The Gold Report: The Inception
Mining Inc. (IMII:OTCQB) home page describes the company as diverse, agile and efficient.
Why do you want readers to think about those specific words when they think
about the company?
Trent D'Ambrosio: Diversification is critical in today's metals
markets. Inception Mining currently has a producing facility in Honduras, a
development-stage project in Idaho, and plans also include expansion of our
existing resources and increased exploration efforts in Nevada. Those
actions, we believe, will allow us to remain agile. We have the ability to
scale some of our projects up or down depending on commodity prices and
market conditions. One asset, the U.P. & Burlington project in Idaho, is
fully outsourced, which allows us to effectively manage overhead by actively
working on the project as we see fit.
TGR: In which ways is Inception efficient?
TD: We started when the majority of junior mining companies were
struggling, so we had to focus on being more streamlined and cost conscious.
We did that by utilizing a manufacturing model and fine-tuning production and
staying focused on our employee count to limit the burn rate. We've tried to
use modern technology where possible and the most advanced mining and
exploration techniques. That has made our operations quite efficient.
TGR: Are your general and administrative costs at the lower end of
the scale?
TD: Very much so. We have a slim staff in the U.S., very modest
operations and have limited salaries. We've tried to maintain a low overhead
from top to bottom.
TGR: This market has been challenging for junior mining companies,
even the best ones. What about Inception Mining makes it different?
TD: We have used that market to our advantage. When we launched our
company, we didn't have the luxury of high gold prices and easy access to
capital that the majority of other juniors had years earlier. Those companies
often had open checkbooks, so they could be aggressive. Sometimes that works,
sometimes it doesn't. We started when capital was more difficult to come by,
so we had to be diligent and disciplined in our process and only pursue what
we believed would be profitable ventures requiring lower capital investment.
We've had to further adapt to this difficult and challenging market
environment by remaining extremely flexible.
TGR: Tell us about CEO Michael Ahlin and yourself.
TD: Michael has a significant background in mining. He's an
engineer and has spent a great deal of time building mines, so he understands
the importance of cost-effective management. He has an MBA and is as good as
it gets when it comes to dealing with people, contracts and other types of
difficult negotiations you have when you operate a resource company.
I'm on the other side of the equation. I have a lengthy background in
financial services. I understand the importance of proper capitalization,
expense management and how to align your company with the right partners. We
make a complementary team and feel fortunate to be in our respective
positions.
TGR: What sort of plans does Inception have for exploration and to
possibly make deals?
TD: We are positioned very well for deal making, exploration is
always on our mind, and we are very optimistic about the future. We plan on
using the majority of excess cash flow for resource expansion and we are
maintaining our very conservative attitude with our budget. But we will
evaluate all opportunities and make the best possible decisions for the
company's continued success and growth.
TGR: Inception Mining's flagship operation is Clavo Rico in
southern Honduras. There are more established gold mining districts in
Central America. Why Honduras?
TD: I believe that the lack of maturity or establishment as a
leader in gold mining is one of our biggest advantages. However, it is
important to remember that Honduras has produced resources for hundreds of
years, specifically gold, and is working diligently to migrate as a player in
the world economy. We have significant holdings with extensive potential and
operate on only a very small percentage of our holding. We believe that the
expansion potential is our most exciting attribute and represents a great opportunity
for Inception Mining.
TGR: What's your plan to further develop Clavo Rico?
TD: Honduras has adopted more progressive regulations and laws that
are focused on maintaining and improving its acceptance in an expanding
global economy. This will assist us during our development of the Clavo Rico
project with plans to more than double production during the coming years. As
mentioned, we have extensive holdings with very good geological data. We
believe we're working a rich and extensive gold deposit and with a production
plan that forecasts the ability to produce gold for a long time to come. We
are currently expanding our resource analysis, we have initiated additional
drilling, and production expansion is under way.
TGR: What is the current production per quarter?
