The Hindu Businessline, 10 June 2003, Ambarish Mukherjee :
MR Charles Devenish first visited India as a young boy during the fifties. Since then, he has travelled around the world to continents such as Australia, Africa and America. During this period, he has also established himself as a successful gold miner.
Mr Devenish came back to India last year and started the country’s first and largest listed gold exploration company – Deccan Gold Mines Ltd (DGML). In an exclusive interview to Business Line, Mr Devenish, Chairman of Deccan Gold Mines Ltd, explains his plans. Excerpts:
What prompted you to come to India in search of gold?
The whole world is open for business today and there are actually better countries than India in terms of better corporate governance, greater security, less sovereign risk. There are places in the world today that are more investor-friendly than India. Legislations are better there and so, there is more encouragement for investment.
There are several reasons like till now, India is only partially explored, the country has a very large pool of under-exploited geological and technical expertise, with the people sitting and doing nothing, with world-class potential, a sophisticated and undervalued stock market and an enormous pool of middle-class Indians, who spent around $7 billion last year on gold.
These people, in my opinion, could become investors in the stock exchange. These people have never been recognised by the Indian investment community or may be, they were not being handled properly. I think they were abused through the dotcoms and so on. So, I think there is a huge capital market in India untouched. And, I believe, this capital market will become involved in the mining industry in future.
What is the basis of your thinking?
I can take Australia and Canada’s examples. Their stock exchanges are the basis for the mining industry. India has the stock exchanges; it has millions of small investors. We did not have such a large number of small investors. Still, we have got our mining industry going. You have got millions of small investors. So, your potential for mining industry is great.
You said that India has a very sophisticated but undervalued stock market. Can you please elaborate?
If you look at some of the stocks that are on the exchanges, if you compare in a western sense, these stocks are undervalued. There seems to be lot of good stocks here that are languishing. We acquired a company at a fraction of a price it would have cost us in Australia. So, I am just saying that there is an opportunity that is probably not being fully recognised.
What activities are currently being undertaken by your company?
At this stage, we are drilling at the north of Hutti Gold Mines and this is a very exciting project.
It is, we believe, an extension of the offshoot of the Hutti gold mine. If you look at mines in Australia, in case of big mines like Hutti, normally on sides, you get more mines. So, it is just not one mine. We feel confident and think there is a very good chance we might find another mine and we would like to mention that we think that there is a big chance.
You must note that we are not saying we have a mine. We do not want the Indian public to think that we have found something until we declare categorically that we have a mine. This is very important. The facts must be reported correctly and not half facts because this industry is a high-risk one in the exploration stage and there is many a slip between the cup and the lip.
In terms of prospecting, this would rank as one of the best in my experience. This would be a top project from a prospecting point of view. And we are working in conjunction with the Geological Survey of India (GSI). They have two drilling rigs operating at the moment and we have two drilling rigs operating there. So, we are happy to say that the GSI has done a very good job and they should get a pat for doing good work. We would like to think they are going to be our partners in the future – may not be in a financial sense but in sharing knowledge and information.
Why do you think Indian investors will turn to mining, as according to you it is high-risk?
Why do people invest. You are buying into the possibility of something much bigger happening. So, you are gambling on the anticipation of a major discovery. I am personally gambling on anticipation. If I am successful, I’ll make a lot of money. If I am not, I lose a lot of money.
What is the basis of your anticipation that there is a gold mine?
It is based on a lot of geophysical work. We do a lot of trenching and we’ve been picking up all the indications. We have done a lot of sampling there and now, we are drilling.
What is the outcome of the past two years of work and how long do you think will it take to figure out whether your anticipations are correct?
We have got very exiting results. We know that gold exists here in reasonable quantities. What we do not know is whether it is going to be economically feasible.
How do you know that there is gold?
From our findings. We have also done spot tests.
What are the other countries where you have found gold?
My company and its investors invest in mining all over the world. I have operated in Zimbabwe, Venezuela and in Vietnam. In India, all the group companies together are working over an area of around 34,000 sq.km. out of which Deccan Gold is working over an area of around a thousand sq km.
What is your opinion about the Indian mining industry as a whole?
It has got enormous potential. As I have said earlier, you have a very good pool of manpower and you have the minerals here and you also have the capital.
If you manage these together, you will have a very successful mining industry. You have a successful diamond industry, a successful software industry. So, why not have a successful mining industry?
You have mentioned that legislations in some other countries are more investor-friendly. What sort of legislations you feel India may have to make to be more favourable for the mining industry?
I think its mining Act has to be rewritten. It needs a completely new mining Act. It is very important to have a proper one. If you look at Australia, there are different mining Acts for different States.
You have a central mining Act, the same Act is applicable for the whole country.