Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is president and director of Avrupa Minerals (TSX-V: AVU)(OTC: AVPMF) Mr. Paul Kuhn. Paul, thank you so much for joining me.
Paul Kuhn: Hey Gerardo, thank you for having me here. I'm talking to you from Pristina, Kosovo.
Gerardo Del Real: Well, I know you just came off an overnight flight and layover, so I really appreciate you taking the time. You had some news here on February the 6th, and the headline reads: Avrupa Minerals Accepts Slivovo Study and Approves $8 Million Drill Program.
That headline was interesting to me, because the $8 million drill program equates to approximately the current market cap for Avrupa. I thought I'd have you on to talk a little bit about the details about the program, then we could segue into what's going on with the other projects. Because of course, Avrupa is a project generator. You have a lot of irons in the fire right now.
Let's start with Slivovo and the $8 million drill program that you just approved.
Paul Kuhn: So Slivovo is our gold discovery. From 2014 we brought in a partner, Byrnecut International, a private Australian mining contractor. They've spent over 4 million euros on the project so far to gain 85% of the program. They just handed to us a very detailed study on how to move forward on the project, and they're looking forward to spending this year following up on their recommendations.
The study follows the program from start to the present. It included quite a bit of drilling in 2016, and the fact that in order to build the mine here we need to get more ounces as a resource. To that end, they have put together a very big drilling idea for 2017.
It's a three phase program that they're proposing. The first phase is a little bit more exploration than anything else. Basically they're targeting a number of geological, geochemical, and geophysical anomalies to increase the size of the Slivovo gold deposit.
The first few holes they want to drill are important ones in that they're looking for extensions of the known mineralization. So the initial plan, Gerardo, is to drill somewhere between 16 and 20 holes starting in April, or depending on the weather, later in April... to aim for targets that appear to have good potential for containing more ounces of gold.
That's the first phase of the program. Should this drilling be successful, then second and third phases will be more detailed infill sorts of drilling to really add in the ounces to the program. They anticipate that the whole project, if it's completed based on success, could cost as much as $8 to $8.5 million Canadian.
Gerardo Del Real: Excellent. Just to be clear, Paul, their stated goal – assuming they're successful and you're successful – is to put this thing into production. Is that correct?
Paul Kuhn: Our partner is a miner. They would very much like to put this into production. In order to do that, their study indicates they've got to basically double the size of the known resource at this point.
There's 125,000 ounces and they'd like to see it at 250,000 or 300,000.
Gerardo Del Real: Excellent, excellent. Now I know that you currently own I want to say approximately 15% of the project. Now in the event that they are successful, they're able to double that resource and go ahead and complete the full phase three program, I assume reading from the news release, that your interest will convert into a 2% net smelter royalty (NSR) where you're pretty much carried.
Is that correct? Because you're not participating in the funding of this program.
Paul Kuhn: That is correct. We have elected to not continue funding the program because it's quite a bit of money, and we don't have that kind of money. 15% of $8 million Canadian is well over a million dollars.
Byrnecut is quite capable of funding it themselves, we would like to use our money that we have to find more of these things in Kosovo.
Gerardo Del Real: Excellent. Let's talk about that a little bit, Paul. It's been a few months since I've had you on. Can we talk a little bit about the Alvalade JV, the Covas JV, and some of the things that you're seeing there on the ground?
Paul Kuhn: First of all, in Kosovo we would like to do our own recon and generative work, and see if we can come up with some more of these Slivovo Gold targets. Kosovo is historically a zinc and lead country.
We're looking at both. Both commodities are popular right now, the prices are good and we're in the right country for that. As far as our other projects in Portugal, that being Covas and Alvalade, we're working with our partners right now on how to move those forward.
We've not done anything on Alvalade this past year, as our partner has had financial issues. We hope we can solve these issues pretty quickly and get the project moving forward under some sort of consolidation. As far as Covas goes, at the moment it is also on hold.
Again, we know our partners on that one is looking for ways to move it forward, and we hope in the next few weeks, or a month maybe, we'll have a solution on how to move that forward.
What's really exciting in Portugal is we've got several other licenses that are available for joint venture. One of them is the Alvito license, and it is an iron oxide, copper, gold target. We're very close to working on completing a joint venture agreement on that one. Like I said, iron oxide, copper, gold.
We have two copper-zinc licenses available for joint venture, and I'm talking to a couple of companies about those right now. There's obviously more interest in zinc these days than there has been in a few years. South Portugal is a zinc and copper producing area, and we're right in the middle of it.
Gerardo Del Real: Excellent. Now am I accurate in saying you still hold nine exploration licenses in all? Is that accurate, three in European countries including the six in Portugal, the two in Kosovo, and the one in Germany? Is that still accurate, Paul?
Paul Kuhn: That's accurate Gerardo. In Kosovo, obviously we're only a part owner of one of the licenses. We do have another exploration license where we're doing some work on right now. Germany we have one license, and for now we have six licenses in Portugal.
We've made several applications in the Pyrite Belt and we hope that we're able to take those licenses on, if and when they're issued to us later in 2017.
Gerardo Del Real: Excellent, well Paul, anything else you'd like to add? In this better price environment for zinc and base metals, and precious metals as well. You're a company that has a market capital of approximately just over C$8 million, and I want to say approximately just over C$12 million fully diluted Canadian.
There's definitely plenty of upside, especially if your partners are able to execute and make a discovery here of significance. Anything that you'd like to add or that you can share with us here about the plans moving forward for Avrupa?
Paul Kuhn: Gerardo, we're pretty excited about about 2017. As you've noticed, the price of the commodities has gone up. We're well placed in our countries to move our projects forward, and to be honest with you, people are contacting us – cold calls.
We're getting several companies asking about having a confidentiality signed for our projects. I was just at the Vancouver Roundup Conference a couple of weeks ago, and there's quite a bit of excitement throughout the industry up there. We had quite a bit of discussions on potential joint venture partners.
Look for the first half of 2017 for Avrupa to be pretty positive.
Gerardo Del Real: Fantastic. Well Paul, again, I want to thank you so much for your time today. Thank you for coming on, hopefully we can have you back on soon as those joint ventures develop.
Paul Kuhn: We'll keep you posted Gerardo. Again, we're all pretty excited about how things are moving forward here.
Gerardo Del Real: Excellent, thank you again Paul.
Paul Kuhn: Yeah, catch you later Gerardo! Thanks a lo