Tag Archives: David Broughton

Exploration Titans Brent Cook and David Broughton Talk Kaizen’s Discovery Trail (TSXV:KZD)

By Tommy Humphreys, CEO.ca, Mar 17, 2015

Billionaire mine developer Robert Friedland has said that real wealth in the mining sector is created by finding something.

Friedland would know this, having driven 5+ world-class mining discoveries in his career. He knows that to find a mine you have to spend a lot of money, and drill a lot of holes.

Another secret weapon of Friedland’s is people; he surrounds himself with impressive technical minds, and provides them with big budgets and plenty of autonomy to test their theories. Statistically speaking, explorationists who have already found mines are more likely to make future discoveries.

I first met Dave Broughton on an Ivanhoe Mines field trip to South Africa and D.R. Congo last year. Friedland stood beside Broughton at the site of Ivanhoe’s world-class Kamoa copper discovery. There, a Broughton led team had chased an exploration concept from stream and soil anomalies to drill targets and eventually, a world-class discovery. Kamoa was the first major copper discovery in the D.R.Congo in a hundred years.

At the 2015 PDAC conference in Toronto, Dr. Broughton and Mr. Friedland received the Thayer Lindsley International Discovery Award for their work finding Kamoa. This was the second time the Ivanhoe group had won the prestigious award at mining’s largest convention.

Just a few hours before Dr. Broughton received the award, he met up with Exploration Insights editor Brent Cook, CEO.ca cameraman Carter Smith and myself to talk a bit about his exploration methodology, as well as his plans for a next discovery.

David Broughton, Kaizen Discovery, Brent Cook, Exploration Insights, and Tommy Humphreys, CEO.ca discuss Kaizen’s Discovery Trail at the PDAC in Toronto, Mar 1, 2015:

Tommy Humphreys: I’m here with Dave Broughton who is the exploration boss at Kaizen Discovery as well as Ivanhoe Capital group, a very accomplished geologist, and my friend Brent Cook, editor of Exploration Insights. I wanted to introduce these guys because I think some of the work that Kaizen is doing is very fascinating and Brent hadn’t heard the story yet, and knows more than I do. To start off, what is the award that you’re receiving today and what brings you to PDAC?

Dave Broughton (DB): We are receiving, on behalf of a whole lot of people, the Thayer Lindsley Discovery Award, which is given every year by the PDAC for a significant international discovery. It’s the second time Ivanhoe group has won this. They won it for OT [Oyu Tolgoi] at the inaugural event when they first awarded it a number of years ago.

Brent Cook (BC): So now you’re up in the Yukon for something different?

DB: Kaizen, late last year, picked up a package of land and took over a small company with an adjoining package of land up in the Western part of Nunavut, and its another stratiform copper play like the one we found at Kamoa [Ivanhoe Mines’ DR Congo copper discovery]. There’s copper everywhere you land, so there are good signs when you just get on the ground and wander around. That’s been appreciated for a long time, it was discovered initially in the 60’s and some work was done then, but really, nothing’s happened for about 20 years. The last group of people to be in there in a significant way on the play we’re really excited about was Cominco and that was in the early 90s.

There really are two plays, there’s a volcanic hosted copper play, that has a lot of very high grade copper, well known, lode copper, I guess you’d call it, in volcanic rocks, and there’s a more, less appreciated play, which is what we’re really excited about, and it’s in the sedimentary rocks overlying it. The rocks are similar in age to those in the copperbelt which is intriguing, and there’s mineralization that’s outcropping and in most places it’s covered, certainly 95% cover. 150 kilometre strike of these sedimentary rocks with copper showing here and there but it really hasn’t been tested.

BC: How many holes have been put into this?

DB: Well, Cominco put about a half a dozen holes at the far eastern end of the area and the rest is basically untouched.

BC: What did they find?

DB: They hit mineralization. They didn’t hit an ore grade intersection over ore grade widths, but there are lots of holes at Kamoa or Kupferschiefer, or anywhere you want to go in these systems, you don’t always hit ore on your first hole. The usual things right: persistent and all that.

