This year one of the big stories in mining was the acquisition of European Goldfields by the Canadian firm, Eldorado Gold Corporation. Since then fellow Canadian's Euromax have wasted little time in capitalizing on this, bringing over the core of ex-European Goldfields management team and appointing a new CEO and president. We caught up with new Euromax Chief Executive Steve Sharpe to find out just how the firm plan on capitalizing on this vacant space on the European gold market.

 

Now you've come over from the former European Goldfields operation to take the position of CEO and President, and the core of the previous management has also followed. Why the wholesale transfer of management here?

We originally looked at Euromax while we were still at European Goldfields. We were particularly interested because of the Skouries project being in northern Greece. We saw the Ilovitza in Macedonia that Euromax owns has very similar characteristics. Our technical team got very excited about the possibilities, particularly with the infrastructure that's available and the same geological characteristics.

 

What strength, in particular, do you feel you bring to the role as CEO?

I think 25 years of experience in the mining sector, financing mines largely, than operating them. But I do have a vision for this company, that in five years time it will fill the space that European Goldfields has vacated, and that being a purely European gold producer. I do think that there's a particular niche in the market that we can fill. There's lots of demand for gold -- over the last twenty five years that's been relatively muted, but over the last two or three years gold as a safe haven currency has taken on new characteristics. It's a commodity that all fund managers have to be aware of and have to hold. As a read through from that, gold equities however come from the less stable political jurisdictions. So for the reasons you are buying gold, the opposite applies when you're buying gold equities. I think European Goldfields offered that niche to investors, that's now gone with the Eldorado transaction and I would like to see Euromax filling that position of FTSE 250 gold only, European only, mining company within the next five years.

 

Now speaking of listings of course, you're planning a move to list in London next year, what do you hope to achieve from this listing and most importantly does this mean you're de-listing in Canada?

It certainly doesn't mean we'll be de-listing in Canada. I do think there is a tremendous amount of value that can be added to Euromax, particularly where it is in the development cycle. Currently we're an exploration company moving through into development. At European Goldfields, we had a large institutional shareholder base and I'd like to involve those in Euromax at a much earlier stage than perhaps they became involved at European Goldfields. In order to facilitate that, we will need to move from the TS Venture exchange up onto the main board of the TSX. So we won't be de-listing from Canada, but we will be changing our listing in Canada.

 

Now your recent fundraising saw you raise $6M from the management team, rather than external sources, why the private placement and how are you benefiting from this?

Well, we made a very conscious decision that first of all we thought it was a good idea but secondly we wanted to demonstrate to the existing shareholders and the market that we're backing ourselves with our own money. In fact we turned away institutional investment in this first round. We raised just enough to take us through to the London listing -- the absolute minimum requirement. Because we do think the company's considerably undervalued at the moment and so we didn't want to raise more than we absolutely had to.

 

But what's the story with this new fundraising, how will the money be spent next year?

It's a very straight forward story, there's a series of incremental steps that I believe the company can take to add value from its very low valuation at the moment. So we will initially start by infill drilling at Ilovitza. That's rather than the previous management had done which was to expand it resource base, what we're looking at doing is actually improving the quality of the resources and taking it through into development and production. So we are immediately doing the infill-drill program and we have three rigs on site now conducting that work. So that infill drill program will take us through to a reserve by June of next year at which time that will co-inside with the London listing.

 

I know you were looking to shift the focus of Euromax to a gold exploration and development company. Where do you see the primary development for the company?

It's interesting because the flagship project of the company had hitherto been in Bulgaria at Trun project. Because of our understanding of Skouries, which is the European Goldfields project, and having done a lot of the works on the economics and a lot of the technical work based on that project, we saw the value in Ilovitza in Macedonia. And there, there's a very clear timetable through to development. We do the infill drilling that we will then run into a feasibility study once we've listed in London. There's a very clear permitting timetable, so it will see us going into production in 2017.

 

Now your primary asset is in Macedonia. What makes the country an attractive investment opportunity?

I do believe that one of the biggest issues facing the mining industry is permitting globally. And I mentioned earlier that we were particularly keen on having European gold production in five years time because I think there's institutional demand for that. The reason there's a gap in the market is that it's particularly difficult, or perceived to be difficult to permit projects through the environmental stage etc within Europe. Europe has all the benefits of the infrastructure, but it's a long and drawn out permitting process. In Macedonia, completely the opposite to what we found in Greece. We found a young dynamic, responsive Government who are willing to listen to what we've got to say and are willing to work with us in terms of facilitating inward investment, both for the benefit of the Euromax shareholders and for Macedonia as a country. I recently met the prime minister and minister of economy both of whom have given us their full support with this project.

 

It looks like it's going to be an eventful five years for Euromax. Steve Sharpe, thank you very much.