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Catalyst Metals

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September 16, 2024 at 9:10 AM (MDT)|Broadmoor Hotel & Resort

James Champion de Crespigny

Managing Director & CEO

Mr Champion de Crespigny is a qualified Chartered Accountant with extensive experience in capital markets, financing and mergers and acquisitions, primarily in the mining sector. His past experience includes roles as a director of London based mining finance group, Cutfield Freeman & Co and with Sydney based private equity group, EMR Capital.

This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

This is the first time that catalyst has presented at the Denver Gold Forum in doing so. We're very conscious as an Australian listed company of the North American audience. We're also conscious that recently Plutonic, the flagship asset of catalyst was listed on the Toronto Stock Exchange and it had mixed results during that time. What we're hoping to do in the couple of weeks that we're taking to go around North America is to dispel some of those rumors. We think some of the operating improvements that we've done under our management will hopefully lead to that and show Plutonic in a very different light. So shortly, I'll show you a, a video about some of that operating success and really hope to put some of those thoughts to bed. But first, a couple of corporate issues, we've got about 226 million shares on issue. We've got about an Australian dollar 600 market cap. That's about 400 us. We are slowly institutionalizing our register and we've got meaningful board and management buy in there. About 12 months ago. We had no brokerage coverage, but now that's been coming on and been a result of, of some of our performance results that I'll explain to you shortly. So, what we've had over the last 1215 months now is a turnaround story and I hope you might humor as I walk through just the next couple of minutes, a short video to that turnaround turnaround story. A brief history of the last 15 months. Plutonic as a mine sits in central western Australia. It's home to the Plutonic Greenstone Belt. It's about 11 million plus ounce gold endowment and it was 1215 months ago controlled by two companies. Catalyst took the first step in March 23 and we acquired Van Gogh mining an A SX listed company. It had wonderful exploration potential and some high grade resources. We then moved quickly and acquired that superior gold Toronto listed company next door with that came wonderful infrastructure. So by July 23 we had consolidated this belt and we had a land package of the size that we think needed to make this an ongoing viable operation. It came into our portfolio, but today's presentation would be very much be based on the plutonic operations. So what I'm about to show you in terms of operating results, important to note that it's not to do with the whole belt. It is only to do with that Plutonic gold mine that bit down here in the bottom left corner is of an operation today. It's an owner operator mining fleet with significant infrastructure that was all built by Homestake and Barrack in the nineties. So when it comes to infrastructure today, we are very well capitalized. We've got an airstrip, a village and a processing plant that's underutilized. It's been very well maintained o over this period due to the water quality, it really hasn't suffered like many other operations have in Western Australia. So we put together a management team that 15 months ago, mobilized and led to some of these operating performances. And so what today's presentation will really talk about is the next 12 and and 36 months as we chart our path to 200,000 ounces. But what we think is exciting for us as a company that's trying to build a mining business, a gold mining business in Australia is that we've been able to affect a step change based on remnant mining. And as we move into new virgin ore sources over the next 12 to 36 months, we think that we've got a stable foundation upon which to build a reasonable mid-sized Australian gold company. So like any turnaround story, it has been a bit of a volatile period when we acquired Van Gogh and then subsequently superior. There were people that obviously take time, understandably to believe in the story that we are turning around these operations. And it really wasn't until we were able to put about 12 months of operating results behind us and pay down some debt reporter made in profit that we were able to start getting market recognition. However, we do think that this positions us well over the period of that 1215 months, we've been able to stabilize our balance sheet and build some liquidity. We've announced last week, a million ounce reserve and that then forms the foundation of the plan to get to 200,000 ounces. We think over the next 12 to 18 months, we'll be able to report some good results coming out of these several satellite deposits feeding into that underutilized mill as we bring our production up and costs down. So today, as we go into the rest of this presentation, we do have a portfolio of three assets. We will focus today on Plutonic, but we think we are better capitalized. We think all in costs 2.5 $1000 Australian or about $1700 US C all in cost is fairly competitive with the market. We do note there on the slide quite close all in sustaining costs with our all in costs. That is the nature of owner operator businesses. We've got a million ounce reserve and about a 3.6 million ounce resource. Bendigo, a project down in Victoria near that wonderful Southern Cross and Costa build projects that we heard before. We've identified a 26 g resource and we think there are many more to come Henie down in Tasmania produces 30,000 ounces and is a wonderful stepping stone in the story of catalyst. But getting to today's point, we'll talk quite briefly here just about the last 12 or 15 months in a bit more detail. This is the belt upon which we sit. It's got wonderful infrastructure. It's got three deposits there, the trident K two and Plutonic East deposits shown in light blue that will all be processed through that central processing plant. And