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Market:	TSX
Sector:	General Mining
Epic:	ELN
News:	Latest news
Web Site:	El Niño Ventures
Other Articles:	06-08-200905-05-200917-02-2009

Jean Luc Roy, President and CEO of El Niño Ventures Speaks to Proactiveinvestors

by Proactiveinvestors

Jean Luc, thank you very much for joining us for this interview.

It’s a pleasure to be with you and it’s a pleasure to give Proactiveinvestors a chance to hear from us and to get to know us better.

How come El Niño Ventures has such an unusual spread of project locations with projects in Canada, Ireland and the Democratic Republic of Congo?

Well, to be honest with you I think the projects in Canada and Ireland have   to be downplayed. The focus of this company is definitely in the Democratic Republic of Congo, the DRC. When I first joined as President we had a project in New Brunswick, Canada looking for zinc with Xstrata Zinc. That project has now ended. We have a 50% ownership in the exploration ground but we have no work planned in the future on these properties. We are looking with Xstrata on how to move these properties forward, probably with a new partner.

In Ireland, we  reduced our planned drilling  because of the downturn in zinc and the downturn of the zinc industry in Ireland and the company has to establish what it is going to do moving forward but we have no plans to spend expenditures in exploration over the next year in Ireland.

So to put it bluntly, the focus is definitely on the Democratic Republic of Congo where we have just identified the potential for a mineable ore body with our Kasala project. We have just put out our latest drill results where we have several zones of true thickness of 70-90 metres grading well over 1% copper. We have intercepts of 30 metres at 2%, 22 metres at 3.28%, 7 metres at 7% and 10 metres over 6%, so those are ore type grades. Our strike point is about 800 metres by 250 metres. We have done a complete IP ground survey after the drilling and we have identified an extension to the southeast and a probable extension to the northwest. So the focus of this company is definitely going to be in the DRC.


So that was the Kasala Copper project that you were speaking about. Could you tell us a bit more about that?

The Kasala project has been identified in one of the original research permits that we’ve picked up. We drilled a discovery hole and a couple of months ago we reported that and we’ve just put out our latest results. The Kasala project is held by us with a 70% interest and that is very important for investors to understand. A lot of companies operating in DRC have an interest far less than 70%. On top of that we have got an option to earn into 90% at terms to be negotiated. The structure of the deal makes a lot of sense to a lot of investors and the results that we’ve just published basically confirm that we have a true project to work with over the next couple of years.


Would you tell us a bit about El Niño’s other projects in the DRC?

El Niño holds a very prospective land position. We hold about 450 square kilometres. It is not the largest land position of any company but we believe it is very prospective. If you look at our latest news releases you will see that we’ve just finalised an agreement with Phoenix Mining on a research permit that is located between two world renowned ore deposits being the Ruashi Mine held by Metorex and the Luiswishi Mine held by Gecamines of Congo. Both of these deposits are within 1 or 2 kilometres of our land that we have picked up and with several additional workings already on our   property we strongly believe that this has the potential to be developed in the same way that we have developed the Kasala project. We also have other land positions near Kinsevere, the largest project of Anvil Mining. Our land is actually adjacent to that project and we hope to move those forward. We have to take into consideration that the markets are very difficult right now so we will probably focus mainly on the Kasala project in the next year.

One other thing that I’d like to point out is that we are not under review. The DRC is now conducting a mining review for mining contracts for companies that have contracts with state owned companies. We are not in a contract situation and we are not under review. Another thing that is worth mentioning to all the investors is that the copper belt of Congo is in southern Congo and it is totally unaffected by the problems to the east. Congo is a very large country with very little infrastructure and throughout the problems that have occurred in the Congo over the last 10 years, the Katanga region where the copper belt is has never been affected and the work in the mining industry has never slowed because of these problems.


Can you tell us a bit more about El Niño’s projects in Canada?

As I said earlier, we do have a land position in New Brunswick which we are holding with Xstrata Zinc, we are in a joint venture with them. The results were not as anticipated and for the moment there is no plan to spend any money on exploration on that property. We are actually looking to find another partner to take it on and we will then assess whether to dispose of this property or to keep a small interest.


Is there anything more you can tell us about El Niño’s exploration projects in Ireland?

In Ireland we have picked up 13 prospective licences a year and a half ago. We have done some drilling with very limited results. Again when we picked up these properties zinc and lead were at an all time high, since then the markets have totally destroyed the zinc and lead market. So for now we do not anticipate having more exploration work in Ireland in the next year but we will keep these properties because they are strategically placed in Ireland and we believe that when the markets turn this could be a good venture for our company.


What is El Niño’s financial situation?

Right now our cash position is about $1.3 million.   We can weather the storm of these markets. We would like to raise some money this year and do some drilling on the Kasala project and this will all be contingent on us raising about $2 million. We strongly believe that copper will rebound and these markets cannot stay where they are forever and we made sure that our cash position was strong enough for us to get through these difficult times.

