El Nino Ventures Fast-Tracks DRC Copper Project

Jean Luc Roy knows a thing or two about fast-tracking projects in Africa. The president and chief executive of El Nino Ventures (ELN-V, ELNOF-O) has spent 19 years working in sub-Saharan Africa managing multimillion-dollar exploration budgets and starting up three different mines.

After five years as managing director of First Quantum Minerals (FM-T, FQVLF-O) in the Democratic Republic of the Congo (DRC), Roy joined El Nino Ventures in 2006 and moved quickly to make a mark for the Vancouver-based junior in the country.

In May this year, El Nino bought a 70% stake in a 350-sq.-km. property in the DRC’s copper belt. The site is about 120 km from the DRC’s border with Zambia and 60 km north of Lubumbashi.

On Aug. 20, the company announced it had secured a drill rig to start initial reverse-circulation (RC) drilling of 5,000 metres by mid- September.

“Once I knew I had it (the property) I wanted to fast-track it,” says El Nino’s Roy.

The drilling will test four anomalies identified in El Nino’s remote sensing survey of the area. The centre of one zone on the site also sits on known artisanal workings.

“When you have known anomalies and known artisanal workings you just go out and drill it,” Roy says. “There is no reason for delay.”

The drilling must be completed before the rainy season starts in the middle of November. The geological team plans to be on the ground at the end of August to prepare the sites and set up camp. The strategy in the first phase is to drill short holes of 100 metres on two of the four known anomalies.

The DRC copper belt has multiple world-class deposits and its exploration potential is considered to be one of the best in the world. The average grade of deposits is 4.8% copper.

El Nino’s project is in the same geological belt as properties that have yielded deposits and excellent copper values for companies such as Anvil Mining (AVM-T, AVMNF-O) and Tiger Resources (TGS-A). It is also adjacent to land held by major companies BHP Billiton (BHP-N, BLT-L) and First Quantum Minerals.

After negotiating for eight months, El Nino entered into a joint venture with a private Congolese company, the GCP Group, in May 2007. Under a structured deal involving a total of US$550,000 cash and 700,000 shares, El Nino secured a 70% interest in the joint venture and has the option to increase its ownership to 90%.

“When you look at companies going into the Congo, the structure of the deal will dictate whether you are successful or not,” says Roy. “I would not go into it with a minority stake; you need control and title.”

Roy believes that the establishment of a new mining code in the DRC and its first-ever national elections in 2006 will allow El Nino to be one of the most aggressive new exploration development companies in the region.

The new mining code is “competitive” and compares favourably with other mining codes in the region, he says, adding the tax structure is good. Once in production, the government takes a 5% stake in the company, compared with 10% in many other African countries.

The code also contains a stability clause, which guarantees that if the government changes its mining laws, those changes won’t affect mining companies on the ground for a period of 15 years.

“I think a lot of people can work with it,” Roy says of the code.

Roy also says he isn’t worried about political risk.

“The government in place is doing everything in its power to make it friendly for investors and I think you’re seeing that by the amount of money raised in the mining industry in the Congo over the last year,” he says, pegging the number at over $1 billion.

Despite the shift towards democracy, however, the country remains unstable, particularly in the east, according to Oxfam and other humanitarian aid agencies. Oxfam estimates that more than 1,000 civilians continue to die each day from conflict-related causes.

The DRC was at war from 1998 to 2003 and an estimated 4 million people died as a result of the fighting — many of them through disease and malnutrition — in what has been called Africa’s First World War. Many others fled to neighbouring countries for safety and countless people remain in camps far from their homes.

But Roy argues that most of the remaining unrest in the DRC lies in the eastern part of the country and says that the government “is doing everything in its power to have that situation resolved.”

As for the copper belt, he says, “there is no unrest to report on and mining companies are forging ahead with their exploration plans.” The copper belt “has always remained pretty calm,” he adds. “It’s not like the eastern part of the Congo, where the gold belt is.”