Euro Sun Mining's (CPNFF) CEO Scott Moore Hosts Shareholders Update Conference (Transcript) - Seeking Alpha

Euro Sun Mining Inc. (OTCPK:CPNFF) Shareholders Update Conference Call November 2, 2017 11:00 AM ET

Executives

Stan Bharti - Chairman

Peter McCague - General Council

Scott Moore - President & CEO

Analysts

Justin Chan - Numis Securities

Vivek Jain - Private Investor

Ian Parkinson - JMP Securities

Operator

Good morning, ladies and gentlemen. Welcome to the Euro Sun Mining Corporate Shareholders Update for November 2, 2017. I would now like to turn the meeting over to Mr. Stan Bharti, Chairman and Mr. Scott Moore, President and CEO. Please go-ahead gentlemen.

Stan Bharti

Thank you, good morning, ladies and gentlemen and thank you for dialing into the update call on Euro Sun. My name is Stan Bharti. And before I start I would like to ask our General Council Peter McCague to read the statements.

Peter McCague

Thanks Stan. Yes, it’s a looking at the forward-looking statement disclaimer. During this call we will make statements that contains forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statement information will include but not limited to statements with respect to the perspective nature of the Rovina Valley projects and the potential of the property, proposed investment and development activities for the Rovina Valley mining projects and the likelihood of successful such activities the advancement of permitting and licensing activities related to the mining projects, and the future financial and operating circumstance of Euro Sun's assets.

Forward-looking information is subject to known and unknown risks uncertainties and other factors that may cause actual results to be materially different from the conclusions, forecast or projections expressed to imply that such forward-looking information. Certain material factors and assumptions have been applied and driving the conclusions or making forecast projections reflected in the forward-looking information. And description of these factors that could affect and the assumptions underlying forward-looking information can be found in Euro Suns annual information form financial statements and accompanying management discussion and analysis as well as public disclosure documents that are available for review under Euro Suns profile on CEDAR.

Participants should not place undue reliance on forward-looking information. Euro Sun does not take undertake to update any forward-looking information except in accordance with applicable securities laws.

Stan Bharti

Thank you, Peter, once more good morning ladies and gentlemen. Stan Bharti here, I'll just give you a quick overview. The purpose of this call today is to update everybody on the permitting process where we are with the ratification of the mining license and the technical work that’s ongoing.

With me in the room I have got Scott Moore, the CEO and Brad Humphrey who is the VP, Corporate Development and rest of their team who will -- I think most of the conversation will be with Scott and Brad but the team is available to answer questions.

So, at a high level to remind everybody what Euro Sun is, the symbol is ESM we trade on the Toronto Stock Exchange. We have about 58 million shares outstanding. As of the yesterday we closed at $1.60 Canadian a share which implies the market capital of about $90 million. Our one-year high low is $0.62 and the high was $2.02.

The main asset is in Romania we acquired this asset about a year ago, when Carpathian sold off his Brazilian assets, we took control Carpathian changed name to Euro Sun we have rolled the stock back, the main asset that we like which is Euro Sun second largest gold project is the Rovina Valley project which is in the [indiscernible] belt, which includes one of the largest gold copper belts in the world includes Marron tower the largest gold mine in the world by the way. So, we are right in the heart of that belt.

A lot of work was done on this asset by Carpathian over the years. there is a PEM there and we are not preceding to a full visibility which will be done by [SR Tiana Sanco]. The asset has 10.8 million equipment gold ounces out of which 7.2 million is gold and 1.4 billion pounds of copper. It’s a world class asset, has been recognized as such by everybody and I think over the last year we made significant progress.

We also did a second round of financing recently of about $10 million out of which 8.5 million were non-brokered and the rest was brokered. The financing was under the $1.40 a share.

So, with that I'm going to pass it on to Scott Moore to give an update on the mining license and the [indiscernible] update.

Scott Moore

Thank you, Stan. This is Scott Moore, President and CEO of the company. To just give you a quick update as we released early this week the permit process as described in our press release of August 3rd where we are notified by the National Agency for Mineral Resources in Romania, that had anticipated starting the ratifying process shortly after that press release of August 3, its actually started as of now so that press release that you saw earlier this week has been the official notice that the ratification and posting notice has actually occurred.

And I'll give you a little bit of background on that, so everybody understands what's has happened in the last let's say 60 days. Certainly the agency had notified us that we were going to be starting this process with a position notice shortly after the August 3rd press release, as many governments will tell or I'd tell you we're not privy to how the process what's going but it turns out that the President of the [Indiscernible] was removed shortly after the August 3rd press release we've had two Presidents of members since then and subsequent a new President the top profile on his desk has been the Rovina Valley project and the posting notice has gone up.

So, the support level within the agency has been extremely strong and the processing notice and all the disclosure documents related to the project have been put on the website.

