Article from: Font size:DecreaseIncreaseEmail article:EmailPrint article:PrintSubmit comment:Submit comment MEREDITH BOOTH October 20, 2009 10:30am
QUEENSLAND explorer Diatreme Resources is targeting SA in its bid to become a billion-dollar producer of mineral sands by 2014.
The company already is the second biggest player, behind Iluka, in the Eucla Basin on the Western Australian and South Australia border, and has most of its mineral sands exploration projects in the state.
Diatreme upgraded its resource estimate at the Cyclone project in the Eucla Basin last month to 98.4 million tonnes at 2.9 per cent heavy minerals, worth at least $1 billion on current zircon, titanium and rutile prices.
Diatreme, which had a market value of $23.4 million yesterday, also hopes to begin further drilling in its western tenements in the Arckaringa Basin near Coober Pedy to open up a new minerals sands precinct.
Executive chairman Tony Fawdon expected demand for zircon - used in ceramics, paint and metal products - to peak between about 2012 and 2014 as some operations closed and demand from China, now 40 per cent of a $10 billion market, grows.
"I think the Eucla Basin in 10 to 20 years will become the major producer of zircon in the world and significant amounts of titanium,'' Mr Fawdon said.
"We expect a shortage of zircon by 2012-2014 and that's when we'll be coming on stream.''
The company's pre-feasibility study for Cyclone would be completed by mid-2010 with feasibility and bankable studies in 2012-13 to develop a mine.
Benefits for SA included Ceduna being considered as a port for shipping options, where it already has up to 25 people working in a heavy mineral sands laboratory.
Mr Fawdon expects about $8 million to be spent on exploration this year: $5 million on mineral sands, $2 million on metals and its Anabama copper exploration project in eastern South Australia and $1 million in administration costs.
Heavy mineral sands typically contain zircon, used in ceramics and paint pigments, rutile and ilmenite.
Other SA mineral sands projects are seeing mixed results. Iluka Resources' $420 million mine on the SA side of the Eucla Basin is expected to be commissioned next month, creating 120 jobs over its 10-year life.
But Adelaide-based Australian Zircon has mothballed the Mindarie mineral sands operation in the state's east and called in administrators as it seeks to recapitalise through a possible rights issue early next year.
Diatreme Resources shares were down 1c to 12c yeste
DRX Price at posting:
12.0¢ Sentiment: Hold Disclosure: Held
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