Promising Arizona copper explorer shares its strategy

POSTED ON June 10, 2015 BY Oliver Gross
CATEGORY Desert Star Resources,

The following interview was conducted via Skype between Oliver Gross, a Munich-based mining analyst and blogger and Vince Sorace, the Vancouver, Canada-based CEO of Desert Star Resources (TSXV:DSR). Desert Star is a copper exploration company active in SW USA set to drill test two exciting targets this year.

Oliver Gross (OG): Thank you for agreeing to answer some questions, Vince. Please start by giving us a bit of an overview of what makes the Desert Star story compelling or unique?

Vince Sorace (VS): Its starts with the team. Desert star has built an exceptional technical team backed by a strong, business minded management team, which is the starting point for any successful organization, and is not the case amongst hundreds of junior mining companies out there.

We believe that in these current market conditions – where the vast majority of juniors have stopped exploration activities – yield the best opportunities to source and acquire great projects. As challenging as the markets currently are, there is still money available to back the right teams with the right projects.

We also have a defined focus. Most of the “easy” deposits (at surface) around the world in workable jurisdictions have been exploited. For the most part, we believe the next wave of discoveries will be deeper deposits. Our focus has been to build our technical expertise and institutional knowledge in specific copper-endowed districts to be able to identify the more subtle surface expressions of buried systems. These systems have historically gone unrecognized or have been uninteresting due to economics requiring high grade near surface. We believe that in these mature, well-endowed districts like Arizona, there are many more discoveries to be made using this methodology.

We utilize stringent criteria in project selection, as deeper deposits need to be large and contain higher grades to be favorable to senior mining companies. We also understand that to be successful at exploration, we will need to drill test many targets to make discoveries, and are currently redesigning our planning to be very efficient and cost effective through the process. Drill testing high quality targets like that of Red Top and Copper King greatly enhances a company’s ability to make that discovery earlier and potentially multiple times over.

OG: Why Arizona?

VS: Working in the southwest U.S.A, and more specifically Arizona, offers comfort in that we are dealing with a mature mining culture, and consistent laws. We are in a very safe political jurisdiction and in one of the world’s most prolific copper belts. So we have both the opportunity for discovery and peace of mind that the project will not be expropriated by a corrupt government or subjected to sudden changes to mining tax regimes. Arizona is also located close (relatively speaking) to our team. This allows us to cost-effectively put more “boots on the ground”.

OG: What can investors except in the rest of 2015?

VS: For the second half of 2015 we will see two very exciting drill targets tested (Red Top and Copper King) which, through success, offer tremendous upside potential for the company. Also, and as a result of our ongoing project generative efforts in Arizona, we expect to start making land acquisitions that we anticipate to yield targets of the same quality as Red Top and Copper King.

OG: How is your current financial situation?

VS: We are fully funded to drill test the Red Top and Copper King projects this year, and are working on alternative funding efforts to finance our ongoing generative program. We are very sensitive to the dilution of our current capital structure, and therefore are creating ideas around strategic partnerships and non-capital dilutive mechanisms to advance the company’s longer term strategic vision.

OG: What are Desert Star's long-term goals?

VS: Our long term goals are to be the premiere exploration company in the southwest U.S. We believe over the course of the last 24 months and the coming year, we will have developed more inherent knowledge and technical expertise than most, if not all, other junior explorers in this district.

With that knowledge, specific to the identification of more subtle surface expressions of buried systems, our goal is to acquire and drill test over 10 high quality targets in the coming 3 to 5 years. We believe this gives us the best odds at making a significant discovery, and potentially multiple discoveries.

OG: Can you tell us about your backers?

VS: Desert Star was previously a listed company which was re-organized and financed by the current management team and financiers close to it. Since then, the company has done two capital raises with a very small number of local investment advisors who understand junior exploration and are great supporters of the company. We believe we have a very good shareholder base who have long term objectives and will be very supportive of our company moving forward.

OG: What’s your current outlook for copper?

VS: I am not a commodities analyst, but I do believe with the trend in global urbanization and population growth, and therefore the growing need for infrastructure and technology, copper will continue to be a commodity in growing demand. As we are operating at the earliest stage of a copper mine’s life cycle, the short-term copper prices are not particularly relevant to any deposits we discover. The potential buyers of the deposits we hope to discover have 50-year plans, and an insatiable appetite to replace their ever-depleting reserves.

For more information, visit Desert Star's web site and read its filings on www.SEDAR.com. This is not a recommendation to buy or sell any security. Always do your own due diligence and talk to a licensed investment advisor prior to making any investment decision. Oliver Gross is a shareholder in Desert Star at the time of writing.

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Oliver Gross

Passionate investor, resource expert, analyst, advisor, chief editor, financial journalist, blogger More →

Twitter: @OliverGross_JRB

og@smartrelations.de

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