladies and gents you can find all the links for today's episode in the description box below. I'd encourage you all to head over to and check out the company's presentation. Teo has the backing of Sprot and Adrian Day as shareholders, and the company presents true value in the junior exploration sector. I'd also encourage you to head over to and become an insider, it's absolutely free and you'll get exclusive access to content that I won't be publishing elsewhere. 


Tom Wallace