PLV - Pluton Resources

[Tony Schoer]

Hi guys,

I am the Mnagaing Director and CEO of PLV. I came across your comments on our company and decided to introduce myself.

I am happy to answer any questions about Pluton providing that I do not disclose any information that has not already been disclosed to the market.

I will also not be offering advice on whether you should buy or sell, and will not be trying to "spruik" my share price.

My purpose is only to answer your questions if I can.

Hope you who are shareholders are enjoying the share price!

Regards, Tony.

 

[Sean K]

Welcome Tony, I hope the members take advantage of your offer. In regard to the sp, yes, looks like you've had a great year! Congratulations! kennas

 

[cuttlefish]

Hi Tony,

I've got a few questions you might be able to help with:

* In the 5th July report you state there is the potential for a high grade, low impurity ore body 3km by 2km by 30m - this is a massive volume ore body in the hundreds of millions of tonnes - are you able to clarify what is meant by this statement?

* The adjacent coc katoo and koolan island iron ore deposits were mined for decades by BHP, and are now owned by Mt Gibson (MGX) and Portman (PPM). Do you have any information as to the original size of the ore bodies on those islands.

* In your ASX reports you show areas of the isthmus region and hardstaff point are of Irvine that have iron ore exposed - the island itself measures 3km by 3km according to the information in the reports. Are you of the belief that a large portion of the whole island is covered by this iron ore body?

* Working with the landowners to achieve a native title agreement and exploration permit is a major achievement which your team should be congratulated on. What are the next hurdles that need to be crossed before a drilling program can begin?

* There has been a lot of controversy over the mining of the co ckatoo island and kooland island deposits - not just from a land owner perspective, but also an environmental perspective - if exploration drilling proves successful, what obstacles need to be crossed before a mining permit can be granted.

* Based on your understanding of the projects on the adjacent islands, are you able to give any broad indications as to timeframes for commencement of drilling, how long a drilling program to prove up sufficient economic resources to mine would take, and how long the process of achieving a mining permit and building a mining operation may take.

Thanks for any insight you can provide, I appreciate that you can't disclose anything that is market sensitive and don't expect you to, and welcome again!

 

[Tony Schoer]

Thanks Cuttlefish, yes I am the real article!

In answer to your questions:

firstly I working on Koolan Island in 1988 and 1989 when it was owned by BHP. I was the JV Rep for Cockatoo Island when I worked for Portman from 2002 - 2004, so I know the area very well.

1) The ore body is visible in the cliff face on the eastern side of Irvine Island (refer the photos in the 5th July announcement). the length of that side of the island is about 3kms. The angle of the ore body is dipping at about 20% (from what we can see). The island itself from this area dips to the west. Rough estimate means that there is POTENTIAL for an ore body this size. We will know more when we drill. Not all ore will be accessible, how much? We won't know until we drill.

2) Don't quote me on this but I think Koolan was opened in 1967 and has mined about 120mt. It was closed in 1993. Aztec has reopened it with I think about 50mt in resources. Cockatoo was opened in the eary 1940's and closed in 1985. I think they mined about the same tonnage as Koolan, perhaps a little less. Portman reopened Cockatoo in 2000 and continued mining the same ore body by building a sea wall, then being able to access deeper into the ore body.

3) Irvine does not host iron ore over it's entirety. About half way across the island the geology and rock types change. We think that if the ore body was to continue it would be too deep. In any case the west side of the island is sacred to the land owners and we will be protecting that side.

4) We are very proud of our efforts to secure the native title agreement and exploration licence. We now need approval from the traditional owners of our exploration program (which they are looking at as a community this month) then we need EPA approval. We would expect to be drilling during the dry season around April/May next year.

