Interview with Myles Campion

The Vox Markets Podcast today was very good.

Miles appears to be a rare hybrid – very experienced in geology as well as finance and investment. A very good combination to have on the FCR board.

The Toral resource in Spain is clearly a very sizeable asset with an already existing compliant  NI 43-101 resource estimate of 8.6mt @ 10% – described by MC as a very good start.

Miles believes the company is undervalued and states that it is one of the reasons he joined the FCR board to take the asset it to where it should be.  Improving FCR’s market capitalisation was my interpretation. At this point in the podcast I could  not help but think that there needs to be a big economic interest and incentive for Myles and Laurence to push FCR to the limit in the future – and that this will no doubt come in the form of share options once they have got the company on an even keel. Note at this point they are not taking salaries! Brownie points indeed from all shareholders IMO. I hope this gets rectified in the new year.

The Toral asset benefits from an existing NI 43-101 and MC stated the intent to get the Toral asset stamped with a world recognised JORC 2012 resource report. My interpretation is this makes it easier for a wider range of companies, globally,  to show interest in the Toral asset.

In the recent Spain visit, Miles and the independent Addison Mining Services (charged with preparing the JORC 2012) reviewed cores –and discovered further assays – some of which are in the DB some of which are not. These are now being incorporated. My interpretation was that this was good news.

@3:10 in the recording Miles talked about the  Pictures from Laurence on VOX and said core was running at 30% Lead  Zinc-  strewth! – I had to play this several times to see if I heard that correctly! Is this anomalous? Either way he is also pushing the Silver angle and believes the silver grades are also very good and will be good for the asset. Let’s not jump the gun as shareholders, the Zn-Pb asset alone is very good, silver is a nice bonus.

In terms of comparable assets Myles mentioned that both the size of Toral and grade of mineral is very good – and that is’s a very good position to be in. He mentioned comparable assets in Italy – listed companies – e.g. 3.3m tonnes at 6.5% with a market cap 3-4 times FCR (I believe this is Energia quoted on ASX recently renamed to AltaZinc (‘to reflect the business they are now in’) with one asset – the Gorno Project – having a JORC 2012 which is where the key comparison is. Their remaning assets have no NI 43-10 or JORC 2012. We have Toral with 8-9Mt @ 10% (or more?) so go figure! It’s easy maths! For the record, as of 15th December Alta Zinc’s Market Cap is £8.13m and they have a great Zinc story.

Miles also mentioned that Central Asia Metals bought a Zinc asset in North East Macedonia [called Lynx resources] which was ‘similar’ to FCR’s but that FCR have a better grade. The SASA CPR is here. The Toral resource does indeed have superior grades of metal (over double), but smaller tonnage.  However what can be extracted is a function of grade and tonnage and one could argue that it is more efficient to mine higher grade  material!  so we’re getting there through far superior grades. Add in Lago (eventually) and we will likely exceed IMO.  The other difference is that the Macedonia asset is mature, and being mined. Even so, the CAM asset was sold for $400M which probably tells you where Myles head is at! No doubt there will be other mining companies out there who would see the Toral asset as an opportunity to put in best practices and machinery into a former mining area which has the skills and infrastructure to turn this gem into a working asset. Knock off a few quid to set up the mine (I jest) and there is a value in Toral which is way above the current £2m market capitalisation we currently have 🙂 IMO.

Note: The EBITDA for the first 6 months of 2017 for Lynx Resources was 61% (unaudited).  In addition, in 2016, the Lynx Resources Mine – SASA – produced 783,000 tonnes of ore which generated 22,515 tonnes of zinc in concentrate and 28,955 tonnes of lead in concentrate – which I think is about 6.6% overall and we have 10%+.  The SASA mine also has silver  as potentially does Toral. It looks to me like we are heading for a direct JORC 2012 comparison with the SASA mine but without the SASA mining operation.   The SASA mine is also one of Europe’s largest Lead-Zinc-Silver mines – so that gives you an indication of the size of the Toral asset. Maybe Lago will be similar in the future..?

