benambra mine in east gippsland

http://www.news.com.au/heraldsun/story/0,21985,21458921-664,00.html

Jabiru wins mine licenceMandi Zonneveldt

March 28, 2007 12:00am


THE controversial Benambra mine in East Gippsland could be re-opened after a fierce battle for exploration rights over the area.

Zinc junior Jabiru Metals looks set to take control of the former mine, which closed in 1998 leaving the Victorian Government with a $6.9 million clean-up bill.
Plummeting commodity prices sent Benambra's former owner Denehurst into administration, but the boom in metals meant there was stiff competition for the exploration licence.

Thirteen companies submitted bids to explore for zinc and copper in the area, with the Government yesterday declaring Jabiru the victor.

Shares in the Perth-based zinc junior were placed in a trading halt following the announcement, but the stock is likely to soar as a result of the win.

The government has estimated there could be resources worth as much as $US2 billion ($A2.5 billion) in the ground around the old mine.

Benambra was discovered by WMC in 1978, and was mined for six years until Denehurst was placed in the hands of administrators.

Austminex acquired an option over the project in 1999, but abandoned it due to the continuing decline in zinc and copper prices, leaving the Government to clean up equipment and potentially hazardous waste materials left by Denehurst.

Jabiru will be given the rights to explore the area after completing native title negotiations and is likely to be forced to lodge an environmental bond before proceeding with any new development.

It may also be required to process ore off-site if its exploration efforts are successful.

Jabiru is expecting production from its first mine later this year, with projected cash flows of more than $100 million annually.

The company's shares last traded at $1.125.