Categories: Precious Metals
Topics: General Precious Metals

CEO Paul Kuhn on Avrupa Minerals (TSX-V: AVU)(OTC: AVPMF) Projects and Catalysts

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is CEO and Director of Avrupa Minerals (TSX-V: AVU)(OTC: AVPMF), Mr. Paul Kuhn. Mr. Kuhn joined Avrupa Minerals in July, 2010 after working with Metallica Mining in Norway since August, 2008. He has more than thirty-five years experience in the minerals exploration business in North America, Central Asia and Europe. Avrupa Minerals is a prospect generator that looks for valuable mineral deposits in politically stable and prospective regions of Europe, including Portugal, Kosovo and Germany. The company has a number of joint ventures in place and provides exposure to a variety of commodities that include copper, gold, zinc, silver, lead, and tungsten. Paul, thank you for joining me today.

Paul Kuhn: Thanks, Gerardo. I appreciate it. Looking forward to chatting more with you.

Gerardo Del Real: Definitely. I provided a brief introduction but for people that aren't familiar with you, could you please provide a little more detail into your very diverse background?

Paul Kuhn: Well Gerardo, I'm a geologist. I've been working as a geologist in the business as you mentioned for thirty-five years. It's actually probably closer to forty now. It's a little scary but I've been around for a while. I've worked in the phosphate business and the uranium business, that's my first jobs but since 1980 I've been in the basic precious metals exploration, mostly in North America, Turkey, Central Asia and Europe. During that time, I've been involved in a number of successes in Turkey and in Europe, several of which in Turkey have turned into mines, and one in Kosovo with Avrupa that could possibly turn into a mine as we figure out more about the property and continue to work on the prefeasibility study.

Gerardo Del Real: Fantastic. Can you share with us how you got involved with Avrupa? You mentioned that very diverse background and nearly forty years as a geologist. Could you tell us a little bit about how you came to be involved with the company and a little background about the team at Avrupa if possible?

Paul Kuhn: Sure. I, back in 2008 through 2010, I was working with the Metallica Mining in Norway, as you mentioned. That company began to have financial troubles and in the end, I helped divest the company of all of its assets, including projects in Norway and Kosovo, and in Portugal. Mark Brown's group at Pacific Opportunity had an available shell that, in the end, purchased the Kosovo and Portugal properties from Metallica and Mark asked me to come along with the properties. That's how I got involved into Avrupa Minerals. It actually had another name before we got started but in the end we called it Avrupa because that's the, actually it's the Turkish word for Europe. Our focus is strictly in Europe and the Mediterranean Basin.

We are a prospect generator, as you mentioned, and we, what we do is use our geological skills and knowledge to acquire, look for, find decent metals properties around Europe. We're looking for properties in stable parts of Europe, places where we know we can work, places that have a long history of mining perhaps, and places where there's a lot of old information available. What we do is single out some of these areas for work. We've done that in Portugal and Kosovo and to some extent in Germany. We single these areas out and use our skills to upgrade the properties to a point where we find a more risk tolerant company as a partner to start funding the major work, the drilling and beyond that. In return for the partner's funding, they acquire an interest in the property, eventually perhaps acquiring up to seventy-five percent of the property with Avrupa maintaining twenty-five percent. It's a strict prospect generator model. We generate new ideas, use our smarts to work in these areas and then we get somebody else, preferably a mining company, to do the heavy lifting. That's been our modus operandi since 2010.

Gerardo Del Real: That's excellent, Paul. Now, that's a model that's worked very well for a lot of companies. I know people like Rick Rule and the Jeff Phillips of the world, they really subscribe to the model because it limits dilution. Now, Avrupa's really interesting to me because it has a current market cap of approximately C$10 million but has ...

Paul Kuhn: About C$12 million, actually.

Gerardo Del Real: About tC$12 million, okay. It's received over C$15 million if I'm not mistaken, of funding from JV partners, and over fifty percent of shares are held by eight groups, which of course leads to that very tight share structure. I highlight that because you are exploring in world class districts. You've had some early success at several of your projects. It's early stage but positive and if you're able to demonstrate a discovery of significance, the upside is pretty compelling considering that C$12 million dollar market cap. Which projects are you most excited about right now, Paul?

Paul Kuhn: Well, let me back up just a second, Gerardo. First of all, I want to highlight the fact that we've got a great team, a great geological team and a great financial team in Vancouver, lead by Mark Brown and Winnie Wong. The reason this works so well, the reason we've been able to utilize that C$15 million in JV funding is because I've got a great geological team. In that funding, we've made two significant discoveries in the past two or three years. We're really doing the prospect generator model, well we're utilizing it very well. We're using partners' money to make discoveries. We've made one in Portugal and we've made one in Kosovo. Right now, the answer to the last question is we're really excited about the Kosovo program.

We have a gold discovery, called Slivovo. Our partner is in the process of producing a pre-feasibility study. They've spent over 1.5 Euros this year alone in getting the PFS going and we expect it to be completed by the end of the year. What we have is a small high grade surface reachable gold deposit that looks like it will have plenty of opportunity to get larger. The resource estimate we put out earlier in the year gives us about a hundred thousand ounces of indicated resource at Slivovo and we're going to be completing a updated resource estimate during Q4 of this year. We're excited about Slivovo. It's going well. Our partner, when the PFS is completed and we've accepted it, our partner will hold eighty-five percent of the license. We will then be in a position to fund our fifteen percent share of the ongoing work or dilute down to a two percent net smelter royalty. We have a choice coming up ahead and either way looks interesting to us. That's our Kosovo program.

