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Columbia Yukon Explorations' Ron Coombes audio interview transcript

Hello, this is Harry Norman for Proactive Investors and welcome to another Proactive audio interview.  This interview was first recorded on 28 July 2009 and I'm talking with Ron Coombes, President of Columbia Yukon. Listed on the TSX Venture Exchange metals and mining sector.  Stock ticker CYU, share price 21 cents Canadian, market cap CAD$8.2 million.

Columbia Yukon shares also trade on the OTCBB in the United States and on the Frankfurt Exchange.  Web address www.columbiayukon.com.

Ron, thank you very much for joining us for this interview.

Thank you very much Harry, it's a pleasure being here today on behalf of Columbia Yukon.

Why should investors take an interest in Molybdenum at this time Ron?

So if you look at the Molybdenum market over the past 20 years, and you take a look at the hiatus that's just happened in the market place here over the last 24 months, which I think has impacted all of us.  Why should an investor take an interest in Molybdenum?

Well, you know, subsequent to this meltdown here, the governments have all been announcing infrastructures spanning globally.  And with that infrastructure spanning of course, a lot of that by-product is going to be the use of steel.  And of course the steel industry uses a lot of Molybdenum.

There's no new Molybdenum producers coming out online here of significance.  And of course the number of new pipelines and nuclear reactors that are planned in the immediate future here are basically going to consume all the Molybdenum that's existing in all the existing Molybdenum mines in the world right now.

So I think it's a good time for the Molybdenum market here over the next 24 months.  I think it's going to see a robust return in prices to Molybdenum.

What is Columbia Yukon's business strategy and what distinguishes the company from it's peers?

Columbia Yukon's business strategy is really quite simple.  And what distinguishes our company from it's peers?  I think there are a couple of key issues that probably distinguish us from some other companies in that we're pretty particular where we make our properties.

In the Storie project of course, it's sitting right near a highway.  So as far as the EA impact, very little.  I don't even know if it's going to be entered into the comprehensive environmental application permitting process or not.  But, as well other issues, we have to be near water, we have to be near power, people.

Those are all the key issues that we look for in acquiring and developing any asset.  Because of course without those ingredients, you know, it gets very expensive.

And of course the development permitting side of things can take many years to move forward and actually get your permit application approved.

Columbia Yukon released an updated NI43101 mineral resource estimate for the Storie property in April.  What did this show?  And what is the potential for increasing your resource at Storie?

Well we're ecstatic about the mineral resource estimate that we put out in April.  I mean, basically we delivered exactly what we said we would deliver to the marketplace.

Potential for increasing a resource?  We believe its big enough now to actually call it a mine.  Of course, you know, that's still dependent on a feasibility study etc.  But we're sitting right now currently with about 200 million tonnes in the ground there.

And there's still a couple of other zones on the property that offer potential upside for further development of additional resources on the Storie property itself.

So, we believe it's got all of the necessary components to become a success story now.

What are your thoughts on the advanced metallurgical scoping study released earlier this year Ron?

My thought is it couldn't have got any better.  I mean basically we have proven now that the metallurgical properties of Molybdenum at present, no difficulties whatsoever.  It's a non-technical issue as far as trying to extract the Molybdenum from the rock.  And there are no other metal by-products to speak of.

So from an EA prospective it really doesn't get any better.  It's pretty much a benign product by the time we extract the Molybdenum out of the rock.  So we're pretty pleased with the scoping study that was released earlier this year.

What experience does the Columbia Yukon management team bring to the development of Molybdenum project Ron?

Our team of course has got a combined decades of management experience on the public arena, and had a number of successful projects move forward in the past.

Our senior advisory team is very well versed.  They've developed several significant mines here in the province of BC, and of course that's important in this game.  If you're going to try to develop something, you better now how to develop it.

So I believe that we have the management that's necessary to bring together the Molybdenum project and move it forward for future production.

How important is community relations going to be to the development of the Storie project Ron?

We think that community relations is one of the key components in the development of the Molybdenum deposit, or for that matter any type of deposit.

It's so important and it's one of those issues that a lot of people miss out on the initial stages.  And of course right from the initial onslaught we sat down and we discussed what we were planning to do in the area regionally.

And of course we wanted to know if there was any resistance, what the resistance would be, because there's no point in moving forward on a project if they don't want you there.

So we've had a very positive relationship with the community, and continue to have a very positive relationship.  And we believe moving forward it's only going to get better.

What is Columbia Yukon's financial situation Ron?

Well we're in a pretty good financial position here currently still.  Fortunately enough we saw the hiatus of what was happening here in the financial markets before it happened and we took the necessary steps and basically downsized our project from 40,000 metres [drilling] down to 20,000 metres, and consequently saved ourselves a fair amount of money in our bank account.

So we're currently sitting with about CAD$3.5 million, which leaves us in a prudent financial position here to complete what we want this year and next year.  And we'll probably have to go back to the financial arena sometime in 2010.

What is Columbia Yukon's issued and outstanding Ron?

Right now we're sitting in a pretty enviable position I believe.  We're sitting with 38.5 million shares issued and outstanding. [We have spent] approximately CAD$30 million on this project over the last four years.

And, you know, given that, where our issued and outstanding are currently right now, I think that we most certainly offer a significant upside potential for our shareholders.

What can investors expect from Columbia Yukon over the next 12 months Ron?

I think what can be expected is continued good news.  I think that our project right now, moving forward here, we haven't seen anything that would be negative with regards to the particular project.

So what you'll see over the next 12 to 24 months is you'll see us continue with our negotiations to complete our traditional knowledge protocol agreement with the First Nations.  We'll also move to complete our social economic agreement with the First Nations.

We'll, after that, move into the permitting process for environmental, which we don't believe will even trigger a comprehensive evaluation given the size of this potential project, because of where it's sitting so close to the highway and infrastructure etc.

So continued good news.  And then as well we're also planning a small exploration project here to see whether or not another zone on the property may hold the potential for another significant Molybdenum deposit underground.

So, you know, we're planning that.  We won't the results back from that until probably late October or thereabouts.  So, lots of plans for this year.

What do you say about the likely development path of the Storie property?  For instance, is it likely to involve an end user of Molybdenum?

Our project, we've always know right from the beginning, this project is a fairly large, significant project.  And yes, it will need an end user, whether or not that's by way of joint venture partnership or whether or not we sell the entire project.

At the end of the day really depends on how we can get the best bang for our dollar for our shareholders.  Obviously that's all that matters at the end of the day here, is building shareholder wealth.  And we'll continue on that front.

What are the growth areas or new applications that are likely to affect the market for Molybdenum Ron?

There's a number of things.  For the most part, you know, we rely heavily on the steel industry.  Now with all of these gas line projects that are planned and scheduled, and of course all the nuclear reactors, they require, like Molybdenum has one of the highest temperature thresholds out of any of the metals.

So it requires large volumes of Molybdenum in the pipelines etc.  And actually the pipelines themselves, if they all went underway as planned, would consume every pound of Molybdenum in the Climax and the Henderson, which are the two largest Molybdenum projects in North America.
   

So, you know, we think that the future looks extremely robust for Molybdenum.

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