1 00:00:04,040 --> 00:00:06,529 Sean Aylmer: Welcome to the Fear and Greed Daily interview. I'm Sean 2 00:00:06,559 --> 00:00:09,560 Sean Aylmer: Aylmer. Gold has a reputation as a safe haven for 3 00:00:09,560 --> 00:00:13,080 Sean Aylmer: investors when there's global uncertainty like we've seen in recent 4 00:00:13,080 --> 00:00:16,880 Sean Aylmer: months, the gold price generally climbs. In the latest case, 5 00:00:17,200 --> 00:00:19,480 Sean Aylmer: the war in Ukraine has triggered a jump in the 6 00:00:19,480 --> 00:00:23,130 Sean Aylmer: gold price to above 2000 US dollars an ounce but 7 00:00:23,130 --> 00:00:25,430 Sean Aylmer: how much attention does a miner pay to the price 8 00:00:25,489 --> 00:00:27,700 Sean Aylmer: of gold on a day to day basis at least? 9 00:00:28,030 --> 00:00:30,070 Sean Aylmer: After all, a gold mine is very much a long 10 00:00:30,070 --> 00:00:32,909 Sean Aylmer: term project while the price of the metal itself can 11 00:00:32,909 --> 00:00:36,520 Sean Aylmer: fluctuate day by day. Dennis Karp is the Executive Chairman 12 00:00:36,530 --> 00:00:40,790 Sean Aylmer: of ASX listed gold and silver miner Manuka Resources. Dennis, 13 00:00:40,790 --> 00:00:41,880 Sean Aylmer: welcome to Fear and Greed. 14 00:00:42,390 --> 00:00:42,750 Dennis Karp: Thanks very much, Sean. 15 00:00:44,010 --> 00:00:46,190 Sean Aylmer: I would like to get a 101 on gold and 16 00:00:46,190 --> 00:00:48,570 Sean Aylmer: silver mining from you, which I will get to in 17 00:00:48,570 --> 00:00:52,070 Sean Aylmer: a moment but upfront, how important is the price of 18 00:00:52,070 --> 00:00:57,150 Sean Aylmer: gold to someone operating a mine? I know investors buy 19 00:00:57,150 --> 00:01:01,140 Sean Aylmer: and sell, the market leaders, the Newcrests and that as well 20 00:01:01,140 --> 00:01:04,450 Sean Aylmer: as Manuka Resources and all those other gold mines on 21 00:01:04,450 --> 00:01:07,280 Sean Aylmer: the price. But how much do you care about it and on a day 22 00:01:07,280 --> 00:01:08,240 Sean Aylmer: to day basis? 23 00:01:09,090 --> 00:01:14,030 Dennis Karp: We watch it extremely closely. For us above 2,200 Aussie 24 00:01:14,030 --> 00:01:18,399 Dennis Karp: gold so at the moment with the gold price where it's been 25 00:01:18,400 --> 00:01:23,080 Dennis Karp: over 2,800 Aussie dollars per ounce of gold, but above 2,200, 26 00:01:23,080 --> 00:01:26,100 Dennis Karp: it becomes very profitable for us. So 2,500 was a 27 00:01:26,100 --> 00:01:29,360 Dennis Karp: target of ours and we've recently been able to lock 28 00:01:29,360 --> 00:01:34,100 Dennis Karp: in some sales at the 2,750 to 2,800 level, which has 29 00:01:34,100 --> 00:01:37,060 Dennis Karp: been fantastic. So we do watch it closely and we have a hedging 30 00:01:37,060 --> 00:01:42,209 Dennis Karp: program which can be triggered if we feel the circumstances arise. 31 00:01:46,050 --> 00:01:48,040 Sean Aylmer: Okay. So Manuka, tell me a little bit about that. You operate out of the Cobar region in Western New South Wales. 32 00:01:48,390 --> 00:01:51,310 Dennis Karp: That's right. We in the central west, we have two projects. 