BC: What sort of width and thickness are we talking in this horizon from the drilling you’ve got so far?

DB: You’ve got mineralization over metres in lenses and so on. There is some government geophysical data that gives up some idea as to what the big structures might be that might help control mineralization. We have some old prospecting that we know about. It’s really going to be getting on the ground and walking those contacts and making up our own mind of where we can find mineralization. And then we’re looking at doing a series of widely spaced stratigraphic holes, just like you would in other districts. You’ve really got to step back. These things go for kilometres, Kamoa is 50 square kilometres in area, so you really have to look at it at a base of scale and then narrow in on what you find. We’re going to take a big-scaled approach to start with and test as much of the strike length as we can, I think.

BC: What’s the access like?

DB: The access is actually excellent. We’re just south of the old town of Coppermine.

BC: Ah, the old famous Coppermine?

DB: It’s a short helicopter ride from there to the project. There’s an airstrip, regular air service. There’s an old air strip actually on one of the properties we’re going to use for direct access with a fixed wing aircraft, so it doesn’t get much better in that sense.

BC: Conceptually, what do you need to see, what do you need to find there to take it to the Kamoa stage, or up to a stage where it’s a world class deposit or something that’s really profitable.

DB: Like anywhere, you want to drill a discovery hole that’s got an ore grade and width and then you want to step out from that and build tonnes. That’s what it’s all about.

BC: What grade do you need?

DB: Up there, good question. Kamoa’s average grade is close to 3%, there are other deposits around the world that have that. If you get 3% copper of sufficient width, you’re in business.

BC: So that’s how we can judge your program. Although admittedly the first round is basic geology which I think is really smart. Get a handle on what’s going on and then zero in. If we’re going to watch this play, it’s about, first off, we get the concept, it’s coming together or it’s not coming together, here’s our targets, next round or two rounds after that, we’re getting low cost mineable widths over 3+% copper, okay.

DB: That’s the objective but like anything, you find what you find, and you go with it. They are mining the Kupferschiefer at under 2%. It really depends on all sorts of other factors, I’m not going to be able to predict that.

BC: You’re not that good yet?

DB: Not that good yet, sorry.

BC: What sort of shape is the company in? How much cash do you have and what’s your market cap?

DB: We’re in good shape. We’ve got a unique strategic relationship with the Japanese trading houses, they fund a number of our exploration projects, and we’ve got a long history of relationships with them, going back to the Ivanhoe group as well. That’s kind of our key strategic difference that we’ve got. In addition, we’ve got a treasury and no debt so that helps too.

BC: They are funding by way of placements, or getting a piece of the project, or an offtake agreement, what’s their relationship?

DB: It varies project to project. We have projects in BC where they are funding the exploration directly. They are interested in the offtake in the long term for Japan; that’s really what’s driving them. And we’re interested in the metals that work for that reason.

BC: That was Kaizen. They are looking for stratiform copper in Nunavut. Actually pretty interesting concept. If they can pull together a large enough volume of rock at 3%, which is what they’re after, it sounds like the infrastructure is not too bad, that could be quite significant. They’ve got a good deal structured with a number of Japanese groups, so it’s worth watching for sure.

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Kaizen Discovery (TSXV: KZD) Offers Investment Dollars, with the Help of a Japanese Business Partnership, for Undervalued Mining Properties

MetalNews.com, Mar 2, 2015

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Matthew Hornor, President and CEO of Kaizen Discovery (TSX: KZD), spent some time with Metals News to discuss his company’s business model and the innovative way they have chosen to enter the mining industry.

Mr. Hornor said, “Our stated business purpose is to seek out high quality, undervalued opportunities in a troubled mining sector and partner with one or more Japanese trading houses. We came into this about a year and a half ago.” Matthew Hornor brings to the company a long background in business and law. He said, “My background is as a corporate finance lawyer. I spent a lot of time in Japan, speak the language and lived there. It has always been a passion of mine to be attached to that country in some way. I like their ethics and their approach.”

