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Electra Gold is committed
to sustainability in the exploitation of industrial materials through exploration,
research for new products and the use of innovative methods
Electra Gold Ltd.
6630 Madrona Crescent
West Vancouver, BC V7W 2J8
Interview conducted by:
Lynn Fosse, Senior Editor
March 24, 2005
Doug Stelling, Chairman, CEO
Doug Stelling founded the
Electra Resources Corporation (that has evolved into the current Electra Gold Ltd.) in
1978 when he moved from California to Vancouver, British Columbia. Stelling served as the
companys president until May 2003, when he passed the presidency over to Jo Shearer.
Doug Stelling is now the
Chairman, CEO of Electra Gold. He has personally funded Electra Golds return
emergence as a publicly traded company.
Electra Gold Ltd. is primarily an industrial mineral producing company and has been
delivering mineral products for over one year to the cement industry. The company controls
a number of properties hosting numerous types of mineral products. Electra plans to
evaluate and if appropriate to develop its two properties containing kaolinite, one of
which host the geyserite and chalky geyserite deposits. The company holds a large claim
position in the vicinity of the Island Copper Mine and intends to investigate the
potential for copper and gold development on these claims.
Stelling, please tell us about your current vision for Electra Gold and how that is
developing for you.
Mr. Stelling: We were a precious metal mining company
up until the turn of the century. In the year 2000 we became very much involved in
the industrial mineral business. We see our company becoming a major contributor to the
industrial mineral market.
you tell us how the industrial mineral market differs from typical mining?
Mr. Stelling: There are quite a few differences between
traditional mining and the industrial mineral market. Traditionally, the industrial
mineral company produces material on a much longer term basis. There is much less coming
into production for a few years and then looking for a new mine. The markets are very
different. For example, we are now delivering material to Ash Grove Cement Company, which
is the largest independent cement company in North America. At the rate we are producing
now, we have reserves that could probably produce material for Ash Grove at the rate that
we are producing now for a thousand years or so. We are in a business that can be very
much more conducive to sustainability, which is something that investors are looking for
more and more these days.
you tell us about the properties you have and what you are producing?
Mr. Stelling: We have a large property on the north end
of Vancouver Island that we spent about three years putting together. It is an old gold
and copper mine producing much like the one in Old Cornwall England. It produces copper
and tin along with Kaolinite and other industrial minerals. We have a similar type
property on the north end of the island that is about forty kilometers long and just
adjacent to the Island Copper and Gold Mine, which produced from the sixties to the end of
the twentieth century. We have copper and gold molybdenum minerals scattered throughout
the property. We also have the alteration materials around the massive copper and gold
mineralization that gives the host of materials that we are now sending to Ash Grove
Cement and Lehigh, which is a division of Heidelberger out of Germany.
you tell us more about this process?
Mr. Stelling: We have a fellow working with us by the
name of Jo Shearer, who is the president of Electra, and became the president last year.
He is a specialist in industrial minerals and precious metals. Through the years he has
developed an interest in these other minerals, which are the industrial minerals and that
make up about 70% of the market in North America in mineral production. Gold and copper is
just a small part of the much bigger picture. The industrial minerals that we have
acquired, Joe has known about for decades and the time just seemed to be right in the late
1990s for us to begin to shift our focus on this more sustainable industry. That is a very
broad industry. We are not only looking at industrial minerals but also dolomite,
limestone and iron. We have an iron deposit we have put together in Alberta, which may
provide material for the cement industry in Alberta. One of the components for cement
besides the alumina silica is iron. We are concentrating on finding the markets for the
materials that we now have. We have been looking for limestone, dolomite and alumina
silica, which is a material we are now sending to the cement industry and Kaolinite, which
is a clay mineral used in the paper and paint industries. We have a huge paper industry
here in British Columbia that we think could be a market for our Kaolinite. We are
developing and working on all these things. We are in production now and have a long term
contract with Ash Grove Cement Company.
CEOCFOinterviews: When a
company like Ash Grove chooses you, is it because of price or quality?
Mr. Stelling: The quality of material is very
important. We are located on tidewater, which means we can deliver material cheaply to
further distances. To give you an example, we move material currently by truck from a mine
site to Port Hardy, which is about twenty miles. It would cost us the same as delivering
material by barge from Port Hardy to Seattle, which is probably about 350 miles. We can
move material by tidewater much cheaper because we are moving much larger quantities.
