Admission to AIM & Placing
March 09 2004 - 2:30AM
UK Regulatory
RNS Number:2889W
Gippsland Limited
8 March 2004
9 March 2004
Gippsland Limited commences trading on AIM #0.7 (A$1.7) million placing
Focus on tantalum - tin - feldspar mining in Egypt
BFS scheduled for completion by June 2004
ASX listed Gippsland Limited "Gippsland" or the "Company" (ASX: GIP, AIM: GIP
(Ordinary Shares) & GIPO (Listed Options)), an emerging tantalum-tin-feldspar
producer, commenced trading on AIM today after the Company in conjunction with
UK based broker Hoodless Brennan & Partners Plc, raised #0.7 (A$1.7) million
through the issue of 25 million shares at 2.8 pence (A$0.068) to institutional
and other investors. Grant Thornton is acting as the Company's Nominated
Adviser. Gippsland has a market capitalisation at the admission price on
commencement of trading of #5.3 (A$13) million. Gippsland is the first ASX
listed company to admit to AIM under the "fast track" AIM Designated Market
Rules.
Gippsland has a 50% joint venture with the Egyptian Government on the 40Mt Abu
Dabbab and the 98Mt Nuweibi tantalum deposits located in Egypt. Based on a
scoping study undertaken in March 2003 by international engineering group
Lycopodium Pty Ltd, the 40Mt Abu Dabbab project is anticipated to produce
420,000 pounds of tantalum pentoxide ("Ta2O5"), 1,000 tonnes of tin and 800,000
tonnes of ceramic grade feldspar per year.
The tantalum is expected to be sold by way of long-term contacts with consumers
in Europe, Asia and North America while the feldspar will be delivered to
Europe, North Africa and the Middle East for consumption in the ceramic tile
industry. The tin will be sold direct via the London Metal Exchange or direct to
industrial consumers.
Gippsland has concluded a Heads of Agreement with a major European group for the
off-take of 2.65 million tonnes of feldspar over a 5-year period. The Company
has also executed a Letter of Intent with an Asian company for the off-take of
100,000 pounds of Ta2O5 per year for a period of 5 years. It is currently
negotiating off-take agreements for 320,000 pounds of Ta2O5 per year.
The Lycopodium Abu Dabbab scoping study determined that a 1Mtpa operation would
generate an annual revenue of US$46 million, a NPV of US$127m (discount rate of
6%) and an IRR of 36% in addition to a 40 year mine life.
The Abu Dabbab and Nuweibi deposits are 15km apart and are readily accessible
being located 25km from the western shore of the Red Sea and a national highway.
The projects are located 25km from the Marsa Alam international airport and
approximately 75km from the sea ports of Quseir and Abu Ghusun.
The Company will use the funds raised to finalise the Abu Dabbab bankable
feasibility study which is scheduledfor completion during June 2004. The
project will be afforded tax-free status for the first 20 years of operation.
Speaking today at the AIM admission ceremony Jack Telford, Executive Chairman
said
"The recently executed off-take agreements fortantalum and feldspar together
with Gippsland's admission to AIM will greatly assist the Company in gaining
international recognition for our two world class tantalum resources. We are
progressing well with our Abu Dabbab bankable feasibility study which, based on
a scheduled mill feed-rate of 1 million tonnes per annum, will make us the
world's third largest producer of tantalum. Notwithstanding this, the
possibility exists for the operation to expand to between 1.5Mtpa and 2Mtpa not
long after start-up."
For more information www.gippslandltd.com.au
Jack Telford Bill Sharp
Executive Chairman, Gippsland Limited Hoodless Brennan & Partners Plc
Tel: + 61 (0)8 9389 8611 Tel: + 44 (0)20 7510 8565
jtelford@gippslandltd.com.au bill.sharp@hoodlessbrennan.com
Brian Moritz & Fiona Reid Laurence Read & Leesa Peters
Grant Thornton, UK Conduit PR
Tel; + 44 (0)20 7353 5100 Tel: + 44 (0)20 7936 9095
brian.m.moritz@gtuk.com Mob: + 44 (0)7979 955 923
laurence@conduitpr.com
ADDITIONAL BACKGROUND INFORMATION
Directors
RJ (Jack) Telford, Executive Chairman: Jack, an industrial chemist has 30 years
experience as Chief Executive Officer in high tech industries in both listed and
unlisted entities. He has been involved in the resource sector for some 16 years
in his capacity as CEO.