5) We need the EPA to assess a mining application, this could be an 18 month process. The Govenment will need to weigh up environmental issues with benefits (royalties, jobs, social programs) to the land owners and value to the community and State. If we didn't think we could get State approval to mine we would not bother exploring. Environment is certainly an issue in the Kimberley, however so are benefits flowing to tradition land owners. A balance is needed. One of the big issues at Cockatoo has been the construction of a sea wall. We don't believe we need seawalls. The ore body at Cockatoo (and Koolan) is vertical. At Irvine it has twisted to become almost horizontal. We can cut back from the island itself, not from the ocean side.

6) I can't answer this until our Qtr report is issued later this week. The detail is in there. It would be safe to say that we aim to be mining in 2010/2011 depending on the EPA process. Check out our Qtr report for more detail.

hope this helps.

Tony.

 

[cuttlefish]

Thanks Tony - the prompt reply and the information you've provided make me confident that you're the genuine article, and the responses are greatly appreciated.

Its nice to see a progressive approach to shareholder communication.

I'm happily invested in your company and wish you all the best with it.

 

[arminius]

gday Tony, welcome, congrats, and thank you.

im sure many investors, including myself, would like to see the traditional owners benefit greatly out of this process. what do you see as the best way to reward/compensate the relevant communities, and do you see Pluton/ Portman taking a leading role in a longer term program, bearing in mind that cash alone is not the be all and end all?

do you see a problem with acquiring staff and infrastructure given the extraordinary demand?

thanks for making yourself available.

(steer clear of the political threads here...they're pretty full-on! lol)

 

[Tony Schoer]

Thanks Arminius,

One of the reasons we were successful with the native title negotiations is that we brought a new approach to the Mayala People. In the past many mining companies have negotiated with a win/lose mentality. ie: the mining company wins/the claimant group loses. We went in with a win/win mentality.

The Mayala People will of course get royalties, but just as important is for Pluton to provide jobs and social programs and infratructure. How much we pay and what we provide will be negotiated under a mining agreement when we know how many tonnes we have. The more tonnes, the more generous we can be.

It is very important for me personally and for our Board that the Mayala People benefit from mining at Irvine. I have spent a fair anount of time with the Mayala people and can say that they are not looking for handouts. They want funds for their childerns education, and jobs for their people. Also they want their elders to have a better quality of life. These are things that we can provide.

Tony.

 

[Tony Schoer]

Sorry forget your second question:

The mining boom has led to skill shortages. We will end up using a mining contracting firm for the mining stage I would presume. ie: Leightons BCG etc....

Infrastructure is not really a problem except it now costs more! Higher iron ores prices though are more than offsetting the higher costs.

Tony.

 

[arminius]

excellent tony, thanks.
i have a lofty vision where in 5-10 yrs or so, hundreds of highly trained aboriginals are in demand all over the country for their mining skills, fundamentally changing the cycle of poverty, depression etc.

Best of luck with the project. absolute top quality ore, lots of it, close to an assured market. with you all the way.

appreciate prompt reply.
Brett.

 

[Tony Schoer]

No problems, thanks Brett. Nice talking to you.

I share your vision in fact. It's time they were given the skills to be in demand.

Regards, Tony.

 

[sharethelove]

Is there any truth re talks between MGX and PLV re a merger/aqu? It would make sense re cost synergies and time lines??

 

[Tony Schoer]

Sorry sharethelove,

As is normal practice, PLV does not comment on rumours or market speculation.

Tony.

 

[Kauri]

Tony,
What is the geology around the island like, I seem to remember talking to people up at Koolan/Cockatoo when I was up that way a whiles back about a rich deposit island nearby but the problem was reefs not allowing any sort of port infrastructure for shipping? Can't remember the name of the Island now, might have been Irvine??
Cheers
...........Kauri

 

[Tony Schoer]

Hi Kauri,

No it isn't Irvine. Irvine, like C ckatoo and Koolan has deep water only 20 metres or so from the island. There are reefs, but tend to be in different parts of the coast next to the island. Irvine has at least two areas near our area of interest that could take a port for Panamax vessels (apx. 75,000 tonne) just off the island.

