part 1 NEW board with a new focus has breathed new life into...

part 1
NEW board with a new focus has breathed new life into this Perth-based junior - RESOURCESTOCKS*



It is not unusual for people, after suffering a near-death experience, to go on to achieve great success. They emerge with a brand-new attitude and a totally new way of approaching life's challenges that makes them almost invincible.

On June 26, 2006, Western Metals emerged from what it described as a period of "very difficult times" to one of optimism with a bright future ahead.

The company appointed George Bauk as managing director, Geoff Chapman as executive director and Peter Smith as chairman, giving it a solid base of skill and experience upon which to grow.

The new strategy for Western Metals was to develop a collection of carefully selected projects that would increase shareholder value as the company maintained a high professional standard of corporate governance and sound business practice.

"We jumped at the opportunity to come onto the board to take advantage of the buoyant market and build a portfolio of sound projects that would give this ailing patient the kiss of life," Bauk told RESOURCESTOCKS.

"We had our option on uranium tenements in Tanzania as our core asset as well as the Queen Hill Tin Project in Tasmania which, given that the price for tin was at a paltry $US7800 at the time, was not quite considered to be our best asset.

"From there we had a look at what we were going to do to really build a company.

"We had $3 million in the bank, so we decided our first task should be to go and have a look at our tenements in Tanzania in order to understand the asset and what we were going to do with it."

Western Metals has a farm-in agreement with London-based Uranium Resources for the Mtonya, Ruhuhu and Makutapora projects in Tanzania. Under the farm-in agreement Western Metals will earn 40% after spending $2 million and can earn 60% by spending a total of $4 million. The project is managed and funded by Western Metals.

Using the principle of triage, the Mtonya Project rose to the top to receive most of Western Metals' attention. Previous exploration on the Mtonya area during the 1970s and 1980s comprised United Nations sponsored broad-scale regional mapping and airborne radiometric and magnetic surveys using 1km-spaced flight lines. Although the airborne surveys did identify anomalies over the tenement area ground-based field testing was not conducted.

When Western Metals got on the ground at Mtonya it followed up the key anomalies that came out of that original testing and was thrilled to find that analysis of 150 samples collected at surface and in trenches returned a large number of high-grade results over 0.1% uranium, including one of over 6% at the Henri prospect. The mapping, trenching results and detailed radiometrics conducted over the Henri anomaly identified it as a roll front style uranium mineralisation prospect.

"We started to understand the geology, including a better understanding of the strike length of the system and the potential for multiple mineralised zones. The results have yielded ready-to-drill targets, and that is really exciting," Bauk added.

It was those positive results that motivated Western Metals to expand their holdings in southern Tanzania by signing joint venture agreements on several large tenement blocks in the highly prospective Karoo Basin, host to the Paladin Kayelekera deposit.

"To start work in August and be able to triple our landholdings and have a drilling program mapped out by the following January [planned for May/June 2007] – that is a fantastic start to life," Bauk continued.

"For us this is a really important initial drilling program – while we are presently getting an understanding on the surface, this program will give us information and data at depth.

"What we start to see from those early drill results will drive the ongoing exploration program. It must be noted that we have only covered a very small proportion of the total exploration area of 13,000 square kilometres in Tanzania.

"We will have down-hole radiometric data available in real time during our drilling program. If we are getting favourable outcomes, we have the money available now to keep the drill rig there and continue the program."

Another project to benefit from the attention of the new Western Metals is its 60% joint venture with Gippsland Limited at the Queen Hill tin prospect in Tasmania. This project was originally evaluated by Aberfoyle and was part of the old Western Metals portfolio.

Queen Hill is part of the Zeehan Tin Project located in Australia's major tin province in the northwest of Tasmania. When the new board took control this project contained an estimated resource but was struggling, mainly due to the low price of tin at the time. Since then tin has increased in value by 75%, which means the project is now likely to have a positive net present value and the company is now receiving interest in Queen Hill from several sources.

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