more in the back half of this presentation, we are unhedged and we're selling at spot. So in the last 12 to 15 months through mobilizing that team, we have affected a step change in the plutonic operations. We did it with that new T team, implementing improved accountability and planning. As a result of that, we've seen about a 50% improvement in operating performance of the Platonic gold mine that 46% increase in gold produced allowed us to generate $54 million of cash at about a $3000 price. So we keep our team accountable to those key metrics of production, drill, meters, development, meters, etcetera. And we really do follow those on a day by day, month by month basis. Other workers allowed us to double our reserves over the last 12 months to the million ounces that we are there today. We've got a considerable amount of latent mill capacity. So these satellite deposits deposits that I'll talk about shortly will come through the one centralized facility. So as yet today, the results that I've shown you here, they really are only on that existing Platonic mine that was operated by a number of people that we know before but has a lot of spare capacity. So the advantage of buying the next door neighbor allows us for a very low capital cost of 31 million. We think to double plutonic production, we have set out in the documents released last week. Our guidance to over the next three years. Our hope is that we'll be able to bring these deposits online over the next 12 to 18 months. And each one is a stepping stone to that 200,000 ounces as we increase that mill processing tons from these satellite deposits. Our costs ultimately, we think will get quite close to the $2000 mark. That's about a 1500 or so us dollar price and our gold production will get close and, and possibly go above 200,000 ounces. So how do we get there? Four key projects will take us there, the plutonic in mine areas and as the mine moves and transitions to virgin areas. Plutonic East is a deposit with a small reserve today that we think will grow. It's an old underground mine, but we're pushing out into other areas cos it was last mine when it was $750 an ounce it's got a three year mine today and our hope would be to extend it to five years. The same applies to K two trident already has a five year mine life. So at the end of the 12 to 18 month period, our hope is that our baseload or feed of plutonic will be able to be fed in conjunction with these roughly five year mine lives hopefully into the one central processing facility that provides a very stable and far simpler to manage,, business than what we have wrestled with over the last 12 to 15 months. And we'll do that all for the cost of $31 million which we'll be able to fund, we believe out of our existing cash reserves. So the first one, just an in depth. Look here, we've gone and actually done some,, drilling already at zone F and come up with some positive results right now. We can mine for the next seven years based on our current reserve here at Plutonic. But if we're able to push into these virgin areas, obviously, they are far more comfortable to mine in. It's possible performance might improve as we move into those areas as well. However, all the numbers that you've seen today are done off the remnant mines that you see in blue on the screen, but we've committed $9 million to drilling out each of these red areas and we're very excited about how that is coming along, particularly a small sneak peak here at Zone F and some of these numbers on the screen, an expiration target of roughly 30 plus 1000 ounces. And it's only costing us 1.5 million. Once we've been able to develop into these areas, it's much cleaner, consistent. Virgin or Plutonic East is a mine that we started getting into some four or five months ago. It's moved along rapidly dewatering, starting the mines, setting it up with the starter packs, rehabilitation and grade controlling those first Stopes. So we're really already getting things mobilized here to start this mining plan. We do think that we are going to be able to extend this reserve out to the from the three to the five years years to give us that base load. It does only lie two kilometers from the existing processing plant and it's very similar geology to Plutonic. So all the similar same systems can be implemented here as are currently in place at Plutonic at the other end of the belt, 40 kilometers away. And there is a wonderful Hall road that runs the full length of the belt is the K two mi underground mine. It does already have a decline in it like Plutonic East. So the permitting is far faster. You can see here some wonderful potential increases to the reserve that can come in time again. This life of mine is three years And while small today, we think it will grow, it was last mined as an open pit back in 98 90 97. But really, it's never been or it has never been mined as an underground mine. So another opportunity here for us and because it's all on a mining lease, because there's a decline already in place, the start up costs are low. And with us holding the processing plant, we are obviously in in a wonderful position there to bring these online for the low capital intensity. The same applies to trident. It is our largest development cost project at $15 million. We were able to drill some holes about six months into this trident open pit or really, it's a large box cut right now. We've got five years at about 40,000 ounces, but that doesn't include about 250,000 ounces of reserves that we think will come into the mine plan soon after. So you can see there, we've got four projects that are on our existing mining licenses. You've got a whole road down the middle of the Belt and an underutilized processing plant. We think it represents one of the more attractive organic growth opportunities on the A sx for a relatively low cost of capital and in terms of operational risk, we also think that that is on the more attractive side, but we didn't go and buy two companies side by side to sit there and just worry about the operations. Really. The focus is on exploration. We'll commit $18 million to the de development and drill out of