Issue link: http://resourceworld.uberflip.com/i/685011
36 www.resourceworld.com J U N E / J U L Y 2 0 1 6 which we believed would de-risk the proj- ect as we developed it. This generates cash flow at an earlier stage with less CAPEX, although not every deposit can be devel- oped this way. We expect low operating costs which will help satisfy the need for continuous capital investment to fund fur- ther mine expansions. RW: Did you have any particular chal- lenges when building the mine and operating it? YT: There is no mining venture without challenges on many fronts. In the years I spent at BHP, I learned so much about facing challenges and risk analysis. The big challenge for management is to balance all the elements and still deliver value for your shareholders. For exam- ple, there may be great geology and robust economics, but don't forget about local fac- tors such as environmental studies as well as local stakeholders and the nearby social community that will benefit from the mine that may have concerns. At our Eagle Mountain Gold Mine, we are now in the commissioning phase and we hope to achieve commercial produc- tion in the second quarter of 2016 at a low operating cost. In three years we expect the mine to be producing 35,000 to 40,000 ounces annually. This may not seem to be a large mine, but we did it under budget for about US $5 million for Phase I devel- opment. We hope commercial production will be in the range of $600 to $700 per ounce, which will put us in the lowest quartile in this market. RW: Finding CAPEX funding is, of course, a major consideration. Where would you advise junior companies to seek capital cost funding? YT: We chose equity financing because we had the right capital structure as a company to do that. I don't suggest that people should always seek equity financ- ings; they should analyze their own capital structure and be aware of the needs of their key shareholders as well as the expe- rience of the management team and what the directors have to say. Today, there is a variety of financing options. There are royalty streaming deals which work best if you have low operating costs. If you have a big project, you might look at debt financing or maybe a joint venture with a bigger company. There is no one recipe for all. Bringing in a junior partner may not work as the capital and technical require- ments may be beyond the junior and its team. A junior partner that has built a similar mine before would be worth considering. RW: Is it better for a junior that is build- ing a mine to contract out mining jobs or buy the equipment and hire employees themselves? YT: I would say it is better to have your own equipment and employees because you control your own fortune and have lower costs. If you use contractors, what happens if something goes wrong? However, you may have to outsource a complicated part of the project such as underground development. Regarding juniors building mines, I think we will see more phased development min- ing projects such as the Goldsource and SilverCrest models as there are direct ben- efits as the project advances. In our case, our market capitalization has doubled in the last four months with limited marketing. There is a lot of talent out there that can be utilized to build these types of mining projects. n The Goldsource Mines Eagle Mountain scrubber plant and ore processing facility in Guyana, South America. Photo courtesy Goldsource Mines Inc.