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Pathway to Growth
Bruce Robertson, Managing Director
Over the last several months, we’ve achieved significant outcomes for shareholders,
and we’re now building on that base. We’ve had the ‘Eureka’ effect associated with the
release of our resource back in last October, and now we’re climbing the value curve as
we move down the bankable feasibility route.
One of our key objectives for the last financial year just finished was to increase our
existing resource base at the beginning of the financial year of 6.6 million tonnes to
more than double that.
We’ve delivered that for shareholders. We now have a resource base of 25 million
tonnes plus.
Given our market capitalisation at this point in time, that’s an enormous resource base,
and we will use this resource base to build future value for shareholders as we go
through the bankable feasibility stage, the statutory approval process, and all going well
achieve production in the third quarter 2009.
In 12 months time, we expect our company to be re-rated to around $300-400 million
market capitalisation. This reflects what has happened to other companies in a similar
position to us a year or so ago that are now entering the production environment.
Two years out from now, we would anticipate that we would be up around the $500-600
million market capitalisation as we deliver cash flow from Woodlawn.
Five years out from now, we’ve got the potential to be $1.5 billion plus in market
capitalisation as we build on our significant resource base through acquisitions and
further exploration, and also through strategic alliances that we believe exist and that
we can capitalise on for shareholders.
The current status of the bankable feasibility study is such that we are progressing
the metallurgical test work and we’ve made significant gains in that area compared to
what previous operations at the site achieved. Following completion of the bankable
feasibility study, we expect also to have financing in place. Thereafter, with the gaining
of statutory approvals we will be in development mode.
When we look at the Woodlawn Zinc-Copper Projects, it comprises the Woodlawn
Underground Project, which is really our flagship project, and the Woodlawn
Retreatment Project.
In the past, the Woodlawn Underground Project produced copper, lead and zinc
concentrates. We will do the same in the initial developments at Woodlawn, but the
quality of those concentrates should be superior to what was produced in the past.
On the Woodlawn retreatment side, in terms of retreating tailings on the site, we
expect to produce a zinc concentrate, and there’s potential to also produce a
copper concentrate.
Importantly, having the two projects within the Woodlawn Zinc-Copper Projects, we’re
able to look at blending strategies to optimise the marketability of our concentrates.
Also there are economies of scale associated with the project because in effect, we’re
really close to a 2 million tonnes per annum operation given that we end up treating
tailings at 1.5 million tonnes per annum.
So we’re not just a single small underground mine operation. I believe that will give us
significant benefits in the future as well.
I think we’re in very exciting times, and I think with the asset base, the team we have,
and globalisation occurring around us, we’re very well positioned as a company to
realise value.