33 00:01:51,310 --> 00:01:55,440 Dennis Karp: We have the Mt Boppy gold project, which is about 50Ks 34 00:01:55,510 --> 00:01:58,920 Dennis Karp: east of Cobar and then we have the Manuka... So 35 00:01:58,920 --> 00:02:03,340 Dennis Karp: we prefer the honey version of Manuka, as opposed to 36 00:02:03,690 --> 00:02:08,310 Dennis Karp: the Canberra version. We have the Manuka or the Wonawinta silver project, 37 00:02:08,870 --> 00:02:14,290 Dennis Karp: which is about a hundred kilometres south of Cobar. We've been running 38 00:02:14,290 --> 00:02:18,639 Dennis Karp: both projects together. We've been mining and processing gold from 39 00:02:18,639 --> 00:02:22,380 Dennis Karp: Mt Boppy and we are just about to start production on 40 00:02:22,380 --> 00:02:25,610 Dennis Karp: the Wonawinta silver project, which will be the largest primary 41 00:02:25,610 --> 00:02:27,160 Dennis Karp: producer of silver in Australia. 42 00:02:28,240 --> 00:02:31,929 Sean Aylmer: Wow. Okay. So, we're going to go to the 101 stage for my 43 00:02:31,930 --> 00:02:35,270 Sean Aylmer: sake here, if you don't mind, Dennis. Gold and silver, 44 00:02:35,490 --> 00:02:38,710 Sean Aylmer: are they normally mined together? Are there many companies that 45 00:02:38,710 --> 00:02:39,329 Sean Aylmer: do both? 46 00:02:39,660 --> 00:02:42,619 Dennis Karp: Silver is normally a byproduct. It normally travels with lead 47 00:02:42,620 --> 00:02:45,780 Dennis Karp: and zinc or some of the other base metals, whereas 48 00:02:45,780 --> 00:02:48,380 Dennis Karp: gold can be mined, due to the value of gold, it 49 00:02:48,460 --> 00:02:51,109 Dennis Karp: can be mined as a primary product in its own 50 00:02:51,110 --> 00:02:55,790 Dennis Karp: right. Our Mt Boppy gold project has been running for over 51 00:02:55,790 --> 00:03:00,480 Dennis Karp: a hundred years now between 1895 and 1925, it really had its heyday. 52 00:03:00,480 --> 00:03:04,709 Dennis Karp: It produced 500,000 ounces of gold in that time at 53 00:03:04,710 --> 00:03:07,510 Dennis Karp: a grade of around 15 grams, which is almost half 54 00:03:07,510 --> 00:03:12,220 Dennis Karp: an ounce and we've been mining it over the last, mining and producing 55 00:03:12,220 --> 00:03:15,510 Dennis Karp: from it, over the last two years and actually we've been, 56 00:03:15,550 --> 00:03:19,560 Dennis Karp: even though we call ourself a gold miner from that area, 57 00:03:19,560 --> 00:03:23,619 Dennis Karp: we actually have been producing pretty much 50% of our 58 00:03:23,660 --> 00:03:26,210 Dennis Karp: output has been gold and 40% of the output has 59 00:03:26,210 --> 00:03:30,570 Dennis Karp: been silver but in those quantities, silver doesn't make much 60 00:03:30,570 --> 00:03:34,200 Dennis Karp: material difference to what you received to the ultimate revenues 61 00:03:34,620 --> 00:03:34,810 Dennis Karp: you receive. 62 00:03:35,370 --> 00:03:38,250 Sean Aylmer: Okay. I want to get onto that, the push that 63 00:03:38,250 --> 00:03:39,750 Sean Aylmer: you are going into silver over in a moment but I'm 64 00:03:39,750 --> 00:03:41,930 Sean Aylmer: just at Mt Boppy. I'm just interested in that particular 65 00:03:41,930 --> 00:03:47,150 Sean Aylmer: mine. Can you restart mining there after a gap of 66 00:03:47,420 --> 00:03:51,100 Sean Aylmer: almost a hundred years or getting towards that because of 67 00:03:51,100 --> 00:03:53,940 Sean Aylmer: technology? What is it that makes you go back to 68 00:03:54,600 --> 00:03:58,690 Sean Aylmer: Cobar and 50 kilometers east of Cobar and decide actually we can 69 00:03:58,690 --> 00:04:02,040 Sean Aylmer: get more gold out of this disused mine effectively. What 70 00:04:02,040 --> 00:04:02,230 Sean Aylmer: is it? 71 00:04:02,230 --> 00:04:06,110 Dennis Karp: So I really short circuit in the story. It has 72 00:04:06,110 --> 00:04:09,360 Dennis Karp: been mined in the seventies at Mt Boppy and then again 73 00:04:09,360 --> 00:04:14,300 Dennis Karp: in the 1990s and there was a brief exercise around 74 00:04:14,300 --> 00:04:17,910 Dennis Karp: 2007, 8 but we've been able to go back in there 75 00:04:18,050 --> 00:04:22,380 Dennis Karp: now or we started processing from Mt Boppy in April, 76 00:04:22,410 --> 00:04:26,099 Dennis Karp: 2020 due to the higher goal price, due to the fact that 77 00:04:26,370 --> 00:04:31,910 Dennis Karp: recoveries have improved. What we've been basically focusing on is 78 00:04:32,230 --> 00:04:35,960 Dennis Karp: historically Mt Boppy was an underground mine so lots of 79 00:04:35,960 --> 00:04:42,789 Dennis Karp: scopes and tunnels and shafts and so on. We've been going in 80 00:04:42,839 --> 00:04:47,279 Dennis Karp: drilling and blasting and removing five meters of material of 81 00:04:47,279 --> 00:04:50,740 Dennis Karp: ore at a time, which brings up all the old 82 00:04:50,740 --> 00:04:55,100 Dennis Karp: historical timbers, that's an opportunity in themselves. That's what we've 83 00:04:55,100 --> 00:04:58,250 Dennis Karp: been doing. We've been taking what was an underground mine 84 00:04:58,520 --> 00:05:02,720 Dennis Karp: and converting it into an open pit mine, more than an 85 00:05:02,990 --> 00:05:03,130 Dennis Karp: open pit mine. 86 00:05:03,370 --> 00:05:05,431 Sean Aylmer: Yeah. Okay. 87 00:05:05,431 --> 00:05:08,750 Dennis Karp: We've just been processing... Sorry, to cut in Sean but we've just been really processing 88 00:05:08,750 --> 00:05:12,500 Dennis Karp: and extracting what the very generous old timers left behind. 89 00:05:13,370 --> 00:05:18,980 Sean Aylmer: Right. Now the idea that you're doing gold and silver but 90 00:05:18,980 --> 00:05:21,160 Sean Aylmer: you are pushing more into silver, is that correct? 91 00:05:21,630 --> 00:05:24,920 Dennis Karp: Correct. We have two projects and then we have the 92 00:05:24,930 --> 00:05:29,870 Dennis Karp: Wonawinta, the silver project. That historically was the largest silver producer 93 00:05:30,029 --> 00:05:33,730 Dennis Karp: in Australia, primary silver producer in Australia and then in 94 00:05:33,940 --> 00:05:43,300 Dennis Karp: 2013, 14, when the prices dipped, at that point in time they shut the project. Today's prices, and certainly have 95 00:05:43,300 --> 00:05:46,140 Dennis Karp: been bumped up over the last couple weeks, but today's 96 00:05:46,140 --> 00:05:50,690 Dennis Karp: prices are close to 35 Aussie dollars per ounce. This becomes an 97 00:05:50,690 --> 00:05:51,729 Dennis Karp: exciting operation. 98 00:05:51,960 --> 00:05:55,820 Sean Aylmer: But very different extraction and production processes, I'd imagine though, 99 00:05:55,820 --> 00:05:56,960 Sean Aylmer: between gold and silver. 100 00:05:57,660 --> 00:06:01,450 Dennis Karp: No, actually surprisingly they're very similar. So we use our 101 00:06:01,550 --> 00:06:05,960 Dennis Karp: Wonawinta silver project, the plant, we've been using that to 102 00:06:05,960 --> 00:06:10,029 Dennis Karp: process the Mt Boppy gold ores and now we just 103 00:06:10,029 --> 00:06:13,529 Dennis Karp: transition across to silver. So it's actually, they're both leach circuits. 104 00:06:13,529 --> 00:06:16,010 Dennis Karp: They both run of leach circuits. We have put in 105 00:06:16,010 --> 00:06:21,740 Dennis Karp: a smaller modular gold circuits. So our elution circuit is 106 00:06:21,820 --> 00:06:25,880 Dennis Karp: a purposely designed gold circuit but otherwise we now revert 107 00:06:25,880 --> 00:06:28,670 Dennis Karp: back to what was a silver elution column. 