The following guest post by Mining Investor Oliver Gross, the interviewer of the President of Blackheath Resources, represent the views and opinions of Mr. Oliver Gross and the President of Blackheath (the person interviewed), I have no prior or existing relationship with any person or entity named herein. I own no shares of any entity named herein.
- What makes the Blackheath story so interesting compared to the hundreds of junior mining companies out there?
Blackheath Resources (BHR:TSXV) stands out from other companies because it focuses on tungsten, a high value metal in great demand and short supply. The outlook for tungsten, an industrial metal with unique properties, is very positive. We hold five of the top past-producing tungsten metal mines in Portugal, all of which are accessible by road and have existing infrastructure including electricity and water, and we plan to return the best of these mines into production.
- Why is tungsten a lucrative commodity market? What is tungsten used for?
Most of the world’s tungsten is in China which also uses most of it. This creates pressure on supply in the rest of the world. Tungsten tops the critical metal supply lists in Europe, the United Kingdom and the USA. There is a shortage of tungsten outside China and independent expectations are that demand over the next few years will significantly outpace supply, possibly resulting in ongoing price increases.
Tungsten is a critical metal with a number of industrial uses including tungsten carbide used for cutting and grinding, as a long lasting hard-wearing (able to handle a lot of wear and tear) material, and in speciality steel alloys, tool steels (specialty steel with strict quality procedures and qualities necessary to perform a specific task, such as machining) and super alloys for gas turbine engines in particular. It is also used in high technology electrical components and in tungsten jewelry.
- Please give us insights about the advantages of doing business in Portugal.
Historically, Portugal was a major supplier of tungsten to Europe until depressed prices caused mines to close down in the mid-1980s. A renewal of mining activity is seen by the government as being a major contributor to meeting the economic challenges that the country faces. In all levels of government and local communities, support has been encouraging. The mining laws are well-established and realistic and there are no significant hurdles to the proper development of a mine. Our management team is very familiar with working in Portugal and we work closely with our established technical team based in Portugal, a group that has extensive experience and is highly regarded at all levels in the country.
- You have had solid news flow during the last several months. What can investors expect for the rest of 2015?
Our main news has been the completion of a successful independent NI 43-101 technical resource report for our Covas Project, which is a medium sized, higher grade project at or near surface and also our Borralha Project with initial drilling indicating a potential for a large, bulk tonnage deposit at surface. Both of these deposits could turn out to be open pit mines. We want to continue drilling at Borralha in order to gain sufficient information to complete a NI 43-101 resource estimate, which we believe could be very impressive, and also to drill some of the high grade areas at Covas. In particular, at our Bejanca Project, we have a very large historic, non-compliant resource of valuable tin and tungsten minerals in sandy soil on surface. We want to test this to find the best area for initial mining. This would be a simple washing operation with minimal capital costs and could be very lucrative if it could be brought into production quickly.
- Can you tell us more about your management team and Board?
Our highly experienced team is very familiar with Portugal – several members were previously involved with Primary Metals, a company which was listed in 2003 at $0.15 per share and owned the historic Panasqueira tungsten mine in Portugal. The company was subsequently sold at a significant profit to Japanese interests in 2007 for $3.65 per share.
- What about your current financial situation and financial outlook?
Blackheath is completely free of debt and on-going funding is completed through equity issuance through this development stage company.
- Are you able to provide insights about your long-term goals?
Blackheath is currently the largest landholder of tungsten projects in Portugal. Our longer term goal is to selectively develop these projects through the feasibility stage towards production, starting with Bejanca and early production possibilities if this proves feasible. We also believe that with a strong tungsten asset base and increased value, Blackheath could be an attractive takeover target in the future.
- Please tell us more about your major shareholders and supporters.
We are very pleased to welcome some major long-term investors in Blackheath, including Shandong Donglin, a family-owned Chinese conglomerate, which owns around 13% and Shining Capital, a Chinese fund operated out of Hong Kong, which owns about 9% of Blackheath. Also, Ernesto Echavarria, a Mexican investor, owns around 8% and management, directors and insiders hold around 30% of the shares.
This is not investment advice. All facts and opinions are those of Blackheath and should be checked and verified by the reader. As always please do your own due diligence. The author is biased as he is a shareholder of Blackheath stock.