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http://www.minesite.com/storyFull5.php?storySeq=3107


Haddington Resources And AI Minerals

Struggle To Get Share Of Limelight.

By Our Man In Oz Date: November 09, 2005

Out of sight, out of mind. That’s been the common problem for two of Australia’s forgotten explorer/miners which are showing the first signs of re-emerging as companies worthy of more than a passing reference. Haddington Resources and A1 Minerals have rated barely a mention in the Australian or British media this year, or for much of 2004. That seems likely to change as Haddington restores interest in tantalum, a metal with high-tech applications which has also been suffering from a recent dose of invisibility. A1 has a much easier story to tell, gold, or more specifically, a decision to start a pre-feasibility study into mining its promising Brightstar project near Laverton in central Western Australia.

With Haddington it is a case of a company doing everything other than actually declaring its intention to bid for the tantalum assets of the failed Sons of Gwalia. In a series of developments which started in late August, Perth-based Haddington announced an expanded exploration effort, followed in September by a modest profit (A$1.2 million) from its existing tantalum operations, and then in October the formation of a joint venture with two much bigger mining companies as the start of the push to become a world-class tantalum producer. Haddington’s partners in the Tantalum Exploration Alliance are the Japanese trading house, Mitsubishi, and Australia’s leading zinc miner, Zinifex.

Their plan is to accelerate exploration around Haddington’s newly acquired tenements in the Northern Territory, but not at the existing Bald Hill mine which is being operated under a licence agreement with the administrator of Sons of Gwalia. More significantly, the trio appear to be keen to buy Sons of Gwalia’s assets, which constitute the world’s biggest tantalum mine at Greenbushes in the south-west of WA. Formal statements from the partners go to great pains to avoid saying that this is what their joint venture is all about, but it’s not even necessary to read between the lines to get the drift, especially when the first paragraph of the statement announcing the JV said, in part, that the alliance will explore and look for “the acquisition of other tantalum mining and marketing businesses” – to which a reasonable man might ask how many of them are there in Australia, getting an answer of, approximately, one.

The market, which has been ignoring Haddington since it listed in early 2001, largely because it was seen as a junior player in the tantalum business, and because tantalum itself was passing through an unsexy phase, has taken a recent liking to the stock. Since October 7, the last trading day before the Mitsubishi/Zinifex deal was announced the stock has risen from A23 cents to recent trades at A34 cents, with a brief peak at A41 cents. There are three keys to the next upward move, and they are (a) the price of tantalum rising sharply, which is possible as demand continues to increase for the metal in the mobile telephone and electronic gizmo market, (b) the administrator of Sons of Gwalia decides he really ought to retire and sell the last plum in the pudding, or © Haddington is recognised as a truly independent tantalum player when its licence agreement with Sons of Gwalia expires on March 31 next year.

Meanwhile, over at A1 it is a far simpler situation that revolves the question of whether the company has enough gold to start mining next year. Chief executive, John Williams, is in no doubt. He told Minesite that that resource at Brightstar currently stood at 311,000 ounces “but, we expect it to get a lot bigger”. His confidence is built on two factors; location and grade. In terms of the address, Brightstar could hardly be better located, about 30 kilometres from the 10 million ounces Sunrise Dam mine of AngloGold and 20 kms from the 7million ozs Granny Smith mine of Placer Dome. In terms of grade, the initial resource estimate is 2.34 million tonnes of material assaying 4.1 grams a tonne – good by the standards of some Australian mines where low-grades can tolerate highly-mechanised, open-pit, mining (or vice versa! Ed.).

Williams said another key to Brightstar was the potential to find more gold at depth, with drilling continuing, and the grade appearing to be increasing at both the Alpha and Beta deposits which constitute the greater Brightstar project. “It is important to emphasise that there is significant upside potential from further drilling, with the deposits remaining open and increasing strongly in grade at depth,” he said. To underline this point, Williams said the initial resource estimate comprised 148,640oz of gold at 3.35g/t in the zone above 100 metres, and 100,730oz at 10.3g/t in the deeper resource which had been tested so far.

After some excitement in early 2004 when the stock soared from A23 cents to A85 cents in a matter of weeks, A1 has spent much of 2005 below A30 cents. However, last month it traded up to A36 cents as chatter started about A1 wanting to make a fast start on mining, possibly by toll treating its ore through one of the nearby plants, or by building its own mill. At its latest price of A30 cents, A1 remains a true tiddler with a market capitalisation of less than A$10 million, a status which might change should it evolve soon from explorer to miner.