As an example, just 10 metres off Hardstaff Point the water depth at low tide is 50 metres, at full tide it is 60 metres.

Tony.

 

[sharethelove]

Tony,
I was sought of hoping for an answer from someone other than the CEO of PLV. Though I will take this opportunity to say awesome job to the PLV team...best ride in a while

 

[sharethelove]

Tony,

One question you may be able to answer (due to vast industry experience). How do you see the coming IO price increase effecting the share price of the 'new producers' like mmx and mgx.

sam.

 

[Tony Schoer]

re: IO prices

I think we will see a big rise next year. My tip (in my opinion only) is around the 50% level. You only have to look at current spot prices that are $170US/tonne out of India. they have increased about 100% this year alone and are way ahead of contract prices FOB Australia.

As for MMX and MGX they will of course benefit. There will be a fair bit already built in for rises next year, but I think the market may surprise on the upside.

i have been in this game a long, long time and while iron ore prices are high you can see that steel companies are still making good money. Chinese steel companies have already increased prices in anticipation of higher iron ore prices next year. they can take a very large price rise and pass it on.

it's a good time for the iron ore miners and explorers.

 

[Tony Schoer]

BTW Sam,

I am a big fan of Mt. Gibson. I know Luke Tonkin pretty well as I worked with him as a peer a few years ago. He is a good operator and the company has done very well. Any iron ore price rise goes straight to the bottom line for MGX.

note: I do not own any MGX shares.

Tony.

 

[arminius]

gday tony,

i read somewhere that when some chinese were unloading an io shipment they found bricks and stuff thrown in as filler. if this is true, besides being v dodgy, is it an indication that the indians are hoarding the good stuff because they dont have much. if so, do you rate the indian market as important as the chinese in the near future, (notwithstanding the gujurat holding).

also, being so much closer geographically, (ie cheaper transport costs), if you prove up buku io, which it looks like it could be about the best quality in Oz, if not the world, do you envisage a rock solid market at sky high prices for decades to come?

correct me if im wrong, it may not be the biggest, but would you say plv could well be about the best quality io company going around. (now, now, dont be shy)

thanks again.

ps. are the eagles gonna miss B cousins, or is it g riddance?....

thanks again.
brett

 

[Tony Schoer]

Hi Brett,

i have to be a little careful answering your questions as I have a no "spruik" rule.

I had not heard about the bricks and stuff being thrown in as filler. It waould surprise me if it was true. The seller would not get customers again.

In my opinion India is going to be very important to keep the boom going, but I think they are at least 5 years behind the chinese. The amount of red tape in India is awful, it slows development. However they are developing a strong middle class that wants the usual things like toasters, cars, homes, etc.... all needing steel. I think China will grow for the same reasons for decades.

Without being biased, the iron ore found on Koolan, Cockatoo, and (still to be confirmed by drilling) Irvine is the highest quality in the world. Look at Cockatoo, consistant 68% grades with very, very low impurities. The reason for this is because the three islands share the same ore body. This ore body used to be a giant river system. Iron was washed down the river from a source that noone has ever found. the iron, being heaviest, sank to the bottom and much of the imputities like phos, manganese, silica, alumina were washed away. the river bed folded and twisted over millions of years to create the one ore body found on these islands today. Very high in iron, very low in impurities.

As to whether PLV is the best quality IO company going around today? My Board would shoot me if I didn't agree. We are up 850% in our first 10 months. We have a blue blood institutional following. I met with the MD of JP Morgan (UK) last week and he said that we were his best performing stock. They own shares in thousands of companies. we are pleased of our acheivments to date, but the past is the past. The guys who bought stock today want me to douuble their money ASAP. That is the challenge, but we are up for it.

As for missing Cousins... mate you are asking the wrong guy... I'm a Tigers member.... if he plays again we have 1st bite of the cherry.... do we want him though, probably not.... do we need him? You bet we do!

Cheers, Tony.