The Interview: Richard Bevan

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 23 Jun 2015   Posted by admin

Cassini Resources managing director Richard Bevan.

23 June, 2015

SINCE listing on the ASX three years ago, Cassini Resources has been on a mission to fast track its Nebo-Babel development in the relatively under-explored West Musgrave area of WA. Managing director Richard Bevan spoke to Rachel Dally-Watkins about the company’s flagship project and its success to date.

Q. What is your educational background and how did you get started in the mining industry?

A. My background is not that conventional. I actually started in the healthcare profession, so my original educational background is a Bachelor of Science in Physiotherapy. I was part of a healthcare business that was listed on the stock exchange, and since that time I’ve done some management studies and also a range of different corporate engagements, giving me experience in capital markets, growing companies and raising money. We started Cassini about three years ago, so the resources industry is a reasonably new gig for me.

Q. How did you get to where you are now, in your role as managing director of Cassini?

A. Myself and Cassini’s current chairman Mike Young – a geologist and the ex-managing director of BC Iron – have known each other for probably 25 years or more, and it was he and I who got the company started.

We listed on the ASX in January 2012 and our intention with the company was to find a meaningful project, which led us to some ground out in the West Musgrave. We recruited some good technical people to complement the more commercial and corporate skill set that I have, and we’ve made a lot of progress since then.

Q. How has the company’s flagship project progressed since it was acquired from BHP Billiton in 2014?

A. When we acquired the West Musgrave asset back in May 2014 it was very much at the preliminary stage – it had an inferred resource and most of the work that BHP had done was looking at a larger, lower-grade project than what we are looking at. So over the last 12 months we’ve really progressed the project, and predominantly the Nebo-Babel discovery, in the way that a junior would approach it: as a higher-grade, lower production profile project.

It has involved a reasonable amount of drilling in the shallow, flat-lying deposits to increase the resource confidence – we currently have a predominantly indicated resource within the proposed open pits – and also some work to re-assure investors around the metallurgy and the underlying economics around the logistics and the location of the project.

Q. What were some of the highlights from the recently completed scoping study for the project?

A. I think there are a number of key things that dropped out of the scoping study – including just how low cost a mine we could have out there in the West Musgrave. We’re looking at an open pit mine, which is quite different to most other nickel sulphide mines in WA.

Another thing was the significant amount of nickel and copper it will be capable of producing each year. The study showed it could produce about 12,500t of nickel in concentrate per annum and also about 14,500t of copper in concentrate per annum, placing us as a reasonable scale producer.

Probably the last highlight was the scale and the initial mine life – we could achieve 15 years of mine life based on the current resource, and we’re highly confident we can increase that significantly.

I think the long mine life coupled with the fact that it’s a very low cost operation will hopefully allow us to hit a couple of high points in the commodity cycle, specifically  the nickel and copper price cycle.

Q. What is the significance of the new geophysical target identified at the Succoth prospect?

A. Not only have we got the resource at Nebo-Babel, but there are also many known mineralised hits within the project area. Succoth is a copper target about 13km from Nebo-Babel; there was a little bit of drilling done by BHP and we did some more at the end of last year, so we know we’ve got a fair amount of disseminated sulphide copper mineralisation close to the surface.

But the significance is that, looking at all the work that’s been done previously and what we know now, there is an opportunity to discover higher grade massive sulphide zones at depth. That’s what we’ve identified with this EM target at Succoth.

Q. What’s next for the West Musgrave project?

A. We recently raised just over $7 million through a placement and a share purchase plan, and that will get us through the next phase for the project, which is the pre-feasibility study. The scoping study showed we had good economics but that there were some opportunities to improve. The next phase will be about optimising the metallurgy and some of the mining studies that were done.

It will also allow us to do some exploration drilling at Succoth and a couple of other targets – we’ve got a pretty strong exploration program planned for the surrounding area.

Q. What timeline are you working towards for production at Nebo-Babel?

A. Our goal would be to get into production towards the end of 2018, if all things progress well. We think the pre-feasibility study will take us to the end of 2015 or early 2016, and then we’d hope to be able to do a focused final feasibility stage, then get into construction, and hopefully produce towards the end of 2018.

Q. What are your thoughts on the current nickel and copper markets, and how do you expect them to evolve in the next couple of years?

A. The nickel market is a very volatile market – currently the US dollar nickel price is at a reasonably low point in the cycle, although the Australian dollar nickel price is not so bad because we’ve had some de-valuation of the currency. However, the outlook for nickel and copper, which we will produce in equal quantities, is still very strong.

The majority of forecasters would still forecast an increase in both of those commodities over the next 12 months to five years, based on supply and demand. Nickel and copper are both consumer metals and demand is still expected to be strong for those metals, with the supply side expected to be a bit challenged in some parts – so the outlook for both commodities is fairly robust.

Q. What has been the best business advice you’ve received during your career?

A. One of the mantras that I live by is to hope for the best and plan for the worst. I think you’ve got to be optimistic and give things a go, but you really do need to have a mind on mitigating risk and preserving value for your shareholders – with today’s market that’s very much front of mind at the moment.