108 00:06:30,660 --> 00:06:31,410 Sean Aylmer: Elution. I just want to know what that word means. It's a great word. 109 00:06:31,779 --> 00:06:35,850 Dennis Karp: Basically, it's where we stood to separate the gold from the 110 00:06:35,850 --> 00:06:39,320 Dennis Karp: carbon or the silver in this instance from what will be the 111 00:06:39,320 --> 00:06:41,080 Dennis Karp: silver going forward from the carbon. 112 00:06:42,140 --> 00:06:46,760 Sean Aylmer: Okay. So you've recently purchased a new flotation plant. How 113 00:06:46,760 --> 00:06:48,960 Sean Aylmer: does that fit into that process? This is really good, because 114 00:06:49,170 --> 00:06:50,450 Sean Aylmer: I'm learning a lot here, Dennis. 115 00:06:51,020 --> 00:06:56,180 Dennis Karp: Firstly, it goes towards our expectations. Mt Boppy and Wonawinta, 116 00:06:56,180 --> 00:06:59,109 Dennis Karp: both operating in Cobar and they're both very shallow mines, 117 00:06:59,130 --> 00:07:02,940 Dennis Karp: which is quite unusual for the Cobar region. A lot 118 00:07:02,940 --> 00:07:05,979 Dennis Karp: of our neighbours are mining at depths of over two 119 00:07:06,130 --> 00:07:09,920 Dennis Karp: kilometres deep. Our Mt Boppy project is down to 120 120 00:07:09,920 --> 00:07:14,260 Dennis Karp: meters only and the silver project actually at this point in time is only 121 00:07:14,260 --> 00:07:15,410 Dennis Karp: down to 60 meters. 122 00:07:15,750 --> 00:07:15,780 Sean Aylmer: Right. 123 00:07:15,810 --> 00:07:21,620 Dennis Karp: So we do expect exploration success going deeper and the 124 00:07:21,620 --> 00:07:24,820 Dennis Karp: benefit of having a float circuit to tack onto our 125 00:07:24,900 --> 00:07:28,870 Dennis Karp: leach plant. So the Wonawinta project is a leach circuit. We 126 00:07:28,870 --> 00:07:32,700 Dennis Karp: do expect the flotation circuit to actually assist with recoveries, 127 00:07:32,820 --> 00:07:36,270 Dennis Karp: substantially even with existing Mt Boppy ores. If we put 128 00:07:36,270 --> 00:07:39,500 Dennis Karp: that through a flotation circuit, as well as the leach 129 00:07:39,500 --> 00:07:44,610 Dennis Karp: we'll probably increase our recoveries from 75% up to the eighties, 84, 85%. 130 00:07:45,370 --> 00:07:49,110 Dennis Karp: But if in the event we start mining sulphides, which 131 00:07:49,110 --> 00:07:53,550 Dennis Karp: are the deep ores, we would need a flotation circuit 132 00:07:53,550 --> 00:07:57,660 Dennis Karp: to extract maximum value out of those ores. So it just, 133 00:07:57,660 --> 00:07:59,640 Dennis Karp: it adds to our infrastructure within the Basin. 134 00:08:00,610 --> 00:08:08,900 Sean Aylmer: Stay with me, Dennis, we'll be back in a minute. My guest 135 00:08:08,900 --> 00:08:12,430 Sean Aylmer: this morning is Dennis Karp, Executive Chairman of Manuka Resources. 136 00:08:13,210 --> 00:08:16,330 Sean Aylmer: How is your relationship? How do you manage that relationship 137 00:08:16,550 --> 00:08:21,240 Sean Aylmer: with indigenous Australians and what you do? Obviously Rio, a 138 00:08:21,660 --> 00:08:24,260 Sean Aylmer: couple of years ago had a PR disaster as well 139 00:08:24,260 --> 00:08:27,370 Sean Aylmer: as a disaster for first Australians. I'm just interested in 140 00:08:27,370 --> 00:08:31,140 Sean Aylmer: how you manage that, particularly given Cobar certainly has a 141 00:08:31,140 --> 00:08:31,880 Sean Aylmer: lot of history there. 