Mineral sands find a bonus for Diatreme
Article from: The Advertiser
CAMERON ENGLAND, CHIEF BUSINESS REPORTER
June 09, 2008 11:30pm
DIATREME Resources will start drilling in the Arckaringa Basin this year in its quest to open up a new minerals sands precinct.
The Queensland company pegged exploration licences over parts of the basin near Coober Pedy, on the basis of digital imagery which indicated possible mineralised areas.
But in a piece of exploration serendipity, it happened across soil from previous oil drilling in the area which contained marine sands - indicative of mineral sands potential.
The samples were discovered when the company was examining access roads in the area as a precursor to drilling.
The company has also added the Anabama copper exploration project in eastern South Australia to its exploration suite over the past year.
The company's flagship assets, however, are the Hurricane and Cyclone mineral sands deposits in the Western Australian section off the Eucla Basin, and the Willy Willy mineral sands project in western South Australia.
Managing director Tony Fawdon said the company had a resource worth $1.4 billion in the ground at Cyclone (60 million tonnes of 3.1 per cent heavy mineral sands) which it expected to grow by at least 50 per cent this year.
"We are determined to get Cyclone to the feasibility stage in 2009 . . . and hope to double or treble the resource this year,'' Mr Fawdon said.
In a bid to prove-up resources at the Willy Willy prospect, the company was building its own drilling rig and was "fully planning to build another two rigs''.
Mr Fawdon said the company could save $400,000-$1 million a year by running its own rigs.
The company had already established a site at Ceduna where it would be doing sample preparation before sending them to be assayed.
The company was planning to drill 73,500m across four projects this year, with a total exploration spend of $8 million. In South Australia it would be drilling 20,000m in the Eucla Basin and 10,000m in the Arckaringa Basin.
Diatreme shares closed at 19c on Friday, up 0.5c. The company's market capitalisation is currently $27.5 million and the company has $8 in cash.
Heavy mineral sands typically contain zircon, used in ceramics and paint pigments, rutile and ilmenite.
Other mineral sands projects in SA include Iluka Resources' recently-approved $420 million mine, also in the Eucla Basin near Ceduna.
That mine was expected to create 250 jobs during construction and 120 for its 10-year mine life, starting in early 2010.
Adelaide company Australia Zircon was mining mineral sands at Mindarie in the state's east. That mine shipped its first concentrates in January.
Mineral sands tend to collect along ancient shorelines, with weather activity across long periods of time concentrating the heavy sands in bands.
Double current SP seems conservative, but time will tell.
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