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A proven management team and an experienced board of
directors add value to Southern Rio Resources Ltd.’s search for precious metals
Basic Materials
Minerals Exploration
(SNZ-TSXV)
Southern Rio Resources Ltd.
Suite 1410, 650 West Georgia Street
P.O. Box 11584
Vancouver B.C. V6B 4N8
Phone: 604-687-3959
Lindsay R. Bottomer
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
February 10, 2004
BIO:
Lindsay R. Bottomer, M.Sc. (App). P.Geo
Position: President & CEO
Over 30 years in mineral exploration and development, the last 14 years based in
Vancouver. Former Director of Canadian Exploration with Echo Bay Mines Ltd, and VP New
Projects with Prime Equities International (Pezim Group). Past President (1998-2000) of
the BC & Yukon Chamber of Mines. Mr. Bottomer currently serves as a director of
several public listed companies including Entrée Gold and Pacific North West Capital.
Company Profile:
Southern Rio Resources Ltd. is a mineral exploration company listed on the TSX
Venture exchange (trading symbol: SNZ) and focused on the search for precious and base
metal deposits in Canada.
The Company owns or has the option to earn a 90-100% interest in six projects in Canada,
and is well positioned to take advantage of the sustained upward trend in the price of
gold and silver, as well as the recent rise in the price of copper.
Southern Rio's primary focus is it's rapidly advancing 3Ts epithermal Gold-Silver Project
in Central British Columbia where aggressive recent programs of drilling have
systematically developed the project by expanding several known veins and identifying
multiple new high-grade zones.
CEOCFOinterviews: Mr. Bottomer, will you tell us about your
background with Southern Rio?
Mr. Bottomer: "I have been with Southern Rio for about
three years. I am a professional geologist and I come from a technical background.
Three-and-a-half years ago I was talking with some of the people involved in Southern Rio
at the time and they were having a change of direction and were looking for a new
president and CEO. It happened to coincide with my situation, so I came in as president.
The company at the time had been working in South America through most of the previous
decades. That era was coming to an end and I was looking to move on. Both my viewpoint and
most of the directors was that with the improvement with the situations in Canada, and
possibly changes in the tax regulations, it was time to get back into the Canadian scene,
so we did. We have always put a focus on precious metals because after discussing it three
years ago, we felt the fundamentals for gold were quite positive. We looked to get into
gold in Canada specifically. We picked up a number of properties at that time on the
cheap, because gold was at a favor and Canada was at a favor. That served us well. In
western Canada, we have a property in Ontario, but our focus has been western Canada and
precious metals."
CEOCFOinterviews: What
do you look for in a property?
Mr. Bottomer: "Firstly, the commodity. The main focus is
gold but also the base metals, particularly copper often come with the gold and in the
same geological terrain. Precious metals and copper are our focus. The second thing that
we look at is low cost exploration, and what that means is reasonable access, preferably
road access. Even though there is some spectacular scenery in B.C., which can be accessed
by helicopter, on exploring, I would much rather have access by road. We look for a good
road access particularly in British Columbia that is largely provided by the Network of
Forestry Roads, which has been put in as part of the forestry infrastructure. Much of the
province is accessible for four-wheel-drive vehicles and accessible by road and for a host
of reasons particularly cost of operations, safety and if you get to the development
stage. All of the properties that they have at the moment are road accessible and that is
one of their criteria. We are focused in Canada because of the favorable geology and the
favorable tax regime at the flow through shares. We look at properties elsewhere. We call
ourselves a North American precious metals group and we have looked at properties in the
United States and Mexico. At the moment, we don’t any there but certainly the
geological terrain is similar and we have not come across the right property yet."
CEOCFOinterviews: Are
you constantly looking?
Mr. Bottomer: "Almost constantly! The exploration game
is testing itself out and the more exploration we do, some fall by the wayside. Even
though I believe the properties that we have at the moment are very good properties, as we
advance them, some will advance and some won’t. The acid test is always drilling; if
you do your drilling and you don’t get good results, you have to step back and take a
look that maybe there is still room for exploration on the property or maybe it is time to
move on and get another property. When a new property opportunity comes in, we are
assessing and evaluating it against the merits of the properties we have on the books.
Sometimes the more information we get on the ones on the books, they go down in priority
listing and some of the possible acquisition opportunities go up in priority."
CEOCFOinterviews: Will
you tell us about some of the properties that you are focusing on now?
Mr. Bottomer: "The main project we have, which are three
contiguously joining properties, are called 3Ts properties in Central B.C. We have road
access and are about 160 kilometers from the town of Vanderhoof, which is a lumber town in
central B.C. It is a style of gold deposit, which is quite common through the Cordillera;
it is called an epithermal gold deposit; these are vein deposits, which form close to the
earth’s surface and usually are associated with volcanic activity. It is a well-known
geological style of mineralization. Some of the best precious metal mines in the world are
of this style; the El Pinion Mine, in Chile for example is the Meridian Gold Inc., (MDG),
the Midas mine in Nevada, and some of the mines in the Pacific Rim in Japan and Russia.
The attraction, although the tonnage may be relatively small, the grades can often be
quite spectacular in both gold and silver. For a junior company, this is quite important.