142 00:08:32,400 --> 00:08:35,510 Dennis Karp: So it does have a lot of history and it's a very old mining town 143 00:08:35,510 --> 00:08:38,280 Dennis Karp: as well. One of the advantages we have, because we are going 144 00:08:38,740 --> 00:08:42,520 Dennis Karp: back to two projects, which have been mined previously is 145 00:08:42,530 --> 00:08:46,929 Dennis Karp: they're both fully permitted. So the guidelines of interacting with 146 00:08:46,929 --> 00:08:51,450 Dennis Karp: the local communities have already been established. We just continue 147 00:08:51,450 --> 00:08:55,500 Dennis Karp: to fulfill those guidelines and contribute further so for example, 148 00:08:55,780 --> 00:08:57,819 Dennis Karp: you'll see a lot of press coming up in the 149 00:08:58,220 --> 00:09:01,800 Dennis Karp: weeks ahead. There's the opening of the Cobar Sound Chapel, 150 00:09:01,800 --> 00:09:04,959 Dennis Karp: which is a fantastic project. A sound chapel out in 151 00:09:04,960 --> 00:09:07,910 Dennis Karp: the desert has actually received press in New York, has 152 00:09:07,910 --> 00:09:11,500 Dennis Karp: been receiving press in London and one of Australia's most 153 00:09:11,500 --> 00:09:15,540 Dennis Karp: famous architects, Glenn Murcutt has paired off with one of 154 00:09:15,620 --> 00:09:20,880 Dennis Karp: Australia's most famous composers, George Lentz and they've developed and 155 00:09:21,050 --> 00:09:24,679 Dennis Karp: constructed the south chapel in a beautiful old water tank. 156 00:09:25,130 --> 00:09:26,740 Dennis Karp: Then that's been a major project. So we are the 157 00:09:26,740 --> 00:09:29,229 Dennis Karp: core sponsor of that project and we'll look to grow 158 00:09:29,230 --> 00:09:33,120 Dennis Karp: that sponsorship into the local community. There's a string quartet 159 00:09:33,160 --> 00:09:35,800 Dennis Karp: will be coming from Sydney to play at the opening 160 00:09:35,800 --> 00:09:38,120 Dennis Karp: and then we'll be looking to bring them up once 161 00:09:38,120 --> 00:09:41,530 Dennis Karp: or twice a year and again, play at the local 162 00:09:41,530 --> 00:09:44,840 Dennis Karp: schools, perhaps have an award. So we look, we continually 163 00:09:44,840 --> 00:09:47,189 Dennis Karp: looking to how we can put back into the community. 164 00:09:47,190 --> 00:09:50,580 Dennis Karp: That's a niche project, which seems to be getting a lot of 165 00:09:50,580 --> 00:09:53,760 Dennis Karp: coverage and just is an example of what we are looking to 166 00:09:53,760 --> 00:09:54,540 Dennis Karp: do going forward. 167 00:09:54,540 --> 00:09:59,360 Sean Aylmer: Working out of Cobar though, it's a remote Cobar, it's a long way 168 00:09:59,360 --> 00:10:01,569 Sean Aylmer: away. It must be difficult in terms of logistics, just 169 00:10:01,570 --> 00:10:04,480 Sean Aylmer: getting equipment there and when you're building these mines and 170 00:10:04,480 --> 00:10:08,929 Sean Aylmer: also building the plants, it's no mean task that. 171 00:10:10,150 --> 00:10:14,559 Dennis Karp: Actually Sean, Cobar's good. Cobar's really good because there's... So there's an airstrip at 172 00:10:14,620 --> 00:10:17,620 Dennis Karp: Cobar itself. There's a town of about 4, 000 people there 173 00:10:17,720 --> 00:10:20,979 Dennis Karp: and there are about, there are five producing mines in the 174 00:10:20,980 --> 00:10:23,210 Dennis Karp: region. There are about 20 explorers but there are five 175 00:10:23,450 --> 00:10:26,370 Dennis Karp: producing mines. We are obviously one of those in the 176 00:10:26,370 --> 00:10:30,179 Dennis Karp: region. It's a good little hub for communication for mining 