Colt Resources Inc. is a Canadian junior exploration company engaged in acquiring, exploring, and developing mineral properties with an emphasis on gold and tungsten. It is currently focused on advanced stage exploration projects in Portugal, where it is the largest leaseholder of mineral concessions.
Opportunist: Please share your background with us Nikolas.
Nikolas: I was born in Rwanda to French Canadian parents from Québec, whom I followed all over the world—my dad was a Stanford Ph.D. who did lots of work in Third World countries. During childhood I was exposed to several cultures and lived in different parts of Africa, including the Democratic Republic of Congo, Nigeria and the Ivory Coast. We also lived in California for about four years when I was a kid.
I spent the first 16 years of my career with large investment dealers in Canada, including National Bank, Merrill-Lynch, CIBC and Scotia Capital. In 2007, after having successfully helped fund or assist in funding several resource companies and seeing the benefits that my clients enjoyed, I decided to make a career change.
Opportunist: How did Colt Resources come about?
Nikolas: It was a shell company by the same name that got relisted in the spring of 2007. We liked the name and so we decided to stick with it. From humble origins, the company has grown to become the largest holder of mining claims in Portugal. Our market cap is currently just under $60 million.
Opportunist: What is your role in the company?
Nikolas: As part of the funding process during the past four years, I have traveled all over the world making presentations and developing a base of contacts and an extensive network.
Opportunist: How many languages do you speak?
Nikolas: Only two, French and English, but I am trying to learn Portuguese.
Opportunist: What is Colt’s mission?
Nikolas: Essentially our mission is to seek advanced stage projects in safe jurisdictions. That’s the key. Our focus will most likely remain in Portugal, where we are the largest holder of mineral claims in the country. It’s our intention to advance these projects toward production over the next 18 months.
Opportunist: Tell us about Colt’s projects.
Nikolas: We are currently developing a high-grade tungsten deposit about 5 hours from Lisbon. It’s one of the highest rated tungsten supplies in Europe. We also have a high-grade gold deposit an hour from Lisbon.
Opportunist: Is Portugal a favorable place to work?
Nikolas: Yes, we feel very welcome here and by the Portuguese government as well. Portugal is a great country; it has had the same borders for 600 years. The infrastructure is wonderful. We have all the things you need to do mining, such as paved road access to all of our projects, electricity and access to water. We are blessed that we didn’t have to build roads or bring in power grids.
The Portuguese people are well educated and talented, and there are a number of great universities here. We have decided to sponsor a Ph.D. student who is doing a thesis on our gold project.
Opportunist: What is special about tungsten?
Nikolas: Tungsten is the strongest of all metals in the world. Tungsten carbide, because of its hardness, is used for airplane turbine blades, high-speed cutting tools and mining equipment. Due to its high melting point, tungsten is a very special metal and cannot be substituted. For that reason, tungsten users around the world must use tungsten. No other metal can be used in its place. Military applications date back to World War II.
Opportunist: Where is tungsten found?
Nikolas: More than 70% of the world’s tungsten reserves and production are in China. However, since 2000, China has severely restricted export quotas. These restrictions have increased in the last two years to a point where a lot of their mines no longer meet productions standards and have closed down. They also banned new mine applications last June and they have extended this ban further into next year. Foreign companies have also been prohibited from mining in China.
Opportunist: Why is that?
Nikolas: China has put a series of policies in place to conserve its tungsten sources. Tungsten is a strategic metal and is in short supply outside China. They used to export raw tungsten and import finished goods but with rapid changes in industrialization they now manufacture all these things in China. Their industry needs the tungsten to make the finished goods.
Opportunist: What about the United States?
Nikolas: The United States has been basically feeding off one of the world’s largest stockpiles, depleting it at a rate of probably 3,000 tons a year. Last year that stockpile was 17,000 tons. There are only about six years of stockpiles left, and there is no more tungsten mining in the United States.
Opportunist: What is the global market outlook for tungsten?
Nikolas: Our Tabuaco tungsten project is likely to come on stream at a time when prices are being impacted due to decreased production in China. We are now experiencing all time highs in the metal’s price.
The Raw Materials Initiative in Europe positions tungsten as a strategic metal in Europe and there is a concern for future supply. We think we’ve got a very special case there, which should allow us to attract the right kind of industry partner to bring this product to the next stage of production.
Opportunist: Is it true that your tungsten project exists below a vineyard?
