Ferret's Stock to Watch: UNITED MINERALS CORPORATION NL 09:09, Monday, 16 June 2008
WA MINING EXPLORER FOCUS ON IRON ORE AND BAUXITE
Sydney - Monday - June 16: (RWE Aust Business News) ***************************************************
OVERVIEW ********
United Minerals Corporation NL (ASX:UMC) has transformed itself from a diamond explorer (formerly United Kimberley Diamonds NL) into a diversified mining explorer with iron ore and nickel prospects almost all in Western Australia. It also closely associated Thundelarra Exploration Ltd (ASX:THX) which holds 20.4 million shares, or about 15 per cent, of United Mineral's $133 million capital. This emerged when managing director of Thundelarra, Brett Lambert, told Corporatefile that the stake was not for sale despite a number of approaches. He said his company was not a seller at present. "We are very pleased with the progress reported by UMC on its Pilbara iron ore projects," he said. "A large number of drill holes have been completed at the Railway prospect where UMC is expecting their initial JORC compliant resource by mid year. "Few assays are back at this stage, but a couple of results reported from the first batch a fortnight ago were spectacular. "These results reinforce our view that UMC has excellent prospects for defining an economically significant iron ore resource," Mr Lambert added. Asked how its investment in UMC has performed, Mr Lambert said the value of its UMC holding has increased from $16 million earlier this year to $40 million at present. "Clearly the UMC investment has performed very well, but we think there is potential for more to come once UMC have declared a resource," he said. Meanwhile Thundelarra itself is shortly to become a producer with the first ore production from the Copernicus nickel project. Final permitting has recently been received enabling construction to get underway. Construction began almost immediately after Department of Industry and Resources approval was received in May. The company expects to mine its first ore in September. There should be sufficient ore on the pad to begin processing at the Sally Malay plant in October and Thundelarra hopes to get the first parcel of concentrate on a ship by the end of that month. Copernicus probably represents about 25 per cent of its asset base, however Thundelarra says its importance to the company goes beyond that for two primary reasons - it will elevates the company to producer status which will generally attract a re-rating, and put the company on the list of many potential investors who may not invest in pure explorers. Last week United Minerals produced fresh information about its 100 per cent-owned Pilbara iron ore project in the Yandi headwaters target area. It reported an outcropping channel iron mineralisation discovery six kilometres northeast of the company's Railway prospect in the Pilbara. Geological investigations were carried out in a target area identified on E47/1429 as the potential headwaters to the Yandi channel iron deposits. The Yandi channel iron deposits, 30 kilometres to the east, form major iron ore production centres for both BHPB (Yandi) and Rio Tinto. These two centres are producing over 80 million tonnes per annum collectively of high-grade iron ore from resources exceeding two billion tonnes of channel iron deposit (CID). CIDs are exciting exploration targets with large tonnage and production potential. Reconnaissance work has outlined a 20 square kilometre target area for initial drill testing. Field mapping and sampling is underway to select initial drill targets.
SHARE PRICE MOVEMENTS *********************
Shares of United Minerals on Friday dipped 9c to $1.88. Rolling high of the is $2.09 and low 38c. The company has 133 million shares with a market cap of $250.3 million. Back in May, the company reported high grade drill results over significant widths. Assay results are now being received on a progressive basis from the 110-hole Phase One drilling program at the Railway prospect. Twenty one holes have been received, and the results form the basis for the ongoing inferred JORC resource calculation currently underway. Whilst it is not the company's policy to release progressive individual results in a drill-out program, two particular drill hole results,(the best in the program so far), are regarded to be particularly noteworthy and material. Drill holes UI 257 and UI 221, 160 metres apart on Section Line 673275mE and central to the drill out zone, have given the following results. * Drill Hole UI 257: 79m grading 60.5pc Fe (from 45m to 124m). The hole ended in high grade material grading 65.6pc Fe (probable micro platy hematite) and requires deepening to test the full extent of mineralisation; and * Drill Hole UI 221: 57m grading 63.1pc Fe (from 52 to 109m). Both holes show very low levels of all impurities, typical of high-grade Marra Mamba ores. Drill hole UI 257 is located 200m east of drill hole UI 034 which returned assays of 36m grading 63.2pc Fe from 41m. Drill hole UI 221 is located 200m east of drill hole UI 035 which returned 20m of 61.1pc Fe. The company is excited by these results and believe they are very positive for the potential of the prospect. Receipt of full assay results from the Phase One drilling program should provide the company with sufficient information to enable an inferred JORC compliant resource to be calculated by July. In Phase Two infill drilling on a 100m by 80m grid has now commenced. It was estimated that about 50 holes for 5,000m of RC drilling will be required for this phase. Meanwhile United Minerals signed up with Norsk Hydro over its Kimberley bauxite/alumina project to create a potential bauxite mine and alumina refinery. Norsk Hydro is one of the world's largest integrated aluminium producers with a market capitalisation of about $US41 billion, and is owned 43 per cent by the Norwegian Government. Hydro Aluminium has established an excellent record in Australia's aluminium industry through its smelter operations in the Hunter region of NSW, where it owns and operates the 170,000tpa aluminium smelter at Kurri Kurri and is a joint venture partner in the Tomago smelter.
BACKGROUND **********
United Minerals Corporation NL was re-listed on December 9, 2004. It is an exploration company with the projects located in Western Australia. The company added iron ore and bauxite to its diamond exploration interests and consequently changed its name in November 2006. United Minerals focus is on exploring and developing high-value bulk commodities being iron ore in the central Pilbara mining district of WA, bauxite in the Kimberley region which is 25 per cent-owned in joint venture with Norsk Hydro. Previous resource was estimated as 19Mt @ 62.8pc Fe, using 60pc cut off at the Camp Hill prospect and 100Mt @ 60pc Fe at Fork North. Part of the previously explored land now falls onto the BHP Billiton ground. The company is in the process of mapping and sampling, as well as drilling. ENDS
UMC Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Held
