Doray managing director Leigh Junk. Images: Doray Minerals.
BY CAMERON DRUMMOND
A YEAR on from taking the reins at Doray Minerals, managing director Leigh Junk has overseen a well-executed turnaround strategy, with the company shifting its focus to the ramp up of its new Deflector operation and extending its resource base.
Q: What changes have you made at Doray since taking over as managing director?
When I started as managing director a little over a year ago, the company had almost $70 million in debt and two operations that were not performing to expectation.
The growth and drive for the company in the short term had to come from its operations. For the company to be successful, Deflector had to get up and going and consistently hit targets and produce cash. The turnaround strategy put in place was to build from the operations up.
One of the changes to the activities of the company was the requirement to reduce regional exploration and concentrate exploration efforts solely on our operations. This was quite a shift for Doray, as up to that point there had always been quite a strong focus on regional exploration.
A difficult decision had to be made on Andy Well which was in part due to the financial position the company was in at the time.
The company could not sustain a capital investment period at Andy Well while Deflector was still ramping up and yet to reach consistent production and cash flow.
Deflector achieved steady state production in the December quarter and has been building from there since. The impressive results being achieved now have been the result of a lot of hard work from all the team.
We have executed the turnaround strategy.
The company is in the healthiest shape it has been for years with regard to cash and debt, and Deflector continues to impress and outperform.
We have been delivering on expectation this year and building a track record of achieving what we said we were going to do.
There is a real culture of backing ourselves to achieve goals and a large emphasis on team work and achieving it together. There is a lot of hard work ahead but we are on the right growth path, beginning at Deflector and building from there.
Q: How has Deflector recovered since lower than expected production in mid-2017?
Each quarter this year has been an improvement on the previous and we are now producing at a rate that is exceeding all expectations of the life of mine model.
We have been processing solely underground ore at Deflector for less than a year and to be producing at these levels is a great achievement. We are ahead on our mining and processing metrics and are set to achieve or better guidance for the financial year.
To be in this position after a lower than expected start to the financial year is a fantastic result.
With what we have learned about the orebody over this time, we are really only scratching the surface of the potential for growth in both production and resource base. I’m really looking forward to the next year of exploration in and around Deflector and what we can discover.
Q: How is development of the Da Vinci lodes tracking, and when do you expect to complete a PFS?
Da Vinci has been a really exciting discovery and we are extremely encouraged by what we have seen to date.
We are currently completing underground development through Da Vinci which has delivered additional high grade production already. This will also provide underground drilling platforms to expedite the drill out to evaluate a potential full scale mining scenario.
The high grade ore exposed in the development to date has been impressive and correlates with what was seen in the drilling.
Da Vinci is open along strike and at depth so we will continue extensional drilling from surface as well, but the current outline of known mineralisation will be the subject of the economic assessment.
We have to draw a line in the sand and complete a mining study on the known area, initially, that we can potentially incorporate into the mine plan while we continue to drill to extend it. This will fast track any potential additional production while we look to extend our resource base and operations.
Q: What are the next moves for the Andy Well and Gnaweeda? Is there more exploration on the cards for this year?
We are currently evaluating all our options for the Andy Well project which includes Gnaweeda. There is a large resource base of more than 800,000 ounces of gold between Andy Well and Gnaweeda with all associated infrastructure in place. We are currently assessing the best way to maximise the value for Doray from these projects. This assessment is expected to take until approximately mid-year.
Q: Final thoughts?
This has been a challenging year after starting from a rather difficult position. I am pleased to say we have navigated through that period and Doray is now in a very strong position.
The growing cash balance, combined with a debt level in June this year that will be less than a third of the size it was when I started, puts us in a position to really drive the business forward.
We have plans to increase the investment in exploration at Deflector over the next financial year to expedite more of our exciting near mine exploration strategies, and looking towards building an increased production profile and mine life.
On a personal note I love getting to site and interacting with the team, and seeing the results of the executed plans. I’m really impressed by the way the numerous challenges have been approached, and I’m proud of what everyone has been able to accomplish together this year.
