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Straits looks to bumper year
May 5, 2005 - 2:14PM


Junior diversified mining company Straits Resources Ltd expects earnings to soar this year with ongoing improvements in its coal division and newly established copper and gold operations.

Straits has returned to copper production in its own right with the opening of the Whim Creek mine near Karratha in Western Australia earlier this week.

It also has a 26 per cent stake in Tritton Resources Ltd, which shipped the first product from its namesake mine in NSW in March.

"The opening of Whim Creek ... takes the company back to its roots and puts us firmly back into a business where we belong - the production of copper cathode," chairman Garry Lowder told Straits annual general meeting.

"The opening ... is also very well timed as it is happening when copper prices are at near record levels, levels that should enable the mine to perform well over the next few years and make a healthy contribution to your company's earnings."

Whim Creek is forecast to produce 10,000 tonnes of high-grade copper this year, building up to 17,000 tonnes in 2006.

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AdvertisementDevelopment of the mine was underwritten by a strong performance at Straits' Sebuku open cut colliery in Indonesia, which has underpinned the company's bottom line since the $90 million sale of its Nifty copper mine in 2003.

Straits took 100 per cent ownership of Sebuku earlier this year, and with production forecast to increase to three million tonnes and increased coal prices it expects even better results in 2005.

The third leg of Straits' operational plan will be put in place with the opening of the Mt Muro gold mine in Indonesia mid-year.

Initial production is forecast at 80,000 to 100,000 ounces of gold a year at cash costs of around $US200 an ounce.

Straits recently completed its acquisition of the remaining 30 per cent minority interest in Mt Muro from Harmony Gold's Aurora Gold Ltd.

The group has another two projects in the pipeline - the Hillgrove gold and antimony mine in NSW, where it is now considering the feasibility of re-opening the operation using existing infrastructure, and a solar salt project in WA, recently named Yannarie.

An environmental impact statement is due to be completed on Yannarie in the September quarter, followed by the start of construction in 2006 and first harvest and sales at an initial three million tonnes a year by 2008.

Straits shares were two cents higher at $1.64 by 1306 AEST.