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During his time in Japan, Mr. Hornor built relationships with a group of business owners that were looking for opportunities. He said, “I have been a part of a collective group of companies for about a decade. I have helped many of these companies obtain financing. In one financing I led, we raised approximately $300 million from a consortium of Japanese investors for Ivanhoe’s Plantreef project in South Africa.” This experience led him to his current business model. Mr. Hornor said, “The idea is to take advantage of the buyer’s market and be able to advance projects in a tough cycle when there aren’t a lot of investors. We can put up investment dollars – that’s the difference.”

Matthew Hornor has used his experience in Japan to build Kaizen Discovery. He said, “The Japanese companies that we work with are primarily trading houses. They are looking for offtake to provide to their dealers, like Nissan and Toyota. In 2014, we entered into a strategic partnership with one of the trading houses, ITOCHU Corporation. ITOCHU invested $5 million for a 6% interest in the company. We also found Tundra Copper, an exploration company with a high-quality copper project and acquired it last year. We expect that our Japanese partners will provide funding to explore the Tundra ground. We also are taking a hard look at Tower Resources in BC. We are in an exclusive negotiation period with them right now.”

Using the leverage of the trading houses allows Kaizen Discovery to take on more projects in the mining sector. Mr. Hornor said, “You can look at us as a P/E fund. We have a decent treasury with access to additional funding from our Japanese partners. We think it is a winning model. No one has ever done it this way before. It requires a few key ingredients. You have to have a track record where you can raise money in Japan and a reputation that will allow you to get in front of them. You need M&A and mining experience, but most importantly, you need to have developed trust.”

This level of trust has allowed Mr. Hornor to work quickly to build up Kaizen Discovery’s assets. He said, “We are finalizing a drilling program in New South Wales in Australia. We anticipate finalizing the Tower Resources deal and obtaining the support of our Japanese partners during the second quarter of this year. We are also looking at interesting projects in South America that are shovel-ready with defined resources. We have been looking at South America for a while. After Tower Resources, we will look closely at prospects in Chile and Brazil.”

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*Projected work programs may change following meetings with financing partner

Geographically, Kaizen Discovery works as close to Japan as possible. Mr. Hornor said, “We are focused on the Pacific Rim because it is easier for the Japanese to be comfortable with in regions with less political risk. David Broughton is our Executive VP of Exploration. David will be receiving an award at PDAC for his work with Ivanhoe Mines in the discovery of the incredible Kamoa copper deposit in the Democratic Republic of Congo. We believe we have a project that looks a lot like Kamoa with similar geology and rock age. Because of David’s expertise, he was the ideal choice for running the exploration program on our Coppermine project.” In addition to Mr. Hornor, who travels to Japan about ten times per year, Kaizen Discovery also has managers in country. Mr. Hornor said, “We have a team in Tokyo that runs the Tokyo office. They stay in contact with our trading and industry partners.”

Investors who are looking for an innovative investment model may want to do some further research on Kaizen Discovery. Mr. Hornor said, “We acquired Concordia – 85% of that – and now we are sitting at about 160 million shares. Most of that is held by HPX Techco, which is a privately-held, Robert Friedland-backed investment company. Our share structure is not bad at all. About 50 million shares are publicly traded.” Who is an ideal candidate to invest in Kaizen Discovery in Mr. Hornor’s mind? He said, “If somebody wants to play the buy low, sell high market here and they want to back a group that has a proven track record of finding and building mines, that is exactly what we offer. We have a very strong team that has done this before. We have unique access to funding from Japan and we have large investors that protect the stock and prevent dilution. We have embedded strategic partners from day one. We also have geophysics tools that enable deeper prospecting than most. That gives us a decided advantage in areas such as Chile where it is hard to complete drilling or where you are drilling blind. In a tough market, we can find resources with our advanced technology. In my opinion, such a combination provides very little downside and an unlimited upside potential”.

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http://www.kaizendiscovery.com

Office

Kaizen Discovery

World Trade Centre

654-999 Canada Place

Vancouver, BC V6C 3E1

Canada

Phone: +1 604 669-6446

Email: info@kaizendiscovery.com

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