Miles mentioned corporate restructuring activities and efficiencies to come. He said FCR will maintain the AIM listing, will review the other two on ASX and JSE and all operations to create efficiencies and to focus on the asset. My guess is that JSE and ASX will eventually be ditched, operations will regroup into the UK (great for the majority of shareholders and shareholder engagement) . This will likely save a large chunk of cash. He mentioned focusing on the Toral asset – I like it. IMO if the expense does not contribute towards FCR’s mineral assets like Toral or Lago then don’t do it! – be ruthless. In the meantime focus purely on Toral guys…

Summarising, Miles said the FCR Market capitalisation is low, but Toral is a well-advanced big enough asset in the right commodity, in a stable country which will warrant investment and scope for further expansion (which I interpreted as tonnage) as well as possible JORC 2012 silver possibilities which is an added bonus. Miles also mentioned the management team of him and Laurence Read which have done a lot in a short space of time and they will push for further advancements in the company. I believe they can do it.

With regards to the name ‘Ferrum’ I think there was a strong hint that the name will be changed. Anything that ties a company to the name of the resource type is not the way to go in the future IMO.

Given Miles financial and geological background I get the ‘feeling’ Miles knows the asset is better than the already compliant NI 43-101, and is worth a large chunk of money which at the moment is not recognised by the market.  I hope the JORC 2012 knocks it out of the park. I expect it will.

In the meantime I am convinced there are players taking advantage of the low share price, without moving the market whilst sentiment has been low. Hopefully MC and LR are starting to put things right. We shall see. I continue to accumulate. DYOR. IMO. GLA.

 

Ferrum Crescent – In Summary …Assets speak louder than words…

Having recent successes with ANGS and TLOU both of which have now bagged,  a recovery play that has really caught my attention is Ferrum Crescent. This share has been battered in the past and I could hear shareholder towels being thrown in – not a great place to be. However those that have stayed the course might be in for a surprise. Now with a change of management strategy, and on-boarding of an experienced exec director in the form of Myles Campion, and a recent placing in which Colin Board (of Galileo resources, Xtract Resources, Jupiter Platinum etc fame) managed to get 12% of the company I am of the opinion that it has turned the corner. I have worked with several companies over the years on their strategy and it makes sense to me to onboard an experienced shareholder unlikely to get emotional and sell on a whim. Not all shareholders will be happy but for the record – I am :-). The Toral asset is going to be great IMO

As usual I am accumulating large volumes on a very small number of companies  – as I always do – and Ferrum is one of them.

If there is one video to watch I would recommend this one …

Rather than reinvent the wheel I also saw this posted on III by Dickie3times (great name :-))  – and it’s a neat summary

Ferrum Crescent Limited tells Proactive they’ve now completed a program of six holes at the Toral project in Spain – all of them returning visually identified lead-zinc intersections.

Results as good as hoped “Every hole gave us visual confirmation on lead-zinc intersection and it doesn’t really get any better than that,”

“We will use that and the historical drilling results to see what’s going on at Toral.”

Plans to drill a further three holes have been shelved after new geologist Myles Campion [and now Executive Director – i.e board member] assessed that it has enough information already, with the next phase of the exploration possibly to be to assay some of the historic core.

Historical drilling
“There has been a large amount of historical drilling conducted at Toral which returned significant lead-zinc intersections, and we are now enhancing our understanding of the structure and definition of the deposit in a cost-effective manner”.

“While the assays from the latest drill campaign are submitted and returned over the next six weeks, the company has sufficient information in the meantime to progress with designing the next stages of further exploration at Toral and to examine economic comparators for a potential future lead-zinc mining operation”. “A key focus for our geological team is to assess the possibility of defining overlapping planes of lead-zinc mineralisation concentrated within the project area. I look forward to providing further updates on our progress in due course.”

Visble intercepts
House broker Beaufort Securities noted that Toral currently has a combined (indicated and inferred) resource of 8.7Mt (million tonnes) with a weighted average grade of 10.7% (lead and zinc).

Intercepts of visible mineralisation from all six drill holes within 200 metres from surface suggest the group’s hypothesis of known mineralisation at depth linked to shallow mineralised features is correct.