Eastern Europe the new field of dreams Barry FitzGerald September 19, 2011
THE mining boom means that competition for prospective ground is tighter than ever. Add in soaring labour costs and the increasing difficulty explorers experience in passing through native title and environmental clearance hoops, and it is a wonder that anyone explores here at all. There is an alternative - go overseas. That's just what an ever-increasing band of ASX-listed explorers have been doing in recent years. The Australian industry's presence across Africa, and to a lesser extent south-east Asia and Latin America, reflects just how tough the competition here has become. The next exodus could well be to eastern Europe. Apart from there being much less competition there for prospective ground, an operator at a mine over there driving a truck or working in the treatment plant thinks himself lucky if he gets take-home pay of $500 a month. Compare that to the Pilbara and the Queensland coal fields where a broom pusher can score a pay packet of $6000 a month. Good luck to them, too. Working as much as two weeks on before having a week off is a job description that can convince most people that there is more to life than money. But back to eastern Europe where the race to live like the rest of us is on in earnest. And when it comes to opportunities waiting for some Aussie know-how in exploration and mining, the place is ripe for the picking. A little Perth-based thing called Sultan Corporation (ASX: SSC) found that out during the week when it struck a deal to pick up an exploration project in south-west Poland, hard up gainst the world-class copper mining operations of the 30 per cent state-owned KGHM.
Sultan's Bogdan exploration project covers an area of 42 square kilometres. Despite its location near the KGHM operations and their current annual copper output of more than 500,000 tonnes, the Bogdan tenements have seen precious little exploration - one hole in fact. The previous owner was more interested in its coal potential. But the single hole that was drilled did punch through the coal seam to hit some promising KGHM-type mineralisation from about 300 metres depth. It is early days but expect Sultan to be moving quickly to firstly twin that hole and then to punch in some more to confirm that Bogdan is worth pursuing. What is known as this stage is that Bogdan has been picked up for a song compared to what would have been required had it been sitting in Australia. Bogdan follows Sultan's earlier eastern Europe push with the acquisition of the Monty polymetallic deposit in Montenegro, again at a knockdown price and in a country where the corporate tax rate is all of 9 per cent. Expect more moves by the company into eastern Europe. Sultan last traded at the princely price of 1.9? a share. It has 1.73 billion shares on issue, so its market cap is not as small as you might think at $33 million
SSC Price at posting:
1.9¢ Sentiment: Buy Disclosure: Held
