Mining in Burkina
IMA CASANOVA: As part of our research process, we're always traveling. We have a number of trips planned this year and I know you just came back from Africa. Can you tell us a bit about what you saw when you were there? Were there any good opportunities?
JOE FOSTER: A big part of why we travel is to gauge the geopolitical risk in the areas we're investing in. I just got back from West Africa, a country called Burkina Faso. Most people probably don't know where it is, but it's a landlocked country in West Africa. Part of the reason for going there was to judge the geopolitical risks. We've been investing there for many years and it’s been a great jurisdiction for gold mining. The permitting process and the regulatory environment are very favorable for gold mining. But there is also an election next year and there are some risks around this election. It's the typical kind of African situation where you have somebody in power who is reluctant to give up that power. There could be a bit of unrest around the election, which comes later next year. A lot of our time was spent talking to everybody we came in contact with at the mines, and local people in the area, etc.
CASANOVA: And really, to assess that geopolitical environment?
FOSTER: To get a variety of views on how they think this election is going to pan out. We came back with a much better appreciation for what could happen moving forward and what things we need to watch for as this process evolves and we get closer to the election.
CASANOVA: Many of the companies that you met with while in Burkina Faso were smaller companies, juniors and mid-tiers. Could you tell us about that?
FOSTER: We invest across the spectrum, but in Burkina, it is mostly mid-tier and junior companies that are active. Most Burkina’s gold deposits are moderate to smaller-sized, so we find smaller companies there. Because of the favorable operating environment, there are quite a few interesting opportunities. We traveled all over the country with these companies and saw some operations and prospective developments that have low cost, which in our view may become very profitable mines and present nice opportunities for us.
CASANOVA: And you learned quite a bit by actually being at the operations. Many people ask this: why do you need to go and what is it that you get from actually being on the ground?
FOSTER: When you can talk with the engineers and the geologists that are actually running the projects, then you get some very valuable background on the property and the management and what it takes to manage the project. And you're there, on-site, looking at maps, going through the mines, seeing first-hand what are the opportunities for growth and potentially finding more gold mineralization in the area that can help the company grow the project. Yes, it gives you an added dimension to the research process that's very valuable.
CASANOVA: Of course, you can look at all those maps and cores and make sense of it, so that's very helpful.
FOSTER: It helps to be a geologist, yes.
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