Nikolas: Yes, of coincidence, at our Armamar-Meda concession there is a Port wine vineyard. As you walk amongst the vines, you can see where the outcrop is forming. Colt decided to acquire the vineyard earlier this year and will continue to use it to grow grapes above ground and to work underground. The two can coexist together. It’s our intention to continue to operate this vineyard and not to disturb anything above ground while also developing the tungsten deposit below ground.
Opportunist: How do the locals feel about that?
Nikolas: The municipality actually welcomes it. The whole idea of sustainable development is something we are very keen on and we want to showcase to the mining industry that industry and agriculture can cohabitate in harmony.
We were very careful as we were working on this project to identify the mineralization and as a result of this work, we finally came to our one estimate published in November. It was our first time to talk about tonnage.
Opportunist: How much tonnage are you referring to?
Nikolas: About 2 million tons. We are still drilling there and the deposit remains open in all directions. There will be an updated resource estimate next summer. This has given us a great beginning on this project and it will be one we will be working on for a number of years. We plan to get into production within the next two to three years, which is quite a fast track for a project of this type.
Opportunist: Please tell us more about your gold assets.
Nikolas: Our Boa Fé Shear Zone Gold Project is a major gold system. We have a series of high-grade gold deposits at surface. It’s a significant opportunity for us because the previous operators only focused on the high-grade portions of the outcroppings but it shows potential for us to prove that these deposits extend at depths beyond 80-100 meters. We hope to build on the historical numbers by incorporating a lot of the low grade gold that was completely ignored.
Opportunist: What is a shear zone?
Nikolas: Around the world shear zones are very often associated with major gold belts. Most of the major gold mining companies get the majority of their production from shear zones. We believed we’ve locked up a shear zone for which the previous owner only scratched the surface. This will unfold over the next few months as we continue to drill and expand the program. We will be raising the curtain on something the mining industry has sort of overlooked. Time will tell. It will be our job to expose the exploration. We believe our property has geological similarities to major gold producing areas around the world.
In terms of the gold product itself, gold is universal so we don’t have to explain the merits of a high gold project. The gain for us will really be to prove up what was developed by others.
Opportunist: What are Colt’s competitive advantages?
Nikolas: In terms of Portugal, we have been able to lock up some of the most attractive gold and tungsten projects. We aren’t a huge company yet, so we have the ability to act quickly on opportunities. I think we have been able to attract a very high quality group of people for our advisory board and we benefit from their advice and insights. Around the world there are thousands of junior mining companies, so competition is alive and well for investor attention, but I would say we have a higher quality group of talent around this story than the average of our peers of a similar market cap size and I think this gives us a bigger advantage.
Opportunist: How many people do you have on staff?
Nikolas: If you include the consultants that we have quasi-full time and full time, we have about 20 people. We have a great team with a very strong board. Declan Costelloe, our Chief Operating Officer and Executive Vice President, is a key partner helping me run the operations here in Portugal. Our administrative department with our CFO and our in-house legal department and chairman are based in Montréal. Essentially, we’ve got administration in Montréal and operations here in Portugal.
Opportunist: Tell us about a typical day in your line of work.
Nikolas: There is no typical day. [Laughs] Daily discussions with our operations team. Meeting with local officials, talking to investors, doing investor presentations, hosting people who come to visit our projects, interviewing staff and building the team.
Opportunist: What are some of your most memorable experiences in developing this company?
Nikolas: I guess the relief that comes every time you are able to reinforce your team with very good partners, associates and colleagues. It’s pretty lonely in the beginning when developing something like this, but now I feel we’ve got one helluva team and it’s making me sleep a lot better at night. [Laughs] Relocating from North America to Europe has been a bit of a whirlwind this past year.
Opportunist: What are the company’s expectations heading into the New Year and beyond?
Nikolas: We have to be careful what we say because the future rarely unfolds as planned [Laughs] but we have some of the highest quality projects in Europe. For the first half of 2012 we plan to continue with intense on-site drilling. We have a lot on our plate with these two projects and I believe they have a good chance of being in production within a few years. Each one in their own right is a company maker and we are blessed to have two of them. A review of our press releases in 2011 shows a continuous stream of good news coming from the projects.
I look at the last four years as the beginning of this company’s story. This fall we’ve closed a chapter at the end of the beginning. I think the combination of high quality assets; a strong advisory and administrative team and having a bit of a first mover advantage in Portugal will create a bright future for the company.
Visit Colt Resources Online: www.coltresources.com
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