177 00:10:30,450 --> 00:10:33,910 Dennis Karp: equipment and so on. It is, look it's about 700 178 00:10:33,910 --> 00:10:37,120 Dennis Karp: kilometers from Sydney but you can land in Cobar. There's 179 00:10:37,120 --> 00:10:39,240 Dennis Karp: direct flights there four times a week, I think at 180 00:10:39,270 --> 00:10:42,910 Dennis Karp: the moment. You can land in Dubbo and drive in, 181 00:10:42,910 --> 00:10:45,360 Dennis Karp: which is about a three hour drive from Dubbo. Or 182 00:10:45,360 --> 00:10:47,090 Dennis Karp: we actually have an air strip on site so we 183 00:10:47,090 --> 00:10:50,309 Dennis Karp: can grab if it's something urgent, we can get a 184 00:10:50,309 --> 00:10:52,270 Dennis Karp: small flight from Bankstown and land on site. 185 00:10:53,320 --> 00:10:57,679 Sean Aylmer: Okay. So where does Manuka end up in the next five 186 00:10:57,679 --> 00:11:01,300 Sean Aylmer: to 10 years? Hopefully from your point extracting a lot 187 00:11:01,300 --> 00:11:02,970 Sean Aylmer: of silver and gold, is that right? 188 00:11:03,480 --> 00:11:07,750 Dennis Karp: Yep. So our next six to eight months are extremely 189 00:11:07,750 --> 00:11:11,770 Dennis Karp: exciting. We'll turn the taps on for silver, we'll start 190 00:11:11,770 --> 00:11:16,230 Dennis Karp: silver production before the end of March and the beauty 191 00:11:16,230 --> 00:11:19,890 Dennis Karp: of our initial tranche of silver is that it's all 192 00:11:19,890 --> 00:11:22,260 Dennis Karp: from stock piles and the stock piles are sitting right 193 00:11:22,260 --> 00:11:25,309 Dennis Karp: at our bore mill, right at the plant. They've been 194 00:11:25,309 --> 00:11:29,170 Dennis Karp: previously mined and they're waiting to be processed. That's going 195 00:11:29,170 --> 00:11:34,300 Dennis Karp: to take us six to eight months. That'll iron out 196 00:11:34,320 --> 00:11:37,940 Dennis Karp: any wrinkles that may appear in our processes as we 197 00:11:37,940 --> 00:11:42,670 Dennis Karp: transition to mining in the years ahead. We expect to 198 00:11:42,670 --> 00:11:46,059 Dennis Karp: produce close on a million ounces of silver from the 199 00:11:46,059 --> 00:11:50,410 Dennis Karp: next six to eight months, processing those stock piles. Then 200 00:11:50,610 --> 00:11:53,319 Dennis Karp: we'll be looking to, as I say, move into the mining. 201 00:11:53,970 --> 00:11:56,630 Dennis Karp: We have a 50 million ounce or 51 million ounce 202 00:11:56,630 --> 00:12:00,720 Dennis Karp: resource at Wonawinta. That's a silver resource and then we'll be 203 00:12:00,730 --> 00:12:04,640 Dennis Karp: looking to bring out a reserve following confirmation, some of 204 00:12:04,740 --> 00:12:08,809 Dennis Karp: our cost structures from processing of the stock piles. We'll look 205 00:12:08,809 --> 00:12:12,250 Dennis Karp: to bring out a reserve, a silver reserve over the 206 00:12:12,250 --> 00:12:13,929 Dennis Karp: next 60 to 90 days. 207 00:12:14,220 --> 00:12:15,810 Sean Aylmer: Dennis, thank you for talking to Fear and Greed. 208 00:12:16,600 --> 00:12:17,290 Dennis Karp: Thank you very much, Sean. 209 00:12:18,380 --> 00:12:22,170 Sean Aylmer: That was Manuka Resources Executive Chairman, Dennis Karp. This is the Fear 210 00:12:22,170 --> 00:12:24,530 Sean Aylmer: and Greed Daily interview. Join us every morning for the 211 00:12:24,530 --> 00:12:27,660 Sean Aylmer: full episode of Fear and Greed, Australia's most popular business 212 00:12:27,660 --> 00:12:30,069 Sean Aylmer: podcast. I'm Sean Aylmer. Enjoy your day.