"The signs indicate a promising trend for exploration, particularly in copper, cobalt, and lithium, especially in Zambia."

Kris Jedrzejczyk

MANAGING DIRECTOR, BLU ROCK MINING SERVICES

January 12, 2024

Can you provide an overview of Blue Rock's developments and achievements in 2023, emphasizing the expansion of operations in Zambia and the DRC?

In 2023, our key achievement centered around a strategic expansion of operations. We acquired cutting-edge machines, enhancing both our Blue Rock Zambia fleet and capabilities in the DRC under Blue Rock Sarl. Collaboration with B Metals tackled a challenging project near Angola, requiring intricate logistical solutions. Our involvement with Glencore at KCC highlighted proficiency in tasks like installing Piezometer and grouting. Successes prompted proactive preparations, acquiring extra machines and specialized vehicles for upcoming projects, including drilling in Manono for an Australian company. 

How is the demand for Blue Rock's rigs and drilling services evolving, specifically in the context of exploration? 

The signs indicate a promising trend for exploration, particularly in copper, cobalt, and lithium, especially in Zambia. While substantial drilling occurred a decade ago, the current stability in Zambia has garnered attention from major companies. With existing prospects potentially reaching the end of their productive life within the next 10-15 years, there is a renewed interest in exploration. This is indicative of a positive outlook for the exploration sector in the coming years.

Can you delve deeper into the innovative aspects of Blue Rock's equipment, particularly the incorporation of autonomous drills and other advanced technologies?

We have primarily sourced our rigs from Epiroc. However, there is a strategic shift in our procurement plans as we are considering acquiring rigs. While these rigs boast advanced features, including an automatic rod handler, they come at a higher cost. The sophistication and larger scale of these machines necessitate a careful balance between cost considerations, operational efficiency, and the integration of new technology.

In certain regions, we have pioneered horizontal drilling techniques, modifying standard rigs from Epiroc to release water behind the side walls in open pits. This innovative approach aims to enhance stability, reduce sliding, mitigate risks, and ensure safer operations. 

Considering recent political changes, how would you assess the current health of the mining industry in Zambia?

The mining industry in Zambia, while possessing substantial untapped potential with only 50% of the ground explored, has undergone notable changes. The departure of significant players such as Glencore at Mopani and Vedanta has created a void, impacting the revenue generated from copper. However, the recent developments bring a mix of positive and cautious optimism. On the positive side, the impending takeover of these operations by new investors represents a ray of hope. This transition is anticipated to inject much-needed capital for the development of mining operations, potentially revitalizing the industry. However, it is imperative to acknowledge the critical role that funding plays in sustaining and expanding mining activities. Additionally, there is recognition of the necessity for a new and more stable business environment to facilitate increased copper production. This includes addressing infrastructure challenges, such as the need for additional electricity. Promisingly, plans for new hydropower projects are underway, signaling a commitment to overcoming these challenges and fostering industry growth.

Reflecting on Blue Rock's decade-long presence in the DRC, could you provide more insight into the operating environment's evolution and the key changes observed over the past decade?

Upon entering the DRC, we initially collaborated, but we have since established our own company, investing significantly in advanced equipment. We are now a preferred contractor, recognized for our excellence. Adapting to Congo's business environment, we prioritize compliance with government regulations, ensuring smooth operations. Despite upcoming elections causing some concerns, we believe in embracing challenges for growth and have had a trouble-free experience by adhering to all requirements promptly.

Could you outline the key priorities for Blue Rock in 2024?

Looking ahead to 2024, our key priorities revolve around strategic growth and maintaining the high standards that define Blue Rock Mining Services. A pivotal aspect of this growth involves the acquisition of additional cutting-edge machines, further enhancing our operational capabilities. This investment is not only a testament to our commitment to staying technologically advanced but also a practical step in meeting the demands of upcoming projects. However, our growth is not solely tied to machinery. We recognize the importance of skilled personnel in upholding our standards of excellence. While we have undertaken significant training initiatives, the expansion of our operations necessitates the recruitment of experienced supervisors and workers. Our goal is to ensure that our standards and reputation remain unparalleled within the industry. 

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