tantalum comment / sgw

FYI . Taken from Mining news.
SALTY

NEW GWALIA CHAIRMAN PREDICTS TANTALUM COMEBACK

LONDON (Metal-Pages) 15-Apr-04. Sons of Gwalia’s newly appointed non-executive
chairman Neil Hamilton.has said that tantalum and not gold could be the key to
company’s the future. Hamilton replaces Peter Lalor who retired this week
alongside his brother and fellow Gwalia founder Chris Lalor after 22 years with
the company.

Hamilton, a lawyer and businessman who is also chairman of Western Power, told
the Kalgoorlie Miner that tantalum was making a come back on the world market
and Sons of Gwalia held big reserves of the rare mineral.

Gwalia, the world’s largest supplier of tantalum, had turned its attention to
the more profitable gold business after a prolonged downturn in the tantalum
market. However, there have already been signs that tantalum is on the turn and,
according to Hamiliton, "Tantalum could be the real star in the Sons of Gwalia
portfolio, it could be the future of the company…In the short to medium term the
outlook (for tantalum) is good."

Since Sons of Gwalia listed on the Australian Stock Exchange in 1983 it has
produced about five million ounces of gold. In the meantime, it has become the
world’s biggest producer of tantalum from mines at Greenbushes in the South West
and Wodgina in the Pilbara, making up about 60% of world supply.

Tantalum’s high melting point and strong resistance to corrosion make it ideal
for use in mobile phones and lap tops. The price of tantalum rocketed at the
turn of the century on the electronics industry boom. Worldwide demand reached a
peak in 2000 but fell by a third in the following two years because of a global
economic slow down.

However, despite the glowing tantalum prediction, Hamilton said the company’s
gold division still remained a core focus. He admitted, though, that some gold
assets in the company needed to be refreshed.

"We will produce about 500,000 ounces of gold this year and will be targeting
the same next year," he said, adding: "Gold has been an important part of this
company for so long." The gold price took a dive earlier this week on the
strengthening US dollar, indicating just how vulnerable any commodity is to a
series of external factors.

Meanwhile, Paterson Securities Kalgoorlie-Boulder based stockbrocker Glen Colgan
yesterday said recent research by his company suggested while demand for
tantalum was improving, contract negotiations expected to be completed in June
would probably not be as fruitful. "With cash costs likely to increase at both
the gold and tantalum divisions, the second half performance is expected to be
weak," Colgan said.