Excerpt from Paydirt Gippsland Ltd article September 2008:
Jack Telford says------------
We will come onto the market in a very big
way (once we start producing) because we will
be the second largest producer of tantalum
globally," he said.
While that might be enough for many companies
Telford said Gippsland had no intention
of resting on its laurels and was targeting
the number one position of world's tantalum
producer.
"We certainly don't plan to stay there (second).
If we plan well, we could certainly become
the largest producer of tantalum.
"We have enough resource to expand and
take ourselves to first position."
Telford said the company was getting more
and more inquiries about additional supplies
and it was looking "more and more evident"
that the company would ramp Lrp to 3 mtpa
sooner rather than later.
Among myriad small delays, which can be
expected with any project, there has been
the need to navigate through the sometimes
labyrinthine Egyptian bureaucracy and the unfortunate
timing of off-take partner HC Starck
GmbH changing hands, virtually as the deal
was on the verge of completion.
Though the agreement with Starck, for aLmost
all tantalum production for the flrst 10
years of project life is now in place, the delay
caused by the takeover has added nearly two
years to the process turning Gippsland from
explorer to producer.
There is no doubt in Telford's mind, however,
that the wait will have been worth it.
As well as tantalum, the 44.5mt resource
grades at 0.09% tin. lt also contains feldspar,
a by-product of the tantalum and tin extraction
process.
The extraction of the feldspar, used in high
quality ceramics, is scheduled for stage two of
the project.
"Treatment cost of the feldspar - which we
virtually get for nothing anyway, because it's a
waste product of the milling process - is about
$US5s/t and at a conservative estimate we
could sell it on a FOB (Free on Board) basis for
about $U520-25/t.
"We have the capacity to produce up to
1.5mt of Feldspar, so that adds $US22 million
plus to the bottom line each year
"The revenues from feldspar are extraordinary
because they mean the whole project
ends up having only 20% waste.'
The company will also benefit from its negotiation
of a project specific free-trade zone, by
which Gippsland will pay no tax, no sales tax
and no import duty.
Other advantages include minimal infrastructure
costs: No need for rail access as
major highways are within a few kilometes,
international airports are also close by and
port access at a choice of locations is virtually
guaranteed.
Finance for the project (capex is expected
to be a little over $US125 million) is being provided
by German banks, which have negotiated
an 80% debt-2o% equity arrangement-a
"brilliant result for the shareholders".
Also in its favour is the structure of the mineralisation,
which will result in very little in-pit
grade control being required once mining is
underway.
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