Calidus Resources (ASX:CAI): Knitting through its debt and here to stay – with lithium in sight

The 2^nd annual Super PITch event at Digger & Dealers in Kalgoorlie provides mining companies five minutes to ‘pitch’ their company’s story to investors. 

The challenge was created by Discovery Capital Partners and this year is sponsored by The Market Herald, RSM and Corporate Story Time.

Sonia Madigan:

We’re from the floor at Kalgoorlie’s Super PITch event. I’m with Calidus Resources (CAI) MD, Dave Reeves.

Now, Dave has a gold operation. It is actually producing already, isn’t it?

David Reeves:

Yep, that’s correct. We’re doing about 70,000 ounces per annum at the moment and looking to step it up to over 100,000 ounces per annum.

Sonia Madigan:

So how do you do that? How do you step up production?

David Reeves:

So we’ll be bringing in new deposits, higher grade. We’ve got, I think, one of the highest deposits in Australia called BlueSpec, 24 grams a tonne sitting down the road, so I’ll bring that in. 

We’ve also recently announced a joint venture with Haoma Mining. 

They’ve got a lot of high-grade deposits sitting around as well, so if we displace low-grade material with high-grade material, more ounces, more cash flow. 

Sonia Madigan:

Well given that you are producing, does that mean your cash flow [is] self-sufficient? 

David Reeves:

Yeah, look we are. Last quarter we made 10 million – admittedly half of that then went back into paying off some of the hedges that we’ve got with the bank – and we still [owe] 81 million dollars of debt to the bank but we’re chipping away [and] we’ve taken that down 30 million since the start of operations.

Our hedge profiles [are] coming down so we’ve got about another 18 to 24 months of just sticking with the knitting, working through the bank deed, and hedge slowly increasing production during that stage.

Sonia Madigan:

So 17 cents shares, is being here at the Kalgoorlie Diggers & Dealers about trying to get that up?

David Reeves:

Yeah, look, we’ve had a tough birth to life at this time last year at the Super PITch.

I think [we were] about 80 cents, so it’s been a bit of a tough year, it’s fair to say, with commissioning issues.

And this is more about just, I suppose, communication, letting people know, reminding people that the operating issues are now sorted out. We are making money, we are looking at that next stage of growth now and that’s 17 cents, a real bargain to be had we think.

Sonia Madigan:

Alright, you’ve got one minute to pitch your company to our audience.

David Reeves:

Alright, so existing gold producer, 70,000 ounces per annum, profitable at that, moving to 100,000 ounces which means more money, huge upside with the exploration ground and recent joint venture and that’s not all we’ve got our lithium spin-out coming up later this year as well with some exciting ground there.