INTERVIEW WITH KEVIN ROBINSON, MANAGING DIRECTOR OF HEEMSKIRK CONSOLIDATED LIMITED (HSK)

“Los Santos Now Producing”

http://www.brr.com.au/event/48883

FRIDAY AUGUST 1, 2008 2:15 PM

BRR    Welcome to Boardroom Radio. Today, I am joined by Mr. Kevin Robinson, The Managing Director of Heemskirk. Kevin, thanks for joining us today.

10        HSK     Thanks very much James.

BRR    We’re going to discuss the last quarter’s activities and I’ll get you to start by giving some update on operations at the Los Santos tungsten mine.

HSK     Los Santos was commissioned early in the quarter and we’ve been scaling

15                    the project up ever since. I guess a couple of points of note that we had the official mine opening which was very successfully completed with over a hundred guests from all over the world turning up and now we’re very pleased with the way in which we have achieved the production status in such a short time being only a couple of years from the time that we acquired to project to

20                    achieving first production. The project through the quarter wasn’t without a couple of issues which were weather related.  We recorded around about two years worth of annual rainfall in a short space of time just as we were commissioning. What did enable us to achieve though is that we made some additions to the circuit which mean that from this point on, we can actually

25                    handle that sort of weather issue. But it’s very unusual because we only generally get 8 inches of rain a year at Los Santos, so it’s unexpected that that would happen again. It probably put us just a little bit behind where we would like to be in terms of production but that’s we always had a very optimistic schedule and I think the way the project is going and ramping up

30                    now, we’re very pleased with the progress. It will be ramped up in a series of stages and hopefully before Christmas we will have achieved the capacity that we’ve been aiming for.

BRR    Kevin, still looking at the Los Santos project, you’ve also got the go ahead for

35                    the aggregates business?

HSK     Correct. Very excited about the aggregates business because it’s a wonderful by-product. Not only are we using some of our wasted material, but also it provides Euro-denominated revenue to offset the Euro cost for the project. Therefore it provides us with an excellent natural hedge for all of our products

40                    across the range, because we sell also tungsten in US dollars but we buy barite in US dollars, so very pleased with the aggregates.

BRR    This is potentially a long-life mine that can be built within a short timeframe.

HSK     And we have already started acquiring the equipment to build the project and

45                    hopefully we will be selling the material, all going well, before Christmas.

BRR    And Kevin, can we be back at how things are progressing at Pajingo?

HSK     Pajingo is now focusing on a longer term mine schedule. The grades were low during the quarter but that was quite predictable based on our schedule because were mining more remnant ore and doing more development. We’re very keen to keep pushing the development forward to enable us to access newer resources and to commence the exploration programs and open up areas for further exploration. So we would anticipate there moving forward

5                      that the development to ore to (inaudible) (00:03:24) will decrease and therefore we should see an increase in grades going forward as well.

BRR    Kevin just finally, you have had your share buyback approved and initiated. Can you just tell us what was the motivation or the message you’re putting

10                    out here.

HSK     Yes, we’ve always said that we were to make sure that we would manage our capital structure wisely and in this case we are anticipating strong growth in the company’s production going forward and the share buyback probably indicates that we’re very comfortable with our position at this point in time and

15                    therefore the buying back some of the shares make sound fence. It’s very similar to what you see with the larger mining houses, the Rios and BHP, and they too manage their capital structures very carefully. So I think it’s very much in line with the original business plan.

20        BRR    Kevin, well it sounds like it’s been a solid quarter for us in all fronts and a steady progress as you said.

HSK     Very much James and we’re very comfortable with the way that the operations are all ramping up or providing their production flows and we’re looking forward to increasing production over the forthcoming quarters.

25

BRR    Kevin, thanks again for taking the time to us on Boardroom Radio and we look forward to speaking with Heemskirk in the near future.

HSK     Thanks very much James.

INTERVIEW CONCLUDED

Contact brr@brr.com.au for more information

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