The Australian Investor Magazine cover story on Gondwana last night...
"Gondwana Resources to Leverage off the Expertise of its Team to Maximise the Potential Value of its High Quality Prospects to Enable the Company to Capitalise on the Strong Gold Price
Over the past year, Gondwana Resources Limited has established a significant exploration presence in both the Yilgarn and Pilbara regions of Western Australia, with a portfolio of granted tenements and applications covering approximately 150 sq km of Archaean greenstones near Southern Cross and approximately 1,500 sq km of Archaean greenstones between Marble Bar and Nullagine in the East Pilbara. As a result, the Company is strategically positioned in areas that host a large proportion of the world’s gold, iron and base metal mineralisation.
Following a major restructuring of its exploration portfolio in 2008 and the success of 2008 exploration programs, the Company aims to investigate the feasibility of gold mining operations at Buffalo-Spring Hill which would allow the Company to advance its gold prospects elsewhere at Parker Range and iron prospect in the Pilbara.
In line with this focus, Gondwana has announced a non-renounceable one-for-one Entitlement Offer to Shareholders on the Record Date (4th of December) of approximately 73,533,480 New Shares at an issue price of 1 cent each (with one free New Option for every New Share taken up, exercisable at 1 cent by 31 May 2009) to raise up to approximately $735,335.
Upon the valid exercise of a New Option, in addition to being issued a Share, the holder will be issued with one “Piggy-back Option” exercisable at 1 cent each of 30 June 2011. The anticipated closing date of this offer is set for the 23rd of December.
Mr. Warren Beckwith, Gondwana’s Chairman informed the Australian Investor, “Our primary objective is to move towards gold production at Parker Range, which would sustain the Company in the near to medium term and to use this production as a spring board to further explore the quality prospects in gold, nickel, iron ore and copper within this region.”
Continued drilling at Parker Range of the areas around old workings has led to the definition of significant gold mineralisation at Buffalo and Spring Hill.
“The primary use of the funds raised from this rights issue will be used to advance our prefeasibility studies for these two prospects over the next six months,” Mr. Beckwith explained to the Australian Investor, “We are targeting 40,000 to 60,000 ounces gold suitable for toll treatment or heap leach operations.”
As a follow on to these activities, Gondwana will continue to explore its East Pilbara tenements that are prospective for gold, base metals and iron occurrences, focusing initially on the Corunna Downs iron prospect, discovered in 2008, which has the potential to be a significant DSO hematite producer.
The Company entered into an exploration joint venture with Cazaly Iron Pty Ltd in 2007 to support the evaluation of iron resources at Mt. Caudan.
In the past year, Cazaly has completed over 7,000 m of RC and diamond drilling at Mt. Caudan to examine the DSO (direct shipping ore) potential along a 2.6km length of weathered BIF. Thus far, Cazaly has defined a DSO iron resource of 15.5Mt @ 57.5% Fe.
In the East Pilbara, 2008 fieldwork identified DSO iron potential at Corunna Downs. A detailed gravity survey in October 2008 has resolved areas for further rock chip sampling and shallow RC drilling during the 2009 field season, commencing April/May.
“Our aim is to continue exploration on the Corunna Downs prospect with the aim of proving sufficient direct shipping ore that can be exploited when market conditions for iron ore stabilise,” Mr. Beckwith told the Australian Investor.
Subject to the availability of capital, the Directors’ immediate strategy is to: complete open pit mining studies and Buffalo-Spring Hill; prioritise and drill additional gold prospects at Parker Range; drill-test the Corunna Downs Iron and Comet East Gold-Copper prospects; and commence exploration for high-grade nickel sulfide exploration at Parker Range.
Though the timing of this non-renounceable rights issue coincides with an unprecedented disruption of global financial markets and growing concern about the economic outlook, Gondwana has a number of important attributes that will help the Company overcome these challenges.
“The two main drivers for Gondwana include our high quality group of tenement holdings in areas renowned for their mineral occurrences and our extensively experienced and keen team of geologists and specialists, led by David Burton and Grant Donnes, who have achieved a great deal of success in the last twelve months,” Mr. Beckwith noted.
Another positive development that strengthens the Company’s future outlook is that the Australian dollar gold price has weakened, meaning that the outlook for Australian gold producers has dramatically improved and providing a price cushion to encourage iron ore explorers such as Gondwana.
“This means we won’t be suffering as much as a result of recent falls in commodity prices,” Mr. Beckwith informed the Australian Investor, “Additionally, we believe the overall, long-term outlook for the Australian resources sector - particularly iron ore – remains encouraging.”
This sector is being driven by the Chinese economy and with the stimulus measures recently announced by the Government of China, Gondwana believes that it appears likely this economy will underpin and sustain reasonable demand for Australian iron ore and other materials for the foreseeable future.
Mr. Beckwith concluded, “We are optimistic about the future outlook for Gondwana and intend to continue to leverage off the expertise of our team to maximise the potential value represented in our high quality prospects to enable us to capitalise on the strong gold prices and possible rebound in other commodities.”
December 2008 "
The web link
http://www.australianinvestor.com.au/magazine.aspx?id=3172
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