March 10, 2008
Business News Network
Power Breakfast with Linda Sims
Guest: Kabir Ahmed, President and CEO, Adex Mining Inc.

LINDA SIMS: Adex Mining recently announced the first phase of drilling at its property in New Brunswick. Will the junior miner be able to capitalize on high metals prices? To find out, we are going to talk to Kabir Ahmed, President and CEO of Adex Mining. Good to see you this morning. Thanks for joining us.

KABIR AHMED: Good morning, Linda. Thank you for inviting me to your program.

SIMS: Now I gather that this property in New Brunswick was previously mined, and was owned by BHP Billiton. Tell us what's there, and what state did they leave the site in?

AHMED: The property hosts four metals in two deposits, one being a tungsten-molybdenum deposit and the other being a tin and indium deposit. The tungsten and molybdenum deposit was the site of previous operations by BHP Billiton between 1982 and 1985. During the three years they were in operation, they milled approximately one million tonnes of ore. But unfortunately, in 1985, when metal prices collapsed, they had to permanently shut down the mine.

SIMS: Yes and of course we know what metal prices have been doing recently, but you still have a number of steps to go through to get this up and back into production?

AHMED: Yes we do. And what we've just announced, as you mentioned Linda, is a new exploration program. Our first target is the tungsten and molybdenum zone, simply because it was the past producing site and so it's easier to get that to production than the other zone. We've instituted a program of exploration and definition drilling and we'll be upgrading the mineral resources to current National Instrument 43-101 standards, which I'm sure you are familiar with, and that will enable us to move to feasibility and ultimately to production.

SIMS: We don't hear a lot about doing business in New Brunswick in the mining industry. What's it like there versus, say, Quebec which has done a lot to promote mining?

AHMED: The Quebec jurisdiction is very friendly; however New Brunswick is also clamouring to support the mining sector. The Premier of New Brunswick, the Honourable Shawn Graham, has certainly indicated that mining is very critical to their self-sustainability program for 2026.

SIMS: How are you funding the exploration and what will presumably be the development of the mine?

AHMED: We've done a series of equity financings totaling C$12 million. Most recently, we did a C$3 million flow-through financing which will fully fund the drill program to the end of 2008.

SIMS: And that's until 2008, now you say you are going to start with the tungsten-molybdenum, but you've got that tin and indium sitting in the background. When do you to turn your attention to that?

AHMED: I think in the next six months we're going to be focusing our traction on that as well and again bringing those resource estimates to indicated and measured status, which would allow us to move to feasibility and ultimately to production. Interestingly enough, you probably know that indium is a very in-demand metal. It's used as a thin-film coating for LCD and flat screen TVs and is also used for photo-voltaic cells. So I think there is a great blue sky potential for that zone as well.

SIMS: Right. Now are you looking to bring this into production on your own or would you like to partner up with somebody with experience in that area?

AHMED: I think we are quite capable of bringing it to production on our own. We've got a proven management and technical team here, but I think it is always advisable to look at partnership opportunities when they arise and certainly we would be open to that, to accelerate the pathway to production.

SIMS: You may get partners, and you may also get a takeover offer. Is that a possibility, you think?

AHMED: That's always a possibility, Linda. As we execute in our development program and we achieve milestones in development, certainly the value of the company will increase over time and I think we might be attractive to a number of majors.

SIMS: Now we have watched your stock; it had a nice spike in November but has been sliding since then and is in a bit of a range at this point. Why do you think that is and what do you have to do to get investors excited about your stock again?

AHMED: I think all the junior mining companies have seen some volatility in the stock market over the last six months. In our specific case, I think when we have drill results out to the market, the market will clearly value the company at its full potential at that point.

SIMS: I was going to say that. I guess there's not a lot you can tell us about what your inferred reserves are at this time?

AHMED: Yes, we can. On the tungsten-moly we have an inferred resource estimate that we had done in 2006 by Watts Griffis and McQuat. At that time they indicated that there were 13 million tonnes of tungsten-molybdenum. The tungsten grade was approximately 0.35% and the molybdenum grade was 0.2%. What that means is approximately 100 million pounds of tungsten and approximately 60 million pounds of molybdenum. In the in-ground value at today's market price we estimate at above C$2 billion.

SIMS: Okay, so now you just have to get ready to get it out of the ground.

AHMED: Exactly.

SIMS: Well, thanks for coming in and telling us about it this morning.

AHMED: Thank you Linda. It has been my pleasure.