The transparency meeting that occurred in July one of the takeaways from that was many people wanted to see documentation related to the project such as closure plans, EIAs engineering studies which under Romanian law is what's called secret documents and not available for the public, although the agency made a decision recently to allow those documents to be posted. We were requested to get them declassified by the Secret Service which we recently completed and those documents have been delivered to agency and are now being posted on the website.

So, the government is moving to a much more transparent manner, and if everybody wants to visit the website it's www.namr.ro for example I had a meeting with the President of the National Agency last week and that meeting was actually posted on the governments website. So, two natural gas projects are also have been posted recently in conjunction with what the Rovina Valley project was. So, our government is being much more transparent in applying the law so everybody can have a commentary period of 10 days when these large projects move ahead. So, we are very pleased with the support of the government. They are moving along in a very positive manner and getting those licenses ratified and moving forward to have a completed in the very near future.

So again, we are very pleased that the government has the new President of the agency Mr. [Indiscernible] has supported the project fully since he took office in early October and we are moving forward ratification of this license and moving forward on our engineering studies.

So, a quick update on that again we announced that we've started the feasibility level met test work that’s being conducted by [Aries] in Pennsylvania. We hope to have data available within the next 60 days and hope we are able to put pressure itself and in turn replicate deal that we August which was phenomenal at a feasibility level.

So, we're moving ahead on all the engineering biodiversity studies continue internally within Romania, so we're very pleased that on the technical side things are moving forward strongly and on the permitting side, a clear path to permitting has been re-indicated to us by the government and we're very pleased to that continuing to happen and will happen very shortly.

I don’t really have anything to else to add at this point again, we're getting full support from the government including these agents and I will turn it back to Scott Moore.

Stan Bharti

Well thank you, so just to summarize the ratification process moving well and the Romanian government has now made it transparent. all the information is on the websites, we have the hearing with the community and there way no negative comments at the hearing and no it’s a question of just working through the bureaucratic progress, we hope to get everything finalized before the end of this year or early next year and this Christmas in between and then simultaneously we have now had the money, we're going to go ahead and start the feasibility study and there is a very good data available on this project.

The last point I also want to mention is that we have now, we’re also looking at some good exploration potential in the area and because we know the belt is very big, the geological team we have been working on this project for over 10 years so they know the asset really well and so we're looking at other opportunities to further expand the exploration potential of this area on top of the asset that we have.

So, with that I know it’s a short summary but we will pass it on opened up for questions. Operator.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Your first question comes from the line of Justin Chan from Numis Securities. Please go ahead.

Justin Chan

So, I guess my first question is, can you just give us a quick update on, I believe the process is that the document must be signed by number of relevant ministers and that’s the next step in the process and then the other permit that outstanding is the urbanization license, could you just give us quick summary on where those stand and what is your expected timeline there.

Stan Bharti

As put on freshly, following the 10-day commentary period, which begin on October 30, the government has been in a position to send the license and the supporting documentation first to the Secretary General of Parliament's office for first signature and then on to the Ministry of Economy is the first Minister to sign off followed by Environment Justice and Finance. And finally, to the Prime Minister for him to sign the same document and then it would be published in the official gazette. So that’s the process that it goes to in Romania. as our discussion is on the urbanization, certificate, that will begin once my license has been ratified. Under Romania law you cannot start that urbanization or rezoning of the particular land around the project until you've a ratified mining license.

Justin Chan

And just on the Ministers involved are they own same party; do they generally act in concert or…

Stan Bharti

Well if you followed Romania this year, there's been some changes , they have had three Presidents of the National Agency and two Ministers everyone that had to be signed has been changed, at least twice this year, but I believe it means that were in a period of stability within the government, at least all indications are that the ministry that have to sign the license, there's no potential for change at least that's been publicly communicated within Romania, so we shouldn't have any issues with having those particular ministers change off, the current Prime Minister was the Minister of Economy and when they changed the last Prime Minister, he had changed his position, and again in Romania that documentation -- it’s a single document that floats around -- everybody has to sign off personally at the ministerial level and if you do change one minister you have to again start the process again, so we're cognizant that everybody is in the right seat at the right team and to move forward as quickly as possible to get all the signatures done.

Justin Chan

And just a quick internet searches it appears it's a coalition government, but I guess generally the parties have similar polices…

Stan Bharti

Yes, yes, so right now in Romania it's effectively a majority government, with the Social Democrats, PSD Party with a small percentage of -- it's called sister party called [Aldi], that control the Parliament, an example the Minister of Environment is from Aldi but most of the other ministers are all from PSD, so they have a majority government, so they're for five years, so everybody should be in place throughout this whole permitting process with the majority government, even though it is a very small coalition.

Justin Chan

And just on the 10-day common period, I suppose if there're comments, is there scope to alter the document or I'm just trying to understand how comments are incorporated?