What can we expect from El Niño Ventures over the next 12-18 months?

To discuss the next 12-18 months one has to be very realistic and look at the markets. Short term basis we would be looking at raising about $2 million this year to do 7,500 metres of diamond drilling on the Kasala project. We have already identified a major extension to the southeast of the Kasala main zone so the focus would definitely be to expand the Kasala project and ensure that at the end of this year we can actually put a bona fide resource calculation on this project. Again, this will all be contingent on us being able to raise money at a price that protects our shareholders and ensures that the Kasala project can move ahead.


What experience do you and the El Niño team have of developing projects in the Democratic Republic of Congo?

I sincerely believe that our management team is probably one of the strongest to operate in the Democratic Republic of Congo. I was personally Managing Director for First Quantum Minerals from 2000 to 2006 living and working in the Congo. My country manager has over 20 years in the Congo. We know how to operate in the Congo. We have very good relations with the authorities in the Congo and we look forward to making a success of El Niño’s Ventures in the DRC.


Could you give us your thoughts please on the prospects for the Zambian Congo copper belt?

Basically the copper belt runs through Zambia and Congo. It has a length of about 350 kilometres by about 60 kilometres wide and it holds probably 20-25% of the known copper reserves in the world. There is a huge potential for new findings in both Zambia and Congo for the reason that both Congo and Zambia were monopolies run by state owned companies right up to the year 2000 or so. So what you had was a state owned company in Zambia and a state owned company in Congo and they had exclusive rights to the copper in both countries. The copper belt has now been opened to international companies and I strongly believe that the potential to find huge ore bodies in both countries over the next 10 years is something that is real and I think in the next 10 years we will find discoveries in both countries that will rival the best mine ever developed in the copper industry.


What are your thoughts on the mining review in the DRC and has this process or its outcomes affected El Niño Ventures and is it likely to?

Well as you know there is a mining review under way in the Congo to review certain mining contracts that people have signed with state owned companies. This review process has dragged on a long time and has had a negative effect for the people being under review. As a backlash, El Niño was affected because people had a hard time understanding that we are not under review. The reason we are not under review is that we do not have contracts with state owned companies. We have heard that this review process should be concluded in the very near future and hopefully this will recreate faith and confidence for investors looking to invest in the Congo. While it has been a difficult time it has not impacted our operations, but it has impacted how people feel about investing in the Congo.


How does El Niño Ventures engage with local stake holders in the Congo?

Our local stake holders, when we set out to acquire properties in the Congo we approached people we knew we could do business with. A lot of the properties are held in Congolese hands in the Congo. We first of all identified the properties we wanted and then we worked with our local partners to strike a deal that made sense to them and makes sense to us. Our local partners are very silent, they are not very active. We co-ordinate with them three to four times a year and they understand and they know what we do. I personally visit Congo two to three times a year and have meetings with them every time I go there. We at El Niño try respect the Congolese mentality but also we have to function in an environment that protects and builds value to our shareholders.


Tell us about how governance works in the Congo?

How does governance work in the Congo? Well that’s a very good question. I think it is a work in progress. Every year that I have been associated with the Congo which started in the year 2000 conditions improve in the Congo. The new mining code came into play in 2003. It took a while for it to be implemented correctly but I think that with all the international interest in the Congo I think that the governance of Congo slowly but surely is moving towards a goal of being transparent and giving an environment where investors feel comfortable operating in.

What can you tell us about the fiscal regime in the DRC?

The fiscal regime in the DRC is spelled out in the new mining code that was put forward in 2003. The new mining code was developed by the World Bank so the fiscal regime that you have in the Congo is competitive with other countries in that area. Taxes are around 30%. We do get breaks when we import equipment and it is a competitive mining code which means that the fiscal regime is competitive and gives an operator the opportunity to operate and have success in the Congo.


What are your thoughts on the prospects for copper and base metals?

I think the prospects for base metals over the next few years are yet to be determined. I think we have hit the low positions, obviously 2008 was a very difficult year, but I think the fundamentals still remain very strong. The inventories of metals is still low compared to what you had in the late nineties early 2000 and I think the fundamentals of development around the world have not changed. I think it has slowed but that we are facing a slow recovery, probably some time this year. We will be at the beginning of a new cycle, maybe not as exciting or fast growing as the last cycle but I think because of the growth around the world, base metals are here to stay and I think that prices will still be very good for anybody wanting to develop mines in the base metal industry.


Thank you for joining us for this interview.

It’s been a pleasure joining you and if any of your investors want more information they can look us up on our website at www.elninoventures.com and through that website if they have any questions they can feel free to contact us and we will get back to each and every one of them. Thank you very much.

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