TD: Quarterly, Inception Mining produces approximately 2,000 ounces
of gold; with plans in place we expect to significantly increase production
in 2016. We're running at about 35% of current capacity. The great part is we
have been updating equipment and streamlining processing while increasing the
current production rates with little down time. We will continue to expand
production when the financial viability exists. If and when we choose to, we
have the potential for underground expansion with access to additional
deposits. We are in a unique position with numerous opportunities for
expansion.
Clavo Rico Mine,
Honduras. Photo courtesy of Inception Mining.
TGR: Is the revenue you're generating from production going back
into the operation?
TD: Absolutely. Inception's primary objective is to accelerate
production.
TGR: How long before you expect to be cash flow positive?
TD: We are cash flow positive today and hope to increase that over
the next 12 months. Obviously, some outside influences could affect financial
results but we anticipate positive cash flow in 2016.
TGR: When do you expect to release a maiden resource at Clavo Rico?
TD: There is significant data in place that has been accumulated
over numerous years by different groups using various methods. We are
aggressively expanding the data on the resource with plans to assemble it in
a more digestible format later this year. The company is focused on ensuring
that the data is compliant with NI 43-101 reporting standards. Based on the
current data, we believe the resource could be significant but the data is
not yet ready for release. However, we have a production history and have a
good understanding of our mine life and ore body.
TGR: Would Inception be interested in joint ventures?
TD: Joint ventures are always exciting. We have no immediate plans
but we will evaluate opportunities that arise.
TGR: Inception Mining is investing in reforestation and water
treatment efforts near Clavo Rico. The company also built a trade school in
El Corpus, Honduras. Tell us about your philosophy when it comes to
sustainable development and community engagement.
TD: El Corpus is similar in some ways to U.S. mining towns around
the turn of the 20th century when the entire town worked at the nearby mine.
The mine is one of the largest employers in the area and a cornerstone of the
local economy. We believe that the community is the mine, so we want to
ensure that the mine gives back to the community. We are working with local
government leadership to improve the community and make it more prosperous.
We take the environmental obligations very seriously, and they are part of
our day-to-day operation.
TGR: Tell us briefly about Inception's other project.
TD: Our initial project is a group of patented claims in Idaho
known as the U.P. & Burlington mine. The mine last operated in the early
1900s and had significant production. We have done extensive work to restore
the operation to a production-ready status. Our most recent accomplishment is
the completion of a bulk sample, and we have received some positive results.
The mining operations are fully outsourced via contract mining and offsite
contract milling, so our capital contributions are more easily managed when
it is time to migrate to production; additionally, it should remain in a
lower cost of production position when comparing it to our peers. This
streamlines the management of the project and allows the company to remain
very efficient and agile. It is a seasonal operation with significant
snowfall. So when the snow melts, we could move in, complete our agreement
and go right into production. We hope to see production from U.P. & Burlington
in the summer and fall of 2016.
TGR: How does the contract mining work?
TD: We have an experienced mining contractor in place on a per-ton
basis for extraction. Per our agreement, the underlying mining contractor
utilizes its employees and its equipment, and shares in the regulator
management for the project. We have an agreement for hauling to an offsite
mill and have processed ore with the contractor on a per-ton basis. It is an
excellent solution for the project because it streamlines the management process
and allows the company to remain agile and efficient. It has assisted us in
reducing capital expenditures on this project while allowing for ease of
migration to the next stage of development.
TGR: What's the one thing you want readers to remember about
Inception Mining?
TD: We are a producing gold mining company that includes a
development-stage asset, and we have significant exploration potential. We've
executed and plan to continue to execute our business plan and plan to
migrate to the next level.
TGR: Thank you for your time.
Trent D'Ambrosio is the founder, CFO and a
director of Inception Mining Inc. From October 2011 through the present,
D'Ambrosio has held the positions of interim chief executive officer and
chief financial officer of Inception Resources LLC. and Inception Mining Inc.
and is responsible for the overall strategic direction for the organization.
D'Ambrosio's professional record includes 25 years of management and
financial services experience with companies ranging from Fortune 500
companies to start ups.