In Portugal, we made a discovery on our Alvalade project. The discovery is in the pyrite belt of Portugal. It's a zinc copper massive sulfide discovery. We've had the property on hold for this year. Our partner has been having a tough time with funding but they've got funding coming in now and we're going to get it started up again towards the end of October we're expecting and so we're going to have some news coming out of that this Fall. We need to do drilling. We were planning a couple thousand meters of drilling this Fall, if we can get started quick enough. That will certainly add on to our zinc copper discovery there at Alvalade.

Those are the two most exciting projects. We've got three other licenses in South Portugal that look good. We're looking for joint venture partners for those. We've got two more zinc copper projects in the pyrite belt and one iron oxide copper gold project adjacent to the pyrite belt. We've got, basically we've got two thousand square kilometers of attractive licenses to work on in Southern Portugal. We're expecting to have more good news out of those as well.

Gerardo Del Real: Excellent. Now Paul, I want to back track just a little bit. You mentioned a resource estimate at Slivovo and I know that the most recent new release for that project returned some very good intercepts. They included twenty-three meters at four point three seven grams a ton, if I'm not mistaken, and twenty-two point six meters at three point two nine grams a ton, gold, from relatively shallow depths. Now, there were some interesting interpretations in regard to the host rocks beneath a thrust vault and I'm not a geologist, but you definitely are, can you please talk about those results and explain why that was important? Will those intercepts make it into that new resource estimate?

Paul Kuhn: Absolutely. The new resource estimate will include the area called the Slivovo or the Peshter Gossan Extension Zone. You may know or earlier remember that our first resource included what was called the Peshter Gossan, or the Main Gossan. Out of that zone we got an indicated resource of about a hundred thousand ounces of gold. The Peshter Extension or the Gossan Extension Zone, which is where we worked this year and included these two nice zone results that you just mentioned, is an extension of the Gossan Zone and we've extended it out about ninety meters from the Main Gossan Zone. This is significant because the drill results you mentioned include areas within that ninety meters showing that the deposit is open at strike length. We think we can go out beyond ninety meters. What's more interesting, is that previously we had thought that we did not have mineralization below a bounding fault zone, which we saw in our Main Gossan. It's all the same fault zone in the extension Gossan, the Gossan Extension, and we drilled through it because we were in the right rocks, which did not show up on the other side. Because the right rocks were there, because we drilled into them, we learned pretty quickly that we have actually mineralization below what we thought was a barrier or a dam, or a boundary of mineralization.

Not only are we increasing strike length or length of our showing, but we're now going deeper than we expected, below again, below the boundary. We have a whole new area to start thinking about and our partners are hoping to work on that next year. We're done for drilling for this year but next year, as they continue, as we continue, we look forward to not only extensions within the strike length of the extension zone, but also down below, down in depth as well, in addition to some other targets that we've generated on the property this Summer. It's very exciting. We're looking forward to a modest increase in our resource for this year but we'll be able to get more information on that towards the end of the fourth quarter.

Gerardo Del Real: That is exciting. We have a resource estimate pending and we also have drilling next year following up on, and some of these new interpretations that you've been able to outline. Now, are you looking at additional properties or potential JV partners? I know you have a very large land package as it stands but are you looking at adding properties or bringing in additional JV partners to explore that package?

Paul Kuhn: The first thing that I need to do, or we need to do is to acquire at least one more joint venture partner. Like I said, we've got three licenses available for joint venture in South Portugal. All three of them are basically drill ready. We are talking with major mining companies, larger mining companies to help us with these joint ventures, so yes, I am looking for potential joint venture partners, but at the same time, I've got to find some new, fresh properties for the pipeline and that's mainly going to happen in Portugal and Kosovo. I'm actually, I've actually got a really cool generative idea for Kosovo. It won't cost very much. It's a small country and they don't have to run around too far but I'm looking, I'm talking to a couple of groups to help us fund that program. We found the Slivovo gold deposit in Kosovo. There's got to be more of them around and we think we're the right crew to have a real hack in that and we will. I am looking for new ideas in addition to partners for our existing properties.

Gerardo Del Real: Great. Well Paul, hopefully you're able to come back on and share the details of those ideas and how that develops. I want to thank you so much for your time today. Is there anything you'd like to add, maybe something I missed, Paul?

Paul Kuhn: No. I think this was a great interview, Gerardo. I really thank you for your time on this. For potential investors and shareholders that might be listening here, Avrupa is using the prospect generator model to their advantage. We use our partners' money as much as we can, probably our ratio of partner money to equity funding is one and a half to one, so we're efficient in funding, both by equity and with partners, and with our geological team and strong financial group in Vancouver. We expect to be out in the forefront of new discoveries in the near future.

Gerardo Del Real: Excellent. Paul, thank you so much again for your time. We're looking forward to details and discoveries in drilling. Again, hopefully you come back on soon.

Paul Kuhn: Sounds good, Gerardo. I'm ready when you are.

Gerardo Del Real: Thank you Paul.

Paul Kuhn: All right. Catch you later. Thanks.