Deal to give Coburn 20 years more Kevin Andrusiak July 02, 2007
JUNIOR minerals sands miner Gunson Resources is set to announce offtake and financing arrangements with a Chinese partner - and this will lead to full-scale mining at the company's Coburn mineral sands project. Gunson is expected to reveal this month the results of a definitive feasibility study for Coburn and in parallel with that, is expected to detail the Chinese partnership arrangement.
The financing would provide a backbone for Gunson to advance Coburn, which could produce 38,000 tonnes of zircon a year, for a 20-year mine life.
Coburn covers 1200sqkm of fossil coastline in the West Australian mid-west.
It would be somewhat of a leap of faith by the Chinese investors, given the rising availability of cheap concentrate from Indonesia.
"They will be taking a long-term view of the company," Gunson managing director David Harley said. "They can see past the short-term infatuation with Indonesia."
Zircon has not taken off like its metal cousins on the rapid industrialisation of China and India, lagging copper, nickel and uranium especially.
Mr Harley said this made it more difficult to finance zircon projects, but a long-term view of zircon demand, in particular for the ceramics industry, was still healthy.
"It's hard to say when the zircon prices will turn around," he said.
"But a 20-year mine life is really what the Chinese are interested in."
GUN Price at posting:
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