RE: Interview with GREG JOHNSON CEO. NKL good stuff...
PIN: What needs to be done at Shakespeare in order to go ahead with this plan?
GJ: The project operated from 2008 to 2012. It was shut down because of low metal prices, particularly low nickel prices in early 2012. We are going in — our chief operating officer, John Sagman, spent 20 years of his career working for Xstrata (LSE:XTA) and Vale (NYSE:VALE) in the Sudbury District. We’re negotiating a new processing agreement with the Tooele smelter and are also looking at some alternative transportation routes that could significantly reduce our operating costs. Our objective is to reduce the costs so that we can get the project to be cash-flow positive at today’s relatively modest prices for nickel, copper and the PGMs. We want to position it so that it’s generating cash flow and could fund Wellgreen because we think there’s opportunity that those metal prices could move significantly higher.
PIN: Do you have a timeline for the restart of the Shakespeare project? Or is that just really up to the prices?
GJ: At this point, we’re doing our studies. Over the next couple of months we’ll be understanding whether or not we’re going be able to reduce costs significantly enough to go forward at current prices. We’re hopeful over the next couple of months to know whether or not we’ve got a project that we can restart now or, if not now, at what metal prices we could turn that on.
We’re quite optimistic and right now it looks like this could be a positive cash-flow generator based on the current level of study; hopefully we will see that continue with our current studies. I think if we could demonstrate that the company’s got its own support cash flow wise and operating wise, that would really allow us to stand out from the marketplace.