AIBC Summit, 20 May 2009, Sydney
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Transcript of AIBC Summit, 20 May 2009, Sydney
AIBC Summit, 20 May 2009, SydneyAIBC Summit, 20 May 2009, Sydney
BHUKIA Gold (-Copper) Deposit, Rajasthan, INDIABHUKIA Gold (-Copper) Deposit, Rajasthan, INDIA
Lessons Learnt from 5Lessons Learnt from 5 Years Years
Exploration of a Remarkable DiscoveryExploration of a Remarkable Discovery
AIBC Summit, 20 May 2009, Sydney
Start-up ConceptStart-up Concept
• Attracted by under-explored gold endowment in India
• Entry barriers coming down
• JV partner (NRI) with credentials & ‘connections’ and exciting exploration projects (incl. Bhukia)
• Sole-focus Newco set up late-2004
• 2-3 year drill-out Bhukia
• List on London-AIM, mark cap expectation A$+60 M
AIBC Summit, 20 May 2009, Sydney
PropertiesProperties
• Rajasthan main focus– Jagpura Project ,
Gold (70%)
• Applications pending elsewhere– Gold, b/metals,
diamonds (100%)
AIBC Summit, 20 May 2009, Sydney
OutcomesOutcomes
• Initial 2-3 year exploration success; rapid build-up in Gold Resources
• A$16.1 million private equity (31.36 M shares)
• JV partner runs into permitting problems; our ‘connections’ not as good as we had expected
• Irrational and illegal discretionary actions taken by Rajasthan Govt agency
• After $7 million spent, can’t get next level permits!
• New Rajasthan Govt. – a ray of HOPE!!??
AIBC Summit, 20 May 2009, Sydney
Drilling at BhukiaDrilling at Bhukia
at Panch Mahuri Zone
at Mahi Zone
AIBC Summit, 20 May 2009, Sydney
BhukiaBhukia
Ancient Workings
Panch Mahuri
Delwara
AIBC Summit, 20 May 2009, Sydney
BhukiaBhukia
Ancient Workings
Timran MataLargest Ancient Open Pit
in drainage gully
Person standing at
edge of open pit here
AIBC Summit, 20 May 2009, Sydney
Bhukia Ancient Workings
Mortar stone
PestleGold Tailings Mound
AIBC Summit, 20 May 2009, Sydney
Wealth Creation by Exploration…Wealth Creation by Exploration…BUTBUT
2004 2005 2006 2007 2008 2009
Gold Resource 1.74 Moz in
situUS$1.5 Billion
Exploration TargetPhase 1 is +5 Moz
Doldrums
3-Year PermitsExploration going well
Permitting delaysLegal
doldrums
Will there everWill there everbe a gold mine?be a gold mine?
AIBC Summit, 20 May 2009, Sydney
Our Experience ……. EnigmaticOur Experience ……. Enigmatic
• Legally granted permits
• 2-3 years positive exploration, $7 million spent
• Then Rajasthan Govt. reneges on next level of permits
• Unprincipled discretionary actions … Unbelievable!
• Tried reasoning and negotiation
• Legal challenge ………… new Govt………some hope now
AIBC Summit, 20 May 2009, Sydney
India Mining SectorIndia Mining Sector
• Slowly opening up from mid-1990s
• 100% FDI …..but……no foreign-run mine yet!
• Fragmented industry, State-run agencies can veto investment
• New National Mineral Policy still not legislated
• A principles-driven policy difficult to achieve – no political consensus
• Still some underlying resentment to private enterprise and FDI despite policy pronouncements to the contrary?
AIBC Summit, 20 May 2009, Sydney
What now for our JV?What now for our JV?
• Need Govt support, not more hurdles!
• India needs a minerals success story
• Our JV gold development project could provide choices for future generations ……
AIBC Summit, 20 May 2009, Sydney
Lessons Lessons LearntLearnt
• Spend slowly
• ‘Educate’ bureaucrats and politicians along the way to subdue expectations
• Don’t assume laws, natural justice, logic and reasonableness will prevail in permitting matters
• Process-driven business environment, outcomes appear secondary at times!
AIBC Summit, 20 May 2009, Sydney
BureaucracyBureaucracyThe system works…….just don’t hold your breath
AIBC Summit, 20 May 2009, Sydney
Road BlocksRoad Blocks
Expect them…….. They are a dead set certainty
Organized Chaos……..not to be confused with Disorganized Chaos!
AIBC Summit, 20 May 2009, Sydney
Infrastructure……….Infrastructure……….………………
Interrupted!Interrupted!
Things are improving ...but slowly
AIBC Summit, 20 May 2009, Sydney
Have Patience……Have Patience……..….and ..….and
PerseverancePerseverance
The Brits couldn’t really change India in 200 years
So what makes you think you can!?
AIBC Summit, 20 May 2009, Sydney
Many ThanksMany Thanks
RajasthanWonderful land of arid beauty and ancient palaces
IndiaExcellent untapped mineral potential
But…..
Plan B for IGLContinue to assert our legal rights………New Business outside of India to spread risk