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Gippsland

  • BY: Andrew Hore |
  • POSTED: 09/04/2008 |

Gippsland remains on course to be the second largest tantalum producer in the world by the beginning of the next decade.

The tantalum projects are in Egypt. Representatives of two German banks, KfW IPEX-Bank GmbH and DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH visited the Abu Dabbab tantalum project in March. This was a due diligence trip. They also visited the Nuweibi deposit. They should completed due diligence by the end of June.

The fesibility study has found that sea water can be used to in the project, which should reduce the project’s costs.

Proven and probable reserves of 14.6m tonnes of tantalum have been identifiedand this should rise to more than 20m tonnes in the near future. The total resource estimate is 40m tonnes.

Gippsland has agreed a 10 year off-take agreement with German tantalum company HC Starck. The agreement covers 600,000 pounds of tantalum peroxide a year, which is more than 90% of expected annual tantalum production of 650,000 pounds.

At the end of December Gippsland had cash of A$3.1m. The cash outflow was A$2.5m in the six months to December 2007.

The capital cost of the project is expected to be US$125m, which is likely to be funded by 80% debt and 20% equity. 

At 4.125p, up 0.25p on the day, Gippsland is valued at £12.4m.

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