bhp buying up big in the outback...., page-6

From The Advertiser, July 9

BHP Billiton on Outback buying spree in South Australia

BHP Billiton has staked its claim to a vast slice of the Outback, the world's biggest miner now poised to find more Olympic Dam-sized deposits.
It wants to explore a huge, 300km-long arc of South Australian land from north of Lake Torrens south towards Hawker and Port Augusta.

The claim, plus $24 million worth of exploration rights BHP has bought from smaller companies over the past few months, represents a major shift in thinking for the miner.

Last year, it had exploration rights to 2658sq km of land. It now wants rights to 22,806sq km - an area a third of the size of Tasmania.

SA Chamber of Mines and Energy chief executive Jason Kuchel said the claim shows BHP's commitment to a long-term future.

"If you take exploration tenements then you have to spend money. It's a requirement of the licence," he said.

"So this speaks to their confidence in the likelihood of making more very significant discoveries in that area."

The move comes as BHP's SA team fine tunes the proposal it will take to the company board on the expansion of the Olympic Dam copper, gold and uranium mine.

BHP has until December 15 to commit to the project or face the indenture agreement going back into Parliament.

While bipartisan support would ensure its passage, clauses such as the 45-year guarantee on fixed royalty rates could be reopened.

Despite speculation about delays to Olympic Dam, BHP has made no decision or published a cost on the project, estimated by analysts at about $30 billion.

Advance work on the Olympic Dam project continues with the third shipment of Caterpillar mining trucks offloaded from the vessel Carmen on Saturday.

Because BHP is such a big company it has not had to tell the stock exchange about the exploration push because it would not be deemed financially material to its share price.

However, the four smaller companies from which it made acquisitions - Minotaur Exploration, Tasman Resources, Archer Exploration and Copper Range - made stock exchange announcements because the transactions were significant for them.

The claims made under BHP's name - 12 tenements totalling 10,590sq km - are on the public record though not announced by the Government or BHP.

Asked to comment, BHP said the company was "making a relatively low-cost investment in a potential future option".

"We believe there is potential for additional iron oxide, copper, gold discoveries in the Stuart Shelf region of Australia and in the context of our long-term development plans and strategy for Olympic Dam this makes BHP Billiton well placed to develop any future mines in the area."

The Stuart Shelf is a region inside the Gawler Craton geological province which covers much of SA. Rich deposits of mixed copper, gold, silver, uranium and iron are known to be buried in the region - including Olympic Dam, Prominent Hill, Carrapateena and others.

SA Mineral Resources and Energy Minister Tom Koutsantonis welcomed BHP's increasing interest as a sign major players were optimistic about more big finds.

"BHP Billiton, along with other major resource companies including Rio Tinto, have recently shown their faith in the prospectivity of this part of SA by securing exploration rights," The minimum annual expenditure required by government on an exploration licence is not publicly revealed.

However, industry sources say the minimum is usually about $100,000 per tenement a year for three to five years.

BHP now wants 40 tenements, so it would need to spend at least $4 million a year if the average applied.


Read more: http://www.news.com.au/business/companies/bhp-billiton-on-outback-buying-spree-in-south-australia/story-fnda1bsz-1226422062223#ixzz20H5hLgRW