Pediment readies itself for a major step forward
June 16, 2008
When I visited Pediment’s sites in Mexico in mid-February, I spoke at great length with Mel Herdrick, the Company’s VP Exploration, about production. It struck me then as a natural near-term development for Pediment, given what they had on their hands. As a producer, all future growth of the Company could be internally financed. The days of being at the mercy of the much flawed junior placement world would be over. Moreover, share price could begin to track, to some extent, the price of gold. Two weeks later, at the PDAC in Toronto, I had a similar conversation with Pediment’s President, Gary Freeman. He assured me then that he was open to this idea, and that he had already begun discussions to bring someone to the team with significant experience in production in the immediate geographic area.
You can imagine my reaction to the April 21st announcement of the appointment of Chester Millar to the Board of Directors. Chester Millar is the ‘father’ of heap leach gold production in North America. To me, this was a good move on the part of the Company. I should say that my only question on the matter related to his age. As one born in 1927, he was no spring chicken. I was assured that Mr. Millar was quite fit, and capable of making an active contribution to the Company.
Earlier today, I visited the Pediment booth at the Cambridge House conference in Vancouver, and began to chat with Alberto Orozco, one of the Company’s key geologists whom I’d met during my three days on site. My first question of him was, “Alberto, what can you tell me of the effects on the Company of the appointment of Chester Millar to the Board?” Alberto smiled at me, and shifted his body to the left, revealing a fellow standing quietly behind him, answering, “Kevin, have you met Chester Millar?” We all laughed as Mr. Millar extended his hand to meet mine.
“Chester,” I said, without missing a beat, “it’s great to meet you… so… what effect HAVE you had on the Company since being appointed to the Board?” All the while, I’m thinking to myself, ‘there’s just no way this fellow is over 80 years of age. 65, maybe… maybe, but 80? No way!’
This quiet fellow stepped out from the background, became animated with his hands, and declared, “I’ve changed the direction of their thinking.”
“How so?” I asked.
“Think production,” he answered.
With an emphatic, “Hah!” I protested with a laugh, “That’s what I told ‘em months ago,” as if to say, ‘why didn’t they listen to me?’ I guess that would be ‘cause I’m no Chester Millar.
We talked for perhaps 25 minutes about what needs to happen before Pediment could become a producer, and how long would it take. I was left with the distinct impression that Chester was being conservative in his estimates, but at the same time that this was not a man who dwelled long on formalities. In fact, he explicitly confirmed this to me. Find the gold, then mine it. Although Pediment’s NI 43-101 report was released this morning, showing 1.45 million ounces of gold in Baja California’s San Antonio District, I came away with the sense that such reports don’t mean a great deal to Chester Millar. These reports are for companies who need to go to the market for financing. When I asked how much new money would be needed to take this to production, the unhesitating answer was, “none!” With $20 million still in the bank, not a penny more in financing would be needed.
As for the path from here to there, nine months for permitting, and another six months for pre-production. He’s seen shorter make-ready periods, but is cognizant of the need to remove 20 or so metres (in some places) of overburden.
Discussions have already commenced with a contract miner on the subject of locating a good project manager. No dilly-dallying for this guy. He turned and waved a hand at the display sign in the booth and said, “I’d like to remove the word ‘exploration’ from the Company name.” Quick to add, “that’s not to say that we wouldn’t be actively exploring, because we will, but it won’t be the sole focus of the Company.” From this, and from earlier conversations with Gary Freeman, I won’t be surprised to see this Company split into two, if still under the one umbrella.
Chester Millar was standing during the entire conversation today, but I would observe that he tends to sit in a lot of Chairs. He served as Chairman of Glamis Limited from 1985 to 1998, Chairman of Eldorado Gold Corporation from 1992 to 1994, and Chairman of Alamos Gold Inc. from 1996 to 2003 and is currently also Chairman of Castle Gold Corp. Pediment is scheduled to have a Board meeting on Tuesday (June 17th). On the subject of not being surprised, I’m thinking there may be another Chair waiting for Mr. Millar.
For Pediment, the ball appears ready for a forward roll. Three months ago today, I predicted that Gary Freeman would soon be setting the scene for the next important stage in Pediment’s history. So let it be written… so let it be done.
Kevin Graham
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