ferret's stock to watch: sphere investments ltd

Ferret's Stock to Watch: SPHERE INVESTMENTS LIMITED
08:28, Tuesday, 28 June 2005

LOCAL COMPANY IN AFRICAN IRON ORE ADDS GOLD, BASE METALS

Sydney - Tuesday - June 28: (RWE Aust Business News)
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OVERVIEW
********

Here is a WA-based company that is always on the lookout for more
prospective mineralised areas.

The company is Sphere Investments Ltd (SPH} whose shares have a
truly speculative flavour.

In March Sphere reported it had obtained a number of offshore oil
and gas exploration licences.

Yesterday Sphere reported it had expanded its resources portfolio
in West Africa, adding four gold and base metals exploration licences to
its primary Guelb el Aouj iron ore project and other exploration
interests in the region.

"The addition of the gold and base metals exploration licences in
Mauritania is in line with our objective to develop a strategic portfolio
of West African resource projects," Sphere's managing director, Mr
Alexander Burns, reported to the Australian Stock Exchange.

"The licences are a good fit with our exploration activities in
northern Mauritania," Mr Burns added.

"There have been two significant gold/copper discoveries in
Mauritania to date that are both currently undergoing development,
Tasiast and Guelb Moghrein.

Given the potential for further discoveries, Sphere commissioned
a review (based on newly available data in 2004) which identified gold
and base metals targets.

Sphere applied for exploration licences over the areas believed
to have the greatest potential.

The new licences lie within the Reguibat Shield in the north, an
area, Mr Burns says, is relatively under-explored given the favourable
regional geological setting.

The four licences cover a total of 5,881 square kilometres and
contain anomalous geochemical results based on previous exploration in
the region.

Mauritania already hosts Sphere's flagship Guelb el Aouj iron ore
project - currently in the second stage of a three-part bankable
feasibility study.

Sphere has completed over 12,000 metres in the current drilling
program to establish an Inferred Resource at the East Deposit to
compliment the Inferred Resource of 225Mt established for the Centre
Deposit late last year.

The latest resource estimation results are due for release in
October.

The results of the metallurgical testwork currently underway in
Germany on a 2.7t composite sample from the East Deposit, are due to be
released in late July.

SHARE PRICE MOVEMENTS
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Shares of Sphere yesterday sold at 54c yesterday. Rolling year
high for the has been $1.20 and low 14c. There are 52 million shares on
issue with a market cap of $28.3 million.

Perth-based Sphere Investments seems to have an exciting future
after linking up with some serious business partners in their quest to
succeed in a new iron ore pellet and mine project in Mauritania.

Some investors might look askance about its location but Sphere's
new partner, Societe Nationale Industrielle et Miniere (SNIM), has been
producing iron ore successfully for European steel mills for something
like 40 years.

The European Investment Bank, formed to finance European Union
projects under the old Treaty of Rome, has just signed a deal with SNIM
providing it with finance of 22.5 million euros for the renovation of the
Guelbs power station.

Last March Sphere expanded its resources presence in West Africa
with its first petroleum interest.

The company has been awarded two onshore petroleum exploration
licences in the Republic of Mali in the highly sought after Taoudeni
Basin and the Gao Graben (Niger, Chad, Sudan).

The two permits - Block 8 and Block 10 - cover an area of 39,000
and 25,300 square kilometres respectively.

Repsol, Woodside, Total and the China National Petroleum Company
each hold two blocks in the Taoudeni Basin in Mauritania.

Max De Vietri's Baraka has also been awarded two blocks in
Mauritania and five blocks in Mali.

The award of the blocks represents Sphere's first venture beyond
minerals into the oil and gas sector.

"We applied for onshore applications late last year and these are
the first two licences to be awarded," Mr Burns declared.

BACKGROUND
**********

Sphere Investments (formerly AirBoss Ltd) restructured the
company last year to transform itself into an iron ore producer operating
anywhere in the world. It has targeted a new iron ore project in
Mauritania.

Sphere had a lucky opportunity to set up a joint venture with
SNIM, which is an already well-established iron ore miner in its own
right, producing 12 million tonnes a year.

It has an excellent name among the European steel producers.

SNIM operates iron ore mines, a heavy haul railway and port
facilities in Mauritania.

It is the world's seventh largest iron ore exporter supplying
around 12Mt/a to the seaborne traded market.

Sphere and SNIM plan to develop a new iron ore mine,
beneficiation plant and pelletising plant to produce high-grade direct
reduction (DR) pellets for export, based on the three Guelb el Aouj
magnetite deposits.

Under the joint venture agreement, Sphere will earn up to a 50
per cent stake in the project by funding a $US11 million three-stage FS.

The SGA test results form part of the Stage 1 Work Program.

During the December quarter, a JORC compliant resource estimate
for the Guelb el Aouj Centre deposit was released.

When a magnetite concentrate is pelletised, oxidation of
magnetite (Fe3O4) to hematite (Fe2O3) occurs, releasing significant
amounts of heat energy.

SNIM was established in 1978 and is the only iron ore producer in
Mauritania and the leading supplier to the major European steel-making
groups, competing with Brazil, Sweden and the Canadian mines.

SNIM operates open-cast iron ore mines, including the one at
Guelb El Rhein, where the power station project aims to replace old
generators which have been operating for 20 years with new sets.

ENDS