17.02.09 El Niño Ventures : Jean Luc Roy(*) Speaks to Proactiveinvestors

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Jean Luc, thank you very much for joining us for this interview.

It’s
a pleasure to be with you and it’s a pleasure to give
Proactiveinvestors a chance to hear from us and to get to know us
better.

How come El Niño Ventures has such an
unusual spread of project locations with projects in Canada, Ireland
and the Democratic Republic of Congo?

Well, to be
honest with you I think the projects in Canada and Ireland have   to be
downplayed. The focus of this company is definitely in the Democratic
Republic of Congo, the DRC. When I first joined as President we have a
project in New Brunswick, Canada looking for zinc with Xstrata Zinc.
That project has ended. We have a 50% ownership in the exploration
ground but we have no work planned in the future on these properties.
We are looking with Xstrata on how to move these properties forward,
probably with a new partner.

In Ireland, we  reduced our planned
drilling  because of the downturn in zinc and the downturn of the zinc
industry in Ireland and the company has   to establish what it is going
to do moving forward but we have no plans to spend expenditures in
exploration over the next year in Ireland.

So to put it bluntly,
the focus is definitely on the Democratic Republic of Congo where we
have just identified the potential for a mineable ore body with our
Kasala project. We have just put out our latest drill results where we
have several zones of true thickness of 70-90 metres grading well over
1% copper. We have intercepts of 30 metres at 2%, 22 metres at 3.28%, 7
metres at 7% and 10 metres over 6%, so those are ore type grades. Our
strike point is about 800 metres by 250 metres. We have done a complete
IP ground survey after the drilling and we have identified an extension
to the southeast and a probable extension to the northwest. So the
focus of this company is definitely going to be in the DRC.

So that was the Kasala Copper project that you were speaking about. Could you tell us a bit more about that?

The
Kasala project has been identified in one of the original research
permits that we’ve picked up. We drilled a discovery hole and a couple
of months ago we reported that and we’ve just put out our latest
results. The Kasala project is held by us with a 70% interest and that
is very important for investors to understand. A lot of companies
operating in DRC have an interest far less than 70%. On top of that we
have got an option to earn into 90% at terms to be negotiated. The
structure of the deal makes a lot of sense to a lot of investors and
the results that we’ve just published basically confirm that we have a
true project to work with over the next couple of years.

Would you tell us a bit about El Niño’s other projects in the DRC?

El
Niño holds a very prospective land position. We hold about 450 square
kilometres. It is not the largest land position of any company but we
believe it is very prospective. If you look at our latest news releases
you will see that we’ve just finalised an agreement with Phoenix Mining
on a research permit that is located between two world renowned ore
deposits being the Ruashi Mine held by Metorex and the Luiswishi Mine
held by Gecamines of Congo. Both of these deposits are within 1 or 2
kilometres of our land that we have picked up and with several
additional workings already on our   property we strongly believe that
this has the potential to be developed in the same way that we have
developed the Kasala project. We also have other land positions near
Kinsevere, the largest project of Anvil Mining. Our land is actually
adjacent to that project and we hope to move those forward. We have to
take into consideration that the markets are very difficult right now
so we will probably focus mainly on the Kasala project in the next year.

One
other thing that I’d like to point out is that we are not under review.
The DRC is now conducting a mining review for mining contracts for
companies that have contracts with state owned companies. We are not in
a contract situation and we are not under review. Another thing that is
worth mentioning to all the investors is that the copper belt of Congo
is in southern Congo and it is totally unaffected by the problems to
the east. Congo is a very large country with very little infrastructure
and throughout the problems that have occurred in the Congo over the
last 10 years, the Katanga region where the copper belt is has never
been affected and the work in the mining industry has never slowed
because of these problems.

Can you tell us a bit more about El Niño’s projects in Canada?

As
I said earlier, we do have a land position in New Brunswick which we
are holding with Xstrata Zinc, we are in a joint venture with them. The
results were not as anticipated and for the moment there is no plan to
spend any money on exploration on that property. We are actually
looking to find another partner to take it on and we will then assess
whether to dispose of this property or to keep a small interest.

Is there anything more you can tell us about El Niño’s exploration projects in Ireland?
In
Ireland we have picked up 13 prospective licences a year and a half
ago. We have done some drilling with very limited results. Again when
we picked up these properties zinc and lead were at an all time high,
since then the markets have totally destroyed the zinc and lead market.
So for now we do not anticipate having more exploration work in Ireland
in the next year but we will keep these properties because they are
strategically placed in Ireland and we believe that when the markets
turn this could be a good venture for our company.

What is El Niño’s financial situation?

Right
now our cash position is about $1.3 million.   We can weather the storm
of these markets. We would like to raise some money this year and do
some drilling on the Kasala project and this will all be contingent on
us raising about $2 million. We strongly believe that copper will
rebound and these markets cannot stay where they are forever and we
made sure that our cash position was strong enough for us to get
through these difficult times.

