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Beacon Hill Resources
- BY: Andrew Hore |
- POSTED: 18/10/2009 |
- COMMENTS: Add yours
Beacon Hill Resources has completed the reverse takeover of Tasmanian Magnesite.
BHR was formerly known as Carnegie Mines and it sold all of its previous interests including the Gambian heavy mineral sands assets.
BHR was looking for a mining operation which is associated with the steel industry and has a project that is near to production. The project needed to be simple and not capital intensive. BHR was looking to start production within two years of acquiring a project.
Tasmanian Magnesite fits these criteria. BHR issued 5bn shares at a nominal price of 0.25p a share in return for the business. The vendors of Tasmanian Magnesite ended up with more than 80% of the enlarged share capital of BHR.
Magnesite is used to produce magnesia, which has one of the highest melting points of all minerals. It is used in the steel industry to line blast furnaces as well as other sectors such as pulp and paper, agriculture and water treatment.
The magnesite deposit is in north west Tasmania and was found in 1925. The initial defined resource 39m tonnes, of which 13m tonnes is JORC compliant. A pre-feasibility study has been completed. The valuation range is A$69m-A$83m (£35m-£42m). BHR is considering building a calcinator which would turn the magnesite into magnesia. This would be done with a joint venture partner.
In the first year, BHR intends to obtain a mining licence, design the mine, sign the joint venture and undertake additional exploration. The following year BHR will construct the mine and calcination plant and then start mining. Mining could commence in the first half of 2011.
BHR will have around £1.7m to invest after raising £1m at the time of the acquisition and £725,000 after the reversal - both fundraisings were at 0.25p a share.
BHR will need to invest between £5m and £10m to develop the project. The final figure depends on whether BHR goes ahead with the calcination plant.
At 0.375p a share, BHR is valued at £21.1m.
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