sappes progress, page-2

India - no immediate radioactive hot spot.

Barry Fitzgerald
November 21, 2011

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IT IS a source of amusement to many in the mining industry that economists would have you believe that the two-speed economy that the resources investment boom has created is a bad thing.

More often than not, a miner will point to an economic basket case like Greece and ask the question, is it not better to be ''suffering'' the distortions of a two-speed economy than having to deal with a no-speed economy?

The funny thing is that mining is one area that Greece can turn to in its effort to begin paying its way in the world.

After many years of frustrating miners with uncertainty on permitting new mines, the Greeks have all of a sudden got a whole lot more friendly. Canada's European Goldfields found that back in July when it secured all-important environmental clearance for the development of both its Olympias (4.1 million ounces) and Skouries (3.9 million ounces) gold projects.

But today's interest is the plan of ASX-listed Glory Resources (ASX: GLY). It struck a deal with Tony Sage's Cape Lambert (ASX: CFE) to acquire the Sapes gold project in north-eastern Greece for $46.5 million in cash and shares back in August.

Cape Lambert picked up Sapes as part of its $135 million acquisition of the collapsed CopperCo back in June 2009. It's turned out to be a nice acquisition too, with Cape Lambert pulling in $250 million from selling off bits and pieces of the old firm.

Glory - which endeared itself to Sage by adopting a name that his Perth soccer club also goes by - is now raising a minimum of $42.5 million from the issue of 170 million shares at 25¢ each to fund the Sapes acquisition.

Its task goes a whole easier with the news that another Canadian company keen on Greece's gold potential, the $C10 billion Eldorado Gold, has put its hand up as a cornerstone investor for 19.9 per cent of Glory. Eldorado is waiting on environmental clearance for its Perama Hill project, 20 kilometres from Sapes.

Glory is hopeful it will secure the required permits for Sapes in time to meet a 2014 start-to-production target. Because of CopperCo's previous ownership, and that by other former notable Australian companies over the years, Sapes is well known in this market.

Its initial 510,000 recoverable ounces of gold at an average grade of 15 grams a tonne tells you that if it was anywhere but Greece, it would have been in production a long time ago. But, as noted earlier, Greece is no longer in a position where $100 million investments like that required to get Sapes into production can be left on the shelf.

Glory has been making its way as a platinum/copper/nickel explorer in Canada ahead of the Sapes deal.

The Canadian play is worth watching as a second phase of drilling is about to start at the Onion Lake tenements. But it is Sapes that is the near-term game-changer, with Glory to boast attractive resource/reserve/production multiples compared with other ASX-listed gold stocks - on Sapes being developed, that is.

http://www.smh.com.au/business/india-no-immediate-radioactive-hot-spot-20111120-1npb7.html