Location is very important, quality is important and relationships with the customers are
very important. That is something that Electra has been working on and Jo has been working
on for decades.
you tell us about your new product, high silica geyserite that you are delivering to
Mr. Stelling: Geyserite is essentially a silica
material that is also used in the cement industry for the SIO2 component. They were
looking for material low in alumina and high in silica. The material we have been
delivering to Ash Grove has been moderately high in alumina, running around 13% alumina.
The alumina comes from the Kaolinite from within the silica material. The chalky geyserite
is running about 25% Kaolinite and about 75% silica. Where as the material we were
delivering to Lehigh was running about 3-4% Kaolinite and over 90% silica. What is
important is that they do not get the sulphide and sodium, potassium and those types of
elements. They are looking for clean aluminum silica.
are you going to grow and what is going to be different in the next few years?
Mr. Stelling: The interesting thing we have discovered
is that we can deliver material to the L.A. area. I think British Columbia will be a
source of raw material, not only for Seattle and Vancouver but also the entire west coast
as far south as Los Angeles area. We think those will be large markets. We spend a lot of
time with the shipping companies. We are trying to get a feel for the markets from the
various websites. We think there is a very large market on the west coast and our market
may extend as far as the Pacific Rim and China included. It is a business that you cannot
go into without customers. You cannot develop a business and hope to find customers later;
you have to get the customers upfront. This makes it very different from copper or gold
and precious metals and base metals where the market is strong. The industrial mineral
business is market driven.
you tell us about the financial position of Electra today?
Mr. Stelling: We have developed this company by the
bootstraps. I funded the company privately. It is a public company but the company has
largely financed itself from the production of material that has been sold. We are doing
approximately two million dollars a year currently. We did half a million in the fourth
quarter of last year and we continue at the same rate through the year 2004. We are
expecting to expand and deliver materials on a regular basis and a more regular basis from
Lehigh and we are in conversation now with La Farge. We are producing cash flow at a
profit now, so that is how we are developing the company. We have approximately one
hundred thousand dollars in the treasury right now, which is not a lot, but a lot more
than what it was a year ago. The next financing may be the purchasing of a ship rather
than financing the ongoing operation because we are in production.
you explain efforts regarding the environment and your community?
Mr. Stelling: This is a very important thing to us. We
are a member of the Canadian Business for Social Responsibility. I spent some time with
Jim Rader who is the mining expert with Business for Social Responsibility in the States.
We are a contributing member to this organization in Canada. We consider it very important
and we have a very close relationship with the First Nations, which is a part of that.
Canadian Business for Social Responsibility recognized three bottom lines; the financial,
the community and the environment. We consider the last two, which many companies do not
see as equally important. The Quatsino First Nation signed a landmark agreement back in
August of last year. Patrick Tarley, who is an elder and council member of the Quatsino
First Nation, is on our board. Lana Eagle is a First Nation person who works for Quatsino
as an employee. She was the former executive assistant to George Gafney, who ran the
western operation for the Royal Bank of Canada. She is a very capable woman. We know the
other two bottom lines of environment and community as very important to business and
making financial profits. It seems that if you are doing good work in the community and
you have good relationships, and if you are not making a mess of the environment and you
are cognizant of the need to maintain the eco system, better profits come from that type
of an operation with less complications. We have had virtually no opposition about the
work we have been doing up in Port Hardy.
closing, why should potential investors be interested and what should they know that maybe
they do not realize when they look at the company?
Mr. Stelling: I think the sustainability is important
and the fact that we have been in business for a long time. We have signed a five-year
contract with Ash Grove Cement Company, which is the largest independent cement maker in North
America. We probably will sign more agreements with more large companies. We will be
producing for a long time on projects. I think we can ultimately do better and longer term
business at the lead of our best years in the gold business. Our best year may have been
1994 in the gold business when we did thirty cents a share in earnings and we feel we can
do better than that ultimately on a basis of decade after decade. It is sustainable; it
fits the needs of a changing political environment where people are looking for
sustainability rather than fast returns. I think this company is going to be strong.
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