Ferret's Stock to Watch: SPHERE INVESTMENTS LIMITED 08:28, Tuesday, 28 June 2005
LOCAL COMPANY IN AFRICAN IRON ORE ADDS GOLD, BASE METALS
Sydney - Tuesday - June 28: (RWE Aust Business News) ****************************************************
OVERVIEW ********
Here is a WA-based company that is always on the lookout for more prospective mineralised areas.
The company is Sphere Investments Ltd (SPH} whose shares have a truly speculative flavour.
In March Sphere reported it had obtained a number of offshore oil and gas exploration licences.
Yesterday Sphere reported it had expanded its resources portfolio in West Africa, adding four gold and base metals exploration licences to its primary Guelb el Aouj iron ore project and other exploration interests in the region.
"The addition of the gold and base metals exploration licences in Mauritania is in line with our objective to develop a strategic portfolio of West African resource projects," Sphere's managing director, Mr Alexander Burns, reported to the Australian Stock Exchange.
"The licences are a good fit with our exploration activities in northern Mauritania," Mr Burns added.
"There have been two significant gold/copper discoveries in Mauritania to date that are both currently undergoing development, Tasiast and Guelb Moghrein.
Given the potential for further discoveries, Sphere commissioned a review (based on newly available data in 2004) which identified gold and base metals targets.
Sphere applied for exploration licences over the areas believed to have the greatest potential.
The new licences lie within the Reguibat Shield in the north, an area, Mr Burns says, is relatively under-explored given the favourable regional geological setting.
The four licences cover a total of 5,881 square kilometres and contain anomalous geochemical results based on previous exploration in the region.
Mauritania already hosts Sphere's flagship Guelb el Aouj iron ore project - currently in the second stage of a three-part bankable feasibility study.
Sphere has completed over 12,000 metres in the current drilling program to establish an Inferred Resource at the East Deposit to compliment the Inferred Resource of 225Mt established for the Centre Deposit late last year.
The latest resource estimation results are due for release in October.
The results of the metallurgical testwork currently underway in Germany on a 2.7t composite sample from the East Deposit, are due to be released in late July.
SHARE PRICE MOVEMENTS *********************
Shares of Sphere yesterday sold at 54c yesterday. Rolling year high for the has been $1.20 and low 14c. There are 52 million shares on issue with a market cap of $28.3 million.
Perth-based Sphere Investments seems to have an exciting future after linking up with some serious business partners in their quest to succeed in a new iron ore pellet and mine project in Mauritania.
Some investors might look askance about its location but Sphere's new partner, Societe Nationale Industrielle et Miniere (SNIM), has been producing iron ore successfully for European steel mills for something like 40 years.
The European Investment Bank, formed to finance European Union projects under the old Treaty of Rome, has just signed a deal with SNIM providing it with finance of 22.5 million euros for the renovation of the Guelbs power station.
Last March Sphere expanded its resources presence in West Africa with its first petroleum interest.
The company has been awarded two onshore petroleum exploration licences in the Republic of Mali in the highly sought after Taoudeni Basin and the Gao Graben (Niger, Chad, Sudan).
The two permits - Block 8 and Block 10 - cover an area of 39,000 and 25,300 square kilometres respectively.
Repsol, Woodside, Total and the China National Petroleum Company each hold two blocks in the Taoudeni Basin in Mauritania.
Max De Vietri's Baraka has also been awarded two blocks in Mauritania and five blocks in Mali.
The award of the blocks represents Sphere's first venture beyond minerals into the oil and gas sector.
"We applied for onshore applications late last year and these are the first two licences to be awarded," Mr Burns declared.
BACKGROUND **********
Sphere Investments (formerly AirBoss Ltd) restructured the company last year to transform itself into an iron ore producer operating anywhere in the world. It has targeted a new iron ore project in Mauritania.
Sphere had a lucky opportunity to set up a joint venture with SNIM, which is an already well-established iron ore miner in its own right, producing 12 million tonnes a year.
It has an excellent name among the European steel producers.
SNIM operates iron ore mines, a heavy haul railway and port facilities in Mauritania.
It is the world's seventh largest iron ore exporter supplying around 12Mt/a to the seaborne traded market.
Sphere and SNIM plan to develop a new iron ore mine, beneficiation plant and pelletising plant to produce high-grade direct reduction (DR) pellets for export, based on the three Guelb el Aouj magnetite deposits.
Under the joint venture agreement, Sphere will earn up to a 50 per cent stake in the project by funding a $US11 million three-stage FS.
The SGA test results form part of the Stage 1 Work Program.
During the December quarter, a JORC compliant resource estimate for the Guelb el Aouj Centre deposit was released.
When a magnetite concentrate is pelletised, oxidation of magnetite (Fe3O4) to hematite (Fe2O3) occurs, releasing significant amounts of heat energy.
SNIM was established in 1978 and is the only iron ore producer in Mauritania and the leading supplier to the major European steel-making groups, competing with Brazil, Sweden and the Canadian mines.
SNIM operates open-cast iron ore mines, including the one at Guelb El Rhein, where the power station project aims to replace old generators which have been operating for 20 years with new sets.
ENDS
SPH Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held