your initial deposit *subject to change and depends on individual circumstances.
Forte Energy NL is an Australian-based minerals company focused on the exploration, evaluation and development of uranium and energy-related projects worldwide.
The Company changed its name from Murchison United NL on 25 November 2008.
Forte Energy has secured an extensive portfolio of uranium projects in the Republics of Guinea and...
Mark Reilly, Managing Director and CEO of Forte Energy Audio TranscriptJuly 27 2009, 12:24pm
Hello, this is Harry Norman for Proactive Investors. Welcome to another Proactive audio interview. Today I’m talking with Mark Reilly, Managing Director and CEO of Forte Energy, listed on the ASX, metals and mining sector, Stock ticker FTE.
Please give investors a brief introduction to Forte Energy.
Harry, Forte Energy is an ASX and AIM listed uranium explorer with significant uranium licenses in West Africa and Mauritania and Guinea. Forte, prior to November last year, was known to a lot of investors as Murchison United which prior to 2004-2005 ran a tin mine in Tasmania. The current board got control of Murchison in around 2004-2005 and set about introducing the uranium licenses which we now have into that company and commencing exploration work on those assets.
Forte Energy has just announced a maiden inferred JORC compliant resource estimate for the Firawa uranium project in Guinea. Are you pleased with this resource estimate, Mark?
Yes, we are Harry. The initial resource estimate is higher than we first expected, coming at 11.6 million pounds at an average grade of 300 parts per million (ppm). There is also the potential, as you’ll see from that Coffey mining report, there is potential for that resource to be increased once we receive the results back of some independent density testing that we’ve undertaken. There is the potential that a higher density number can be used to calculate the resource which could see the resource increased in the near term.
In addition, we’re extremely positive about the future upside of that deposit. Again, Coffey Mining has indicated that the resource is still open at depth and still open in either direction. So we believe there is potential to increase that resource significantly with further drilling, which we would be planning to undertake in due course.
Is the Coffey report that you mentioned, available on your website Mark?
Yes, it is, Harry. It’s attached as an appendix to the announcement that highlights the initial JORC reports from the Firawa deposit. So it’s attached as an appendix to the AIX and AIM announcement.
Forte Energy has a cooperation agreement with Areva for uranium exploration in Mauritania. How is this agreement structured? And how does it benefit Forte Energy?
Mark Reilly: Harry, the agreement which we entered into with Areva in June, 2008 saw Areva take an equity interest in the company which now stands at 12.6%. That investment took place in two tranches. They paid for 5% cash with their investment in the placement. They were given the balance of their shareholding for access to their significant database which they have over our ground in Mauritania. Also for their technical support and equipment. And we also have the use of their personnel on the ground during various aspects of the exploration program in Mauritania.
So it’s a significant benefit to us. Obviously, their [Areva’s] database is of significant benefit to us given our large land holding in Mauritania allows us to refine the areas of which we will be targeting under drill programs. And also having their technical support and ability to have their personnel on the ground is of significant importance as well. I mean Areva are, one of the world leaders, if not the world leader, in nuclear technology in the nuclear industry. So for us to have their involvement at that level is significant.
Tell us about progress at the Bir En Nar uranium project in Mauritania. And is Forte on track to identify an initial uranium JORC resource there during the second half of this year?
Harry, the Bir En Nar prospect in Mauritania is the most advanced of our license areas in Mauritania. We are about to commence shortly a resource drilling program of approximately 6000 metres with a view to defining an initial JORC resource which we believe we would have out by calendar end of 2009. And yes, we are on track to have that done.
What experience in the uranium business does the Forte Energy team have, Mark?
The experience that the board has in the uranium business is our technical director and chief geologist, Bosse Gustafsson. He’s very experienced in the uranium industry. He has over 35 years experience as a geologist, including ten to 15 years in uranium, predominantly in Sweden. Prior to joining Forte, he was working for the uranium division of the Swedish National Mining body. So he’s very experienced in the uranium field.
In addition, Lady Barbara Judge who joined the board in July last year, post the Areva transaction, is chairman of the UK Atomic Energy Authority. So while not strictly in the uranium business, she has strong knowledge of the nuclear sector. That, combined with the remaining members of the Board’s strong corporate and strategic management skills, we believe gives us an all round balanced management team to really make the most of our prospective asset.
What is Forte Energy’s current financial situation, Mark?
Harry, we announced the 1st of June that we were undertaking a capital raising of approximately AUD$10 million to institutions across Australia and North America and the United Kingdom. We have completed tranche one of that, which we have raised $6.6 million from. The placement had to be done in two tranches given that we can only, under Australian law, issue 15% of our capital without shareholder approval. At an EGM held last Friday on the 10th of July, the second tranche was approved by shareholders. And we’ll be moving to place those shares within the next seven days. So we’re in a strong financial position to carry out the aggressive drilling program we’ve got planned in Mauritania and Guinea.
What can investors expect from Forte Energy over the next 12 to 18 months, Mark?
Harry, they can expect a maiden resource statement out of the Bir En Nar prospect in Mauritania. They can expect, we believe, an increase in the Firawa resource in Guinea. And also results from other drilling programs that we have planned in Mauritania on secondary targets that we have identified in conjunction with Areva. So over the next 12 to 18 months, we’d be looking to increase the resource in Guinea, in Firawa. And looking to post that maiden resource in Bir En Nar and looking to increase those resources in Mauritania through further drilling as well.
What is the situation with Forte’s Australian assets, Mark?
Forte has some residual assets in Australia. Copper assets that pre-date the existing board. The board now considers them non-core and would be looking to put processes in place to realise those assets over the next six months we would have thought.
So what your thoughts on the prospect for uranium?
Harry, I’m very positive about the sector going forward. We read every day of new nuclear programs being announced in countries around the world that are going to require significant supply of uranium. So the demand is certainly going to be there. It appears on present figures that there is going to be a deficit in supply for some time to come. So that can only augur well for the uranium industry going forward.
This interview was recorded on the 14th of July 2009.