John Chisholm, Director: John holds a Bachelor of Science with Honours as well
as a PhD. Dr Chisholm has more than 30 years experience in mineral exploration
and international mining project development.
John Kenny, Executive Director: John, practices law with Blakiston & Crabb, the
specialist corporate and resources law firm and specialises in venture capital,
initial public offerings and mergers and acquisitions.
Licences
The Abu Dabbab and Nuweibi mining licences cover 38 square kilometres. The
licences are held by Tantalum Egypt LLC, a company owned 50% by Gippsland and
50% by the Egyptian Company for Mineral Resources (the latter is owned 100% by
the Egyptian Geological Survey and Mining Authority, partof the Egyptian
Government's Ministry for Industry & Technology). The licences, issued by
Ministerial Decree, have a tenure of 30 years plus an automatic extension of 30
years.
Abu Dabbab
This tantalite project is located some 770 kilometres south of Cairo. The
mineralisation occurs as disseminated cassiterite and niobio-tantalite hosted in
a stock of apogranite. The apogranite body extends in an east-west direction
with a maximum length of some 400 metres and a maximum width of nearly 200
metres. The body extends about 130m above the level of the exploration adits and
has been intersected by drilling at a depth of 300m below the adits.
Gippsland's geologists together with consultants Continental Resource Management
Pty Ltd have undertaken an assessment of all the available geological data to
bring the resource into the Australian JORC Code as follows:
Abu Dabbab Summary of Resources (JORC Code)
Category Tonnes Grade Contained Metal
Ta205 Sn Ta205 Sn
Measured 12.00 Mt 274g/t 0.13% 7.247 M lb 15,587 t
Indicated 2.1 Mt 260 g/t 0.16% 1.18 M lb 3,340 t
Inferred 26 Mt 240 g/t 0.06% 13.7 M lb 16,400 t
Total All Categories 39.9 Mt 252 g/t 0.089% 22.1 M lb 35,300 t
Note: minor mismatch in totals due to rounding of tonnes and grade
A preliminary pit study by independent mining engineering consultants John S
Dunlop & Associates has indicated that the deposit can be exploited in full with
a single open pit whilst enjoying an ore to waste ratio of 1:1.2.
Nuweibi
The Nuweibi mining licence of 18 square kilometres was granted to Tantalum Egypt
on 13 September 2003 by Ministerial Decree and has a tenure of 30 years plus a
30 year extension. Like the Abu Dabbab deposit, a detailed assessment of all the
available geological data has been undertaken to bring the Nuweibi resource into
the Australian JORC Code as follows:
Nuweibi Summary of Resources (JORC Code)
Category Tonnes Ta205 Contained Ta205
Indicated 48.1 M 147 g/t 15.9M lb
Inferred 51 M 138 g/t 15.7 M lb
Total All Categories 98.1 M 143 g/t 31.6 M lb
Note: minor mismatch in totals due to rounding of tonnes and grade
Investment Guarantees and Incentives - Taxation
Both the Abu Dabbab and Nuweibi projects will proceed under the umbrella of
Egyptian Law No 8/1997 - Investment Guarantees and Incentives, which was
established specifically to encourage foreign investment in Egypt. Law 8/1997
provides numerous benefits including protection against nationalisation, free
export trade of products, maximum of 5% customs import duty and exemption from a
number of taxes including stamp duty and land tax.
The provisions of Law No. 8/1997 will also enable Tantalum Egypt to enjoy a
20-year exemption from Egyptian profits taxation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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