eldridge backs finnish venture *****

Interesting read....

http://www.miningnews.net/premiumarea.asp

Eldridge backs Finnish venture



Tuesday, December 06, 2005
TALK about a sea change. Former Portman chief executive, Barry Eldridge has swapped dusty iron ore in Western Australia for copper mining in the Arctic forests of Europe. Report by Stephen Bell

Last month he agreed to become deputy chairman of Vulcan Resources, the Alistair Cowden-managed explorer that has grand plans for its Kylylahti copper project in eastern Finland.

"I've known Alistair Cowden for some time and admire what he's done over the years," Eldridge explained to the Metal Detective.

"He asked me to come onto the Vulcan board and help get their Finland projects off the ground," he added.

Followers of Eldridge should not be surprised at the abrupt change of direction for the mining engineer.

He has been nothing if not versatile over the past three decades, developing gold, nickel, iron ore and coal mining projects, from grass roots to operations.

Eldridge's timing at Portman was perfect. Overcoming an early setback due to concerns about the impact of a mine expansion on a rare flowering bush, he built Portman into Australia's third biggest iron ore miner at a time of soaring prices.

The group was taken over earlier this year by U.S.-based Cleveland Cliffs for $A676 million soon after iron ore miners won a 71.5% hike in prices from Asian steel mills.

Eldridge's 30 year career has also included roles with Griffin Coal, North and Forrestania Gold before and after that company's successful merger with Canada's LionOre International.

Dr Cowden is betting that Eldridge's sense of timing and development nous will rub off on Vulcan, a Perth-based minnow worth just under $A13 million.

After all, Australians in Scandinavia need to put some runs on the board. Aussies have been scratching around in that part of the world for decades. MD can still remember North slogging away at the old Zinkgruvan lead-zinc-silver operation in Sweden during the 1990s.

After taking out North, new owner Rio Tinto eventually flogged the mine last year for $US100 million.

Yes, Dragon Mining is flying the flag for the junior brigade, having started gold production at its Svartliden mine in Sweden.

But in MD's mind, the jury is still out whether Australians can really crack it in the Scandinavian ice, despite endless guff about the region having centuries of mining tradition.

Eldridge is itching to see Kylylahti first hand.

"I'll be there in the next couple of months – probably at the back end of the Finnish winter," he said.

"Intuitively I felt some positive vibes about the project," he said.

"It is not only copper – Vulcan's nickel assets look pretty interesting as well," he said, in a reference to the Kuhmo project.

But with copper prices going through the roof, all eyes are on Kylylahti, discovered in 1984 by Outokumpu and acquired by Vulcan last year from Dragon Mining.

Vulcan says little work was undertaken in the last decade as Outokumpu gradually pulled out of mining to focus on processing technology.

A recent pre-feasibility study envisages a 10-year mine development costing $A134 million and generating net operating cash flow of $A430 million.

A bankable feasibility study is due to finish late next year, after which construction of a processing plant and decline portal could begin.

Eldridge is excited about Kylylahti amid roaring metal prices, but has been around long enough to not get carried way with the marketing froth.

Companies have to take a "long term view on prices" when planning a development such as Kylylahti, he said, which has indicated and inferred resources of 7.4 million tonnes of ore with an equivalent copper grade of 5.2%.

The actual copper grade is 1%, with the additional value generated by cobalt, gold, nickel and zinc by-products.

Mining of the deposit - from approximately 170 metres to 650 metres below surface – will be via a decline with ore treatment in a flotation plant. Local infrastructure includes other operating mines, power at site, a sealed highway within 2km and, air and rail within 20km.

Vulcan will be the first time that Eldridge and Cowden have sat on the same boardroom table.

But the two have known each other since the early 1990s when Eldridge was managing the Kanowna Belle gold mine near Kalgoorlie on behalf of then 50%-owner North Ltd.

At the time, geologist Cowden was working for Delta Gold, which owned the other 50% of the mine.

Scotsman Cowden subsequently found fame as a start-up specialist, responsible for listing Vulcan and other other ASX juniors such as Rox Resources, Australis Aquaculture, Archaean Gold and Magnetic Minerals.

As for Eldridge, he has not paused to smell the roses since stepping down from Portman in April.

Aside from Vulcan, he is chairman of French-Canadian engineering group SNC-Lavalin's Australian unit.

A few months ago he accepted a board position at Cleveland Cliffs Inc., the company that acquired Portman.

But clearly Vulcan is about what Eldridge knows best: building an explorer into a profitable miner that may eventually become a tasty takeover morsel.

In MD's experience, building mines in far-flung places is never easy. It is hard enough to do successfully at home.

But the combination of proven performers Cowden and Eldridge should ensure Vulcan is a stock to watch in coming months.