Lithium prospects for Whim Creek: A breakdown from Anax Metals CEO Geoff Laing

Paul Sanger: I am Paul Sanger for the Finance News Network, and today we're talking with Anax Metals (ASX:ANX) and it has a market cap around 15 million. Anax Metals is an exploration and development company with a vision to deliver outstanding shareholder return through innovation in exploration and resource development. Headquartered in WA, the company has three active projects within the state. We welcome today Anax Metal CEO, Geoff Laing. Geoff, welcome to the Network.

Geoff Laing: Hello, Paul. It's a pleasure to be with you.

Paul Sanger: Now, Geoff, this is the first time that we have spoken. Can you give us a little brief overview of Anax Metals' three projects, in particular, your flagship Whim Creek Copper Hub?

Geoff Laing: Yeah, sure. Well, Whim Creek most certainly is the flagship project. We've got another project in the southern part of Western Australia, Mount Short, which we're exploring for lithium on, and then there's Loudens Patch, which actually sits up next door to Whim Creek. But really the story is all about Whim Creek which sits, for those that are not familiar with the project, between Port Headland and Karratha. And we've outlined an 8 year mine life. For the project, we'll be producing copper, zinc and lead concentrates over the eight years, delivering about 50 million a year in free cashflow from the project. It's a Brownfields project, so near-term production, and of course it is a poly metallic project. And we're moving ahead now rapidly into the development phase for the project.

Paul Sanger: Fantastic. And Geoff, the Whim Creek project is clearly the focus and the key short-term value driver. The project, as you said, is Brownfield's opportunity. How much new infrastructure is required and how much CapEx is required to get it back into production?

Geoff Laing: So the project was operated back in 2009 by Straits Resources. There's significant infrastructure already on site. So what we've got to do is refurbish some of that infrastructure, but it has already been refurbished. We'll need to build a concentrator and then put in some additional equipment for the heap leach, which we'll run. So we'll have two processing facilities, the concentrator and the heap leach, and that'll take us to about 70 million in CapEx. And then we'll require an additional 15 million in working capital. So around about 85 to 90 million to get into production is what we're looking for.

Paul Sanger:
And on the basis that the funding requirements are met, how quickly can Whim Creek come back into production?

Geoff Laing: Well, we've now got the project to a point where it's fully permitted, so we can move very rapidly once we're in the process obviously of securing the funding. Once that funding's in place, we expect that it'll be between 12 and 18 months, so it's around about 15 months to take it from completion of funding through to production.

Paul Sanger: You said it's fully permitted because we know permitting can be a real restraint on companies and all the permits are done, which is a major positive for the project, no?

Geoff Laing: It is. Permitting is such a big deal these days and especially getting permitting for tailings dams. We've elected to go for in pit tailings, because it is a Brownfield site we'll have the ability to do that. So that is one of the greatest benefits. And just while we're talking about that, we expect to turn this into a processing hub for the greater Pilbara region. And because we've got all that infrastructure and capacity to store lots of tailings, we'll be able to treat material from other assets around us.

Paul Sanger: Fantastic. And the project is targeting 10,000 tons per annum copper production currently over a eight year mine life. Can you grow this production beyond 10,000 tons per annum, and if so, how?

Geoff Laing: Yeah, certainly. Scalability is always a focus from the off-takers, the funders, everyone's looking for scale. We've got two of our resources are open depth, so there's immediate organic growth for us. But equally importantly, as I mentioned before, there are other assets in our region that will be looking for a processing solution and we've identified two already and we're in some discussions where we think we could probably double the copper production to closer to 20,000 tons per annum. And that's certainly our ambition at the minute.

Paul Sanger: And what is the status of discussions with traders and off-takers on potential funding opportunities?

Geoff Laing: Yeah, so we've engaged with a number of potential off-take partners. Anglo-American we've talked about. There are others that we are also talking to, making sure that we get the best outcome from an offtake perspective and the funding that comes with that. And we're hopeful that in the next few months we'll have a funding, an offtake solution in place.

Paul Sanger: And to finish up, recent drilling has indicated there's potential for a lithium discovery. Given you're surrounded by several lithium and gold projects such as Azure and De Grey, what opportunity do you see here?

Geoff Laing: Yeah, well the Pilbara is really super hot at the minute. We have identified some lithium potential as you say, and we sit on the western boundary of De Grey's tenure, so highly prospective both for gold and lithium. And we remain very focused on our copper project, but of course with lithium potential there, we've got our expiration team really running the ruler over the assets at the minute and certainly we're looking forward to providing more news on that in the near future.

Paul Sanger: Geoff Laing, it's been an absolute pleasure. Thanks for your time today.

Geoff Laing: Thank you Paul.