Stan Bharti

There's not actually, so the process is people will put comments into the agency, for their review but you cannot change any portion of the project as it is so it's just for basically just for commentary only but nothing to be changed document wise as this thing move forward, so there'll not be a public hearing again, you had the one public hearing, this is just a written submission in case someone has any questions, but as far as changing or altering any further documentation that will not happen, that's not required and not allowed under law.

Justin Chan

And just on the scope of the project that's contained within the permits, are you satisfied that the scope of what's included is ultimately the scope of the project you intend to proceed with or is there any flexibility to make certain changes later on…

Stan Bharti

As far as what we've in submitting the mining license, the project it was starting off right now was almost I would say pretty much a mirror of what that project is, with the exception of -- we're probably going to exploit only first [Coalnick] as opposed to Rovina and Coalnick at the same time. But again, up to 23,000 tons of it already permitted, and that’s the scope of what we're looking at in the project. And dry stack, no [cyanides] all the major parameters technically around the project will be adhered to within the mining license.

Operator

[Operator Instructions] Your next question comes from Private Investor, Vivek Jain. Please go ahead.

Vivek Jain

I just had a quick question on the financing that you guys recently completed. Are you able to disclose any of the participants [indiscernible]?

Stan Bharti

No at this time we are not unfortunately.

Scott Moore

It was all funds you would know, all gold funds you would know on the street. Good names long term holders.

Stan Bharti

Unfortunately, we asked -- and one major fund took a very significant portion of that financing and they have not filed any report or reported -- noticed that they have their position but we will leave at that point right now. But we are very happy with the [indiscernible] base that we picked up on the financing.

Scott Moore

We also participated directly in the financing just you know.

Vivek Jain

And I guess one other question with the -- in the news release you just released, it mentioned that you are going to meet -- you had meeting set up with each of the Ministers. Do you anticipate a signature doing those meanings or are these preliminary get them up to speed as hopefully they sanction thereafter?

Stan Bharti

Yes, maybe only if there is a substantive document that accompanies the mining license in Romania like goes around to the all ministers as the license proceeds through ratification of signatory, this is basically for us put a name to a face with a new Minister, socialize the project, answer any questions that may have in advance so that fall hitting their desk.

Vivek Jain

So, I think you might have briefly touched on this earlier and I might have missed this, but the timeline what do you expect all of these Ministers to sign up and then have the President sign off, did you say before Christmas time, did I hear that right?

Stan Bharti

In theory that’s certainly possible it maybe a little bit past that, most government shut down for a month that Christmas year and Romania is no different. So, we have a posting period that we have to adhere to before those documents can move on. So, the likelihood of being done by Christmas possible but more likely be sometime in January.

Operator

Our next question comes from the line of Ian Parkinson from JMP Securities. Please go ahead.

Ian Parkinson

Just a question for -- in parallel to this stuff that’s going on how are things on the ground? I guess with respect to power or something like water supply, local contractors, are they constructively talking to the team on a go forward basis or is everybody sort of waiting to see what happens with them before those conversations really kick off?

Stan Bharti

We have been pursuing mainly on the items that we are allowed to conduct with by diversity and elements of the potential EIA as of course we can start to EIA until we have a ratified license. So, we are doing a work that we can do, under the current circumstances but as far as getting into full-blown discussions out on water power we have on the engineering side full on as yet we are starting specifically with the metallurgy and we will then follow on once we have the license ratified.

Scott Moore

These discussions are extremely good, that buy payrolls…

Stan Bharti

They are primarily going through right now like budgets on Geotech and combination drilling and identifying locations for pad and plant and everything else, so we look at Geotech, so we can steepen up put wells so all those documentations are actually going within internally through our company before we go out to external bids. So that kind of work is ongoing.

Ian Parkinson

Okay, I heard Stan mentioned earlier that in exploration your view to other land packages etcetera you are doing some additional work. And I'm summarizing or hearing from other sources that there is other people doing same sort of not land grab but looking for exploration. Do you think members looking at Rubina Valley as a case study or as a template to go forward or is this an example of the direction that things are going to go with them moreover streamlined organized process?

Stan Bharti

Certainly, they have a brand-new draft money [Indiscernible] on the table is certainly into Parliament that is again focused on a more streamlined process than what's been happened in the past on a more transparent process, so in corporate what they've been doing now. As far as our exploration permit on [Seneja] we have submitted our one-year program and internally we are having discussions on what the next step is for year two.

Scott Moore

Okay, operator I think that's all of the questions that we have for today. So, we want to thank you for everyone for attending the call and there will be a replay available if anybody has missed the call and certainly look forward to good things happening within the company this quarter. With that we will end the call. Thank you.

Operator

This concludes conference call. You may now disconnect.

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