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Justin Tremain – Renaissance Minerals

Thursday, October 18, 2012

ONE OFF THE WOOD: On his way home from the Cambodian gold project Renaissance Minerals (ASX: RNS) managing director Justin Tremain stopped by to update us on the company’s recent activities.


If we were to have had this conversation six months ago we would be discussing Renaissance Minerals as an Australian-focused exploration play, now you’re all about Cambodia, what happened?

We listed two and half years ago on the back of our large Western Australian landholding, the Eastern Goldfields project, which is located northeast of Kalgoorlie.

It is an early stage exploration project and we had always been looking for another, more advanced project; one that offered excellent exploration potential that would reflect the expertise and track record of the people involved in the company.

Cambodia is a long way from Kalgoorlie. What attracted you in that direction?

We had been looking at Southeast Asia, as we considered a lot of countries there to hold some great geological opportunities, but some of those countries do have their challenges.

We became aware of the Cambodian gold project that OZ Minerals had – it was an old Oxiana project – and for various reasons it didn’t really sit within the strategy OZ Minerals has, which is now more focused on large scale copper projects.

So the project had been sitting unloved with OZ Minerals for some years.

Cambodia is a democracy with a stable government that is pro-foreign investment, whether it is mining or other industries, with one of the world’s most favourable foreign investment policies in place.

This means it is possible to obtain security of tenure and the country is highly-prospective.

Due to its unfortunate history, however, it has remained one of the most under-explored countries in the region.

It sounds like it is one of those projects that could be wasted in the portfolio of a larger company as it can too easily be denied the attention it deserves, which a smaller company, such as Renaissance can give it?

That’s right. The project is not big enough to capture the interest of a bigger company like OZ Minerals and, being a gold project, is the wrong commodity.

For us the opportunity was one that just doesn’t come up all that often.

Why was it such a great opportunity?

The project came with a significant resource of 12.6 million tonnes at 1.8 grams per tonne for 729,000 ounces of gold that is contained within just one deposit, the Okvau deposit.

Not only does the potential exist to grow that one deposit, potential also exists to make further discoveries as well.

Was the Okvua deposit identified by you or by OZ Minerals?

OZ Minerals was really the first ‘western’ exploration company to explore and identify the potential of Cambodia.

They picked up two exploration licences, the first of which was Okvau, and the adjoining licence.

Those two licences cover around 400 square kilometres, and we would argue, given the early recognition by Oxiana, OZ Minerals were able to go on and pick up some of the most prospective ground in the country.

Subsequent to that more ground was added, eventually giving us around 1,000 square kilometres in that prospective ground.

When was the Okvau deposit first discovered?

In 2007; Okvau was the first prospect OZ Minerals drilled, which they drilled out to the current resource, which we inherited.

Was there any reason they didn’t expand their drilling of the project?

The company went through some corporate restructure during the GFC, resulting in a shift of focus to pure copper assets.

This meant they really only conducted limited drilling beyond Okvau, despite the exploration potential that existed there.


How have you approached operating in a different jurisdiction?

One of the beauties of the acquisition was the project came complete with an, in country, operation team, all of which we have been able to retain.

They have ready-established local relationships with the government and local service providers.

Most importantly they have an intimate knowledge of the project. Some members of the team have been working on the project from day one.

That allowed us, pretty much from the first day we became official owners of the project, to commence drilling straight away.

That sort of team usually takes a long time to establish at home, let alone in a foreign jurisdiction.

How much drilling have you been able to do so far?

OZ Minerals conducted around 24,000 metres of drilling within the Okvau licence, of which about 22,000 metres accounted for the resource.

Since May, when we assumed ownership of the project, we have completed a further 6,000 metres of drilling.

So we have increased the amount of drilling at the project by around 25 per cent in the first six months we have been there.


Are there any seasonal restrictions to working in Cambodia?

The west season runs from May / June through to around October / November, which has restricted us in what we have been able to achieve so far.

It curtailed any opportunity to get out and enjoy free access to the rest of the ground, which has meant that although we have been active, the drilling we have completed has mainly been step-out drilling around the Okvau deposit.

We haven’t, as yet, been able to drill other targets, which we consider have the potential for further discovery success.

Is that what you intend to do with the funds from the recent capital raising you completed?

We raised $10 million, combined with our existing cash balance allows us to take care of a couple of matters.

The first is the finalisation of a payment we still have owing to OZ Minerals.

It also provides ample funds for the next 12 months of drilling we intend carrying out, the majority of which will be on regional targets throughout the upcoming dry season.

OZ Minerals have managed to maintain a strong presence?

Part of the deal was that OZ Minerals came in as one of our major shareholders.

They still see a lot of value in the project, which is probably why they have been a strong supporter of the raising we have just completed.

I think they want to keep their foot in the door and participate in the upside of the project; it’s just that it didn’t fit in their current strategy, which is to be a copper company.

What does all this mean for your domestic projects?

Our focus is on Cambodia because that’s the project we recognise as being the one we can bring to development quickest.

We have divested our Southern Cross project via a joint venture with Southern Cross Goldfields.

That leaves our Eastern Goldfields landholding as our other major asset.

We still consider it to be of much value to the company simply because anybody would struggle to put together such an impressive land package.

We’re definitely not looking to divest, or sell it of at this stage, even though we have had some interest in that regard since we announced our focus shift to Cambodia.

At this stage, it would appear the Cambodia gold project is the best chicken to place your eggs in?

The Cambodia gold project is ahead of the Eastern Goldfields by 729,000 ounces of gold and the relatively small amount of drilling we have completed so far has demonstrated there is more to come from the Okvau deposit.

We can see those ounces a lot more clearly in Cambodia than what we can in WA.