What can we expect from El Niño Ventures over the next 12-18 months?

To
discuss the next 12-18 months one has to be very realistic and look at
the markets. Short term basis we would be looking at raising about $2
million this year to do 7,500 metres of diamond drilling on the Kasala
project. We have already identified a major extension to the southeast
of the Kasala main zone so the focus would definitely be to expand the
Kasala project and ensure that at the end of this year we can actually
put a bona fide resource calculation on this project. Again, this will
all be contingent on us being able to raise money at a price that
protects our shareholders and ensures that the Kasala project can move
ahead.

What experience do you and the El Niño team have of developing projects in the Democratic Republic of Congo?

I
sincerely believe that our management team is probably one of the
strongest to operate in the Democratic Republic of Congo. I was
personally Managing Director for First Quantum Minerals from 2000 to
2006 living and working in the Congo. My country manager has over 20
years in the Congo. We know how to operate in the Congo. We have very
good relations with the authorities in the Congo and we look forward to
making a success of El Niño’s Ventures in the DRC.

Could you give us your thoughts please on the prospects for the Zambian Congo copper belt?

Basically
the copper belt runs through Zambia and Congo. It has a length of about
350 kilometres by about 60 kilometres wide and it holds probably 20-25%
of the known copper reserves in the world. There is a huge potential
for new findings in both Zambia and Congo for the reason that both
Congo and Zambia were monopolies run by state owned companies right up
to the year 2000 or so. So what you had was a state owned company in
Zambia and a state owned company in Congo and they had exclusive rights
to the copper in both countries. The copper belt has now been opened to
international companies and I strongly believe that the potential to
find huge ore bodies in both countries over the next 10 years is
something that is real and I think in the next 10 years we will find
discoveries in both countries that will rival the best mine ever
developed in the copper industry.

What are
your thoughts on the mining review in the DRC and has this process or
its outcomes affected El Niño Ventures and is it likely to?

Well
as you know there is a mining review under way in the Congo to review
certain mining contracts that people have signed with state owned
companies. This review process has dragged on a long time and has had a
negative effect for the people being under review. As a backlash, El
Niño was affected because people had a hard time understanding that we
are not under review. The reason we are not under review is that we do
not have contract with state owned companies. We have heard that this
review process should be concluded in the very near future and
hopefully this will recreate faith and confidence for investors looking
to invest in the Congo. While it has been a difficult time it has not
impacted our operations but it has impacted how people feel about
investing in the Congo.

How does El Niño Ventures engage with local stake holders in the Congo?

Our
local stake holders, when we set out to acquire properties in the Congo
we approached people we knew we could do business with. A lot of the
properties are held in Congolese hands in the Congo. We first of all
identified the properties we wanted and then we worked with our local
partners to strike a deal that made sense to them and makes sense to
us. Our local partners are very silent, they are not very active. We
co-ordinate with them three to four times a year and they understand
and they know what we do. I personally visit Congo two to three times a
year and have meetings with them every time I go there. We at El Niño
try respect the Congolese mentality but also we have to function in an
environment that protects and builds value to our shareholders.

Tell us about how governance works in the Congo?

How
does governance work in the Congo? Well that’s a very good question. I
think it is a work in progress. Every year that I have been associated
with the Congo which started in the year 2000 conditions improve in the
Congo. The new mining code came into play in 2003. It took a while for
it to be implemented correctly but I think that with all the
international interest in the Congo I think that the governance of
Congo slowly but surely is moving towards a goal of being transparent
and giving an environment where investors feel comfortable operating
in.

What can you tell us about the fiscal regime in the DRC?

The
fiscal regime in the DRC is spelled out in the new mining code that was
put forward in 2003. The new mining code was developed by the World
Bank so the fiscal regime that you have in the Congo is competitive
with other countries in that area. Taxes are around 30%. We do get
breaks when we import equipment and it is a competitive mining code
which means that the fiscal regime is competitive and gives an operator
the opportunity to operate and have success in the Congo.

What are your thoughts on the prospects for copper and base metals?

I
think the prospects for base metals over the next few years are yet to
be determined. I think we have hit the low positions, obviously 2008
was a very difficult year, but I think the fundamentals still remain
very strong. The inventories of metals is still low compared to what
you had in the late nineties early 2000 and I think the fundamentals of
development around the world have not changed. I think it has slowed
but that we are facing a slow recovery, probably some time this year.
We will be at the beginning of a new cycle, maybe not as exciting or
fast growing as the last cycle but I think because of the growth around
the world, base metals are here to stay and I think that prices will
still be very good for anybody wanting to develop mines in the base
metal industry.

Thank you for joining us for this interview.