First Point Minerals Corp
(TSX.V: FPX)
Peter M.D. Bradshaw, President & CEO
[display_podcast]
COMPANY PROFILE: First Point Minerals Corp., is a Canadian exploration company engaged in the acquisition and development of economic base metal, mainly nickel and precious metal minerals deposits in the Americas. First Point holds six nickel-iron alloy properties in Canada and the USA, as well as several gold and silver properties located in Mexico and Central America.
TRANSCRIPT
WSR: Talk about the recent nickel-iron alloy discovery on your Klow Property in Central BC.
Peter Bradshaw: First of all, maybe a little background to bring your listeners up to date. We have talked about this story before. The nickel occurrences, which we’re pursuing, are nickel-iron alloys where nickel is in the form of naturally occurring stainless steel; that’s what it is. The mineral itself runs about 75% nickel and 25% iron and there is no sulphur, which is also a key. This mineral occurs as widely disseminated as a — like a porphyry style of deposit. I’m sure a lot of your listeners are familiar with porphyry copper deposits. This can be characterized as a porphyry nickel deposit. The Klow deposit, which we put out a news release yesterday, is in North Central BC. It is one of five properties, which we have in a string going north. The southernmost one is Decar, which is optioned off to Cliffs, a major iron ore mining company. The other four, we own 100% ourselves, but they are in an earlier stage. Klow, we completed some fieldwork and have looked at the samples and found mineralization over a significant-sized area open in several directions. So, this is very early stage, but the same style of mineralization at Decar, i.e., the nickel-iron alloy.
WSR: Can you also bring us up to speed on the Decar nickel alloy property?
Peter Bradshaw: I certainly can. Late last year, we formed a joint venture with Cliffs; used to be called Cleveland-Cliffs. This is a $6 billion market cap company that mines iron ore and coal. They made a strategic decision about a year and a half ago to get into the other components that go into steel, of which, nickel and chrome are two key ones, and those were ones that they have acted on. They really liked iron — nickel deposit because it fits very well, not only with their strategic design to get into nickel, but also with their technical expertise because this is bulk tonnage as iron ore deposits are, it’s open pit as iron ore deposits are. The separation of it would be magnetic separation because this is a highly magnetic mineral. They use magnetic separation in their iron ore business. It would then be palletized and sold directly to steel manufacturers and that again is what they do, they pelletize their iron ore and they sell it directly to steel manufacturers. In fact, they supply about 40% of the pelletized iron ore in North America. So, this is an incredibly good fit with them and gets them into the nickel market. From our point of view, someone with very deep pockets, and also excellent metallurgical and mining facilities to complete a feasibility on this project and look at getting it into production.
WSR: With that in mind, how well positioned is the company to capitalize on some of the trends in nickel-iron with your six properties?
Peter Bradshaw: We’re now very well positioned and we’ve optioned off one, like I say, which we think is very much to our advantage. We have the other five ourselves and so we can advance those with our own funds. The pro forma financials we did on nickel were at $5 and $7 a pound. Nickel is now over $9 a pound. So, the trend in nickel price is very favorable. And other forms of nickel, in particular, the laterite or oxide nickel, I’m sure some of your listeners are aware of those, the cost for those have just skyrocketed. In fact, several of them have shutdown with very high capital cost because of very high operating costs. So, this in our view is just an ideal time to bring on this new class of deposit and particularly the potential size is very significant.
WSR: What are some of the factors that make First Point unique from some of the other players in the sector?
Peter Bradshaw: Our style of deposit makes it unique for a start. Other thing I should mention about the style is it is characterized by other people as a green mineral. The absence of sulphur I mentioned earlier; that has two big advantages. If you have nickel sulphide as almost all the nickel deposits in Canada are, you have to send that material to a smelter, which then extracts the nickel from the sulphide. That is a fairly messy process, and sulphur goes into the atmosphere and industry has done an awful lot better capturing that now, but it is still a problem. The other thing is the material you don’t send to the smelter, the waste rock and the tailings on the property have residual sulphides in them. They break down by natural weathering and cause what’s called acid mine drainage, which can be a very significant problem. Again, you can engineer around it. Now, modern mines do solve those problems, but at a cost. So, to totally avoid either having to send your product to a smelter and not having acid mine drainage is a very significant advantage and will undoubtedly make our permitting an awful lot easier.
WSR: Perhaps you could walk us through your background and experience and that of some of the key management of First Point Minerals.
Peter Bradshaw: The two key people are myself and Ron Britten. I’m a mineral exploration geologist. I’ve worked in about 40 different countries around the world. I have been all my life looking for new deposits and I’ve been fortunate enough to be directly involved with three at the exploration stage, which have gone through a full feasibility and gone into production. So, I have a very good idea of what an ore body looks like. The other key person is Ron Britten. He has also worked internationally, quite a few different countries, and he has been directly involved also in two deposits, which are mines. So, we collectively have more years of experience and I almost care to admit that we do have a very good background of knowing what a potential ore body looks like at the early stage.
WSR: Looking over the next 12 months, what are some of the milestones and goals and objectives that the team hopes to accomplish?
Peter Bradshaw: On the Decar side, the Cliffs at their lab are working on the metallurgy to get a reliable and cheap metallurgical process. We’ll be able to announce that whenever they’ve got that complete. Continuing with Decar, early spring, we’re going to do routine geophysics over the property, and then starting in spring and going through summer, we’re going to have an extensive drilling campaign. So, investors can expect a reasonably steady flow of information from that. This style of deposits; we’re the world leaders in being able to recognize those. So, with our staff, we’re looking at a number of other opportunities around the world and it’s hard to predict when we will be able to announce new discoveries, but I think our investors can rest assure that there are going to be a number and they could be at almost anytime. Our objective is to retain these properties 100%, do sufficient work on it for it to be really attractive to a major company and then go and joint venture it as we have with Decar to a major company.
WSR: In terms of investors and the investment community, do you think that the company message and your story is completely understood and appreciated by them?
Peter Bradshaw: No, I don’t, but I think it’s getting to be understood. We’ve had three of the senior letter writers; all have written us up, John Kaiser of Bottom Fish, Larry Roulston, Resource Opportunities, and The Hard Rock Analyst have all been recommending our stock, and that has certainly brought a lot of readers to have a look at what we have. Canaccord put us as one of 21 companies on their 2010 watch list and that has helped spread the word quite a bit. So, people are understanding what we’re doing more. But, because this is quite a new style of deposit, it’s taking sometime to get the message out there and for people to get comfortable with it. We certainly feel that we’ve got probably another year, we’re steadily sending out information and talking to people and presenting at conferences before the story will be known by a large number of people.
WSR: Why do you believe that First Point Minerals — why does FPX represent a good long-term investment opportunity for potential investors?
Peter Bradshaw: The real long-term is we’re just at the cusp of developing this new class of deposits. There is a lot of upside as Decar develops. I mean there is no question our share price is going to reflect as we move through a scoping study and feasibility and completion of feasibility and on to a production decision, and then with our ability to recognize this style of deposits and look for new ones, that I’m very confident adds a lot of shareholder upside over quite a length of time. I’m always hesitant to put time value on things, but I think realistically the story is going to unfold over many quarters or even a few years. It’s not going to be a one to two month thing, but we should see pretty steady growth over that period.