We are in the business of finding high-grade mines and deposits. This style of deposit is
an attractive style and that is largely what we are focused on. We are now on our third
drilling campaign, on a series of gold and silver veins. We have established some
resources; about 170 thousand ounces of gold. That is probably about half of what you need
for a potential mining operation in this area. We haven’t done mining studies yet,
but that is the basic rule of thumb. We figure if you add four or five hundred thousand
ounces in this locality, it could be the basis of a mining operation. What we are
exploring for is to add to the resource base we currently have, both by extending the
known deposits and finding new gold and silver."
CEOCFOinterviews: Do you
plan to own the projects you work 100%?
Mr. Bottomer: "We own them or we have an option to own a
100% interest. In the 3Ts project, there are three properties or agreements that make of
the project and one of them we own 100%; the other two we have options to earn 100%
interest by exploration expenditures. In both cases, we are quite close to earning 100%
interest."
CEOCFOinterviews: Why is
that the way you like it to be?
Mr. Bottomer: "When you get to 100% from having a
minority or a fifty or sixty percent interest; it gives you many more options both in the
potential development scenario, bringing in a partner or an advanced exploration
situation. If you have 100% of the deal, it is a much bigger piece of the pie to carve up
and bring in another company, particularly if we are at the advanced exploration stage. At
that stage we would look around for a medium mining group to come in and carry some of the
load. It is much easier to do a deal with these groups if you have 100% to start off with,
than if you are only starting off with 60%."
CEOCFOinterviews: How
are you funding all of the activity?
Mr. Bottomer: "Most of our funding is through financing
on the TSXV venture exchange. We are doing financing to raise about a million dollars,
which will be sufficient for our exploration programs for most of next year. We finance on
the basis of having positive results. We have to sell ourselves to the investment
community on the basis of our projects and running a good low-cost exploration outfit. We
think we do a good job there and that is one of our strong points. We know B.C. and Canada
well. That is most of where our financing comes from. One property, we had a joint venture
to an outside party and that party is funding the exploration work."
CEOCFOinterviews: Is it
easier with the current price of gold being up?
Mr. Bottomer: "It certainly helps. It has helped in the
public perception; most of the public is aware that gold is on a long-term up-trend. When
we say we are exploring for gold, we don’t have to justify as much as what we had to
in the past when gold prices were down. Now with the commodities upswing, it is easier to
make the case for doing exploration. As time goes on, the existing gold mines are running
out of reserves, so it is the replenishing aspect and people are aware that the world is
using more commodities and there is a need for more resource development and discoveries.
With the price of gold and the increase in base metal prices, so the current price of gold
certainly has helped."
CEOCFOinterviews: How
much stock is owned by the officers and what is available for people that are interested?
Mr. Bottomer: "At the moment we have issued
capitalization, it is about 48 million shares and we are doing a financing, which will
increase that. At the amount of stock that is out there at the moment, insiders hold
roughly twenty percent, which is a significant chunk, but not a controlled position. The
insiders including myself are actively involved in the management of the company. Our
board of directors are all shareholders and experienced mine people. I use them a lot and
rely on their opinions. They support the company and they are a very important part of the
exploration process."
CEOCFOinterviews: Do you
do much to attract potential investors?
Mr. Bottomer: "It is an ongoing program. If you have the
best technical story in the world but don’t get the message out, it doesn’t do
you much good. We are always on the look-out for opportunities to tell people our story.
We tend to focus on some of the industry oriented workshops and conferences and we are
mainly focused on Canadian audiences because our properties are in Canada and we are not
registered to sell stock in the states without much restriction. We focus on the Canadian
audience through investment conferences and technical conferences in Canada, as well as
opportunities like this to get our story out to a wider audience."
CEOCFOinterviews: What
should potential investors expect for the next two or three years?
Mr. Bottomer: "That depends on success and you have to
be an optimist to be in this business but we are I believe about at a third to a half of
the resources which possibly could be the basis of a mining operation in the 3Ts project.
We have to continue to have exploration success and if we do, we could be in the position
in a few years of having a potential mine there. We are looking at outside properties;
fundamentally every drill program we do, we are looking to add to our knowledge base and
increase positively on the technical side. What the investors should be looking for is
that we are actively looking to advance properties and drilling. Our main focus is the 3Ts
property and we hope to be in a position to be increasing resources there with each drill
program and we have a drill program ongoing as we speak. What I would be looking for is if
I was an investor is that each program adds to the base and adds something positive to the
knowledge of the property or the resources."
CEOCFOinterviews: I know
you touched on this before, but in closing, can you give us some further detail on why
your focus in on Canada?
Mr. Bottomer: "Many people in the industry, including
myself, have operated worldwide through the nineties when the industry opened up so much.
We are aware of the risk/reward rate ratio in many parts of the world and certainly
operating in Canada, the risk aspect is quite low; both the political and physical risk is
low. That makes it a very good place to explore and that is a large part why we focus on
North America and Canada. We know what the ground rules are and how to deal with the
authorities and we know what the regulations and the system is all about. When you have
worked in a lot of places around the world where certain risks exist, it is very nice to
be coming back to a place and a system where you know what the rules are. We have been
elsewhere and we like being here in North America."
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