In an interview to CNBC-TV18, Sandeep Lakhwara, Managing Director, Deccan Gold Mines spoke about the company’s fund raising plans and the road ahead.
Below is a verbatim transcript of the interview on CNBC-TV18
Q: You all did commence drilling in one of your blocks. Take us through the details of that.
A: The block is called the Ganajur block. We have drilled in that area before but the idea with this drilling is essentially to enhance the quantum of the resource and may be even upgrade the quality in terms of grams per tonne. We are looking at Ganajur and associated with that there are also some satellite prospects surrounding this particular block and the idea is to do about 5000-6000 meters of drilling within this area.
Q: Any initial estimates of what could be the potential deposits when you do the drilling?
A: In terms of the deposit, we have actually identified a resource of around 308,000 ounces and what we are trying to do with this additional drilling is to enhance that resource. The potential for it to go to up to may be even half-a-million ounces of gold is very much there. So, let the drilling be complete and we would be announcing the result accordingly.
Q: How soon for the drilling to be completed?
A: This programme may take us about four-six months because the quantum of drilling involved is reasonably substantial and then there is time for assessing the results and checking the samples and so on so approximately four-six months.
Q: When will the company start making revenues?
A: After the mining license is actually granted, we believe production could commence within 18-month of that period. So let us say, if a letter of intent to issue the license is issued over the next three-four months, it would be sometime late next year when production would commence.
Q: Since there is no revenue coming in at the moment there is a lot of investment that is required, are you all looking at raising any kind of equity?
A: Yes we certainly are. We have some ideas in terms of raising money from the market from our existing shareholders, perhaps even a rights issue, is something that has been considered. The target date for that might be around July-August later this year. It is not definitive but that is the kind of indication we have.
Q: With respect to this mining lease application when are you likely to hear from the ministry of mines whether you all will be granted?
A: We are hoping that it gets done within the next three months because this is really the final stage where the file has been looked at by the Ministry of Mines. They have had it for close to two years; they have just raised a few queries with the state government and with the Bureau of Mines and both of these institutions are addressing those queries. Hopefully, once the query has reached Delhi I would say the turnaround would be within the next three months.
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