those results that I said before the in mine exploration and K two and Plutonic East etcetera. But the real prize here we think and why we originally did this consolidation is the expiration across the belt, particularly this image. There's about 8 million ounces at plutonic that lies between 100 and 600 m at depth. It's a very, very large system, but you do need to drill below Bruce Kay, a fellow director is a very has been had a very successful career ed issues that discovered this deposit and has been well known to have a number of discoveries across Western Australia. There's no doubt still thinks that there is wonderful potential here because of the segregated ownership, foreign ownership of this plutonic belt. And on this slide, if we need no further introduction to the expiration potential, what is on offer here? Wherever there is any drilling at any depth, it's come up with some good deposits, whether it be K two trident. And we really only think we're just getting going. It's the first time it's been consolidated under Australian ownership group and it's the first time that we've been able to have a dedicated geological team, focus on it for some time. So we'll go and do about 20,000 m of reconnaissance drilling over this, this 20 kilometer strike here. And soon after we think we'll be able to generate some more targets and we'll start narrowing the area that we're gonna focus in here. And obviously, we have the benefit of 40 years of data to draw on to get a more focused approach to our exploration, a corridor that we do think is exciting is the cinnamon side of things. And while not to set up too much on this conversation about it, it is just interesting that this has never really been something that's looked at and yet the potential here to bring it online quickly. is, is something that we're very excited about. So to make sure I finish up on time there, Alex, I'll pause there if any questions. Thank you for your time. Thanks James. Percy. Any questions from the floor? No, I'll start James. Did you say a owner operator model? Is that, is that right? Yeah. How, how do you see your team being able to sort of commence those multiple new mines and then operate multiple mines at the same time. You know, would you need contractors or, or other skills in house? Yeah, terrific. Thank you, Alex. As a business, we now are owner operator across two Asics, one down in Tasmania and one at Plutonic. We have designed deliberately the development of the belt to be having those kind of operating risks in mind. So, Plutonic East, the first mine we're starting already has a decline down into it. Therefore, it is simpler for the existing team to go and rehabilitate and start commencing of operations. They've been lining up for that for now some nine months. So teams have been getting mobilized and we've been picking out key people within our teams that we think can work as we go and do K 240 kilometers, the team starts to stretch and again, we're picking out the people that can operate a little bit further and operate 40 kilometers away from the current site. Now, it is a very tight, neat compact site, but we do have that very much front in mind. We'll be owner operator opening up each of these deposits. We do see it as an expansion of our existing business and we've been preparing that for the last nine months. So we are hopeful that that strategy of taking small baby steps each step of the way Alex is really bringing us there to lower that operating risk and make sure that we execute properly. You, you did touch upon it as well that as you move out of the remnant mining, perhaps some operating efficiencies across those new three new sites. Was, was that all sort of virgin or as well? And, and does that especially as you, you diversify as well, should we be expecting even more consistent sort of results from the team. Y you know, certainly that's our aim. I think anyone that's in mining, gold mining particularly knows that there are ups and downs and anything you can do to simplify your business is, is typically going to be more successful than, than the other way. Both K two and trident are very new mines and the majority of Plutonic East as well, despite it being a small underground mine for three years. But because it wasn't mined since gold prices of $750 it is predominantly virgin ore. And we are really liking where we're pushing the, the new territory of, of Plutonic underground. We think just because we bought it a mine that's been running for 35 years is not gonna just stop. So I think we are quite hopeful that as we go from here, it'll be mostly virgin ore sources rather than these remnants that we've built the name on today. Questions from the floor. Anyone I'll ask a question on sort of the market perceptions as, as you've been telling the story, as you say, Plutonic does have a a long history. now that, you know, sort of the results have come in and the, the proof is out there. How have you seen the market change? Obviously, a share price done, done quite well. Are people you seeing believing? you know, are the conversations different. A lot happier now. Well, look, II, I mean, I think any turnaround story people are, are rightly cynical. results are what matter and you do need 12, you know, some would say even 15 months or so in order to garner that attraction. So, you know, I think for us, we didn't do any kind of marketing for nine months. We knew that we had to fix the plutonic operations. We had to plug the leak. And so it wasn't really until 12 months down this track that catalyst and, and, and we were not a big entity before this, that we really had the credibility to come out and talk to people properly. But before then we, we really had to prove ourselves. So, you know, understandably, the market, you know, perhaps now is, is, is really starting to recognize that obviously, we're, we're grateful. But in the end, if we don't continue to deliver results, then, you know, rightly, we'll, we'll, we'll be punished for that ask questions nearly at time there. So I might leave it there. Thanks very much for that James. Thank you.


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