Proactiveinvestors Australia


Astra Resources continues on global acquisition trail, reveals corporate strategy for future growth

Wednesday, November 23, 2011 by Proactive Investors

Astra’s business model is focused on mining and related opportunities, with exposure to iron ore, gold and thermal and coking coal - along with iron ore sands in the Philippines.

Astra’s business model is focused on mining and related opportunities, with exposure to iron ore, gold and thermal and coking coal - along with iron ore sands in the Philippines.

Diversified mining company Astra Resources PLC (Code: 9AR), which is the UK parent company of Astra Mining, has outlined the company's corporate growth strategy for the market.
Astra’s business model is focused on mining and related opportunities, along with technology opportunities including T-Steel, which provide the company with the potential to grow within the resources sector on an international scale.
The company's current interests include direct involvement in the extraction of iron ore, gold and thermal and coking coal, as well as risk management strategies including secondary mining opportunities and mining services housing.

Astra's plan includes pursuing mining projects which are logistically close to market, are licensed or within 12 months of operation, require no major infrastructure infusion, and are in known resource areas and open-cut operations.
Jaydeep Biswas, chief executive officer, added:

“We have established a number of primary mining opportunities for iron ore in India and iron ore sands in the Philippines, both which will provide benefits through supply to the market and for our own needs.
“The recent granting of trading licenses covering the main iron ore producing regions in India will allow Astra to trade and transport self-mined and third party mined iron ore to Paradip Port for export from our own storage and shipping site."
Astra has also signed a memorandum of understanding for an iron sands development in the North East Philippines with the Cagayan River Construction & Development to establish a joint venture entity, which will manage and put to use the iron sands deposits in the Cagayan River Delta.
Gold interests have recently received a boost with a favourable report from the company’s geologist confirming that the Ratanakiri licence area in North East Cambodia has the potential to host an Intrusion Related Gold System - that may be developed into a significant open cut low cost gold mine.  
Intrusion Related Gold Systems have only been recognised in the last decade and have been shown to host some of the largest recently discovered gold deposits, with many similar systems typically hosting between one and three million ounces of gold.
Silvana De Cianni, managing director, added that the company’s opportunities in coal in Nigeria provide the potential to secure the joint venture development for a thermal coal exploration license.
“Nigeria is struggling to meet the growing nation’s energy requirements using electrical power, resulting in a renewed focus on alternative energy sources.
“As Nigeria has major underexplored and underexploited high quality coal resources, the Nigerian government is focusing on developing coal-fired power plants and in turn revitalizing the coal mining industry.
“The coal present in the district and surrounds of our license area is low in sulphur and ash, and high in calorific value making it ideal for power generation and export into the international market. This project creates a beach-head for growth in a region which has the potential of 800 million tonnes of thermal coal.”

Risk management strategy in place

Astra has developed a risk management strategy to underpin its primary mining activities with the provision of mining services housing, with an agreement in place with Dubai based facility management company, Janayen, which will include the development of Astra’s  land holdings in Rockhampton, Queensland.
Technology, spearheaded by T-Steel, forms the second major part of Astra’s corporate strategy.
T-Steel is a technology that enables existing steel factories to produce steel with improved physical characteristics such as higher tensile strength, better machine ability and higher fatigue limits at a lower cost.

Biswas said that the development of T-Steel dates back to the late 1970’s where the applications were entrusted to a number of senior metallurgists and engineers in the then DAM Steel Works in Hungary.
“During initial development, which was carried out on a ‘no cost spared’ basis, the general directive was that the quality of the steel had to be equal to or better than what was manufactured in the United States and Germany.
“Astra owns a substantial interest in the Intellectual Property pertaining to this technology, has retained full management and control of the technology and retains a number of the experts involved in the original research and development.”
Astra recently increased its shareholding in the technology to 45% ownership. The valuation model estimates the global commercialisation of T-Steel technology has an NPV of €4.47 billion, assuming that the risk level of the project is in line with the industry average.

Green initiatives

A number of secondary opportunities under Astra’s technology platform are carbon efficiencies, green technologies and coal conversion.
Astra is acquiring 76% of Carbony Pty Ltd, the technology company that owns the intellectual property for a carbon dioxide reduction technology that separates the carbon dioxide and sulphur dioxide emissions produced by the combustion of carbon-containing matter.

The main targeted market for the carbon dioxide reduction technology is the heavy industries where the carbon credits and carbon trading arrangements over the next ten years may force a major crisis in terms of taxes and operating and consumer costs.
Astra’s green technology project is Green Gum Technologies, a patented process that is able to produce fine rubber granules of 200 and 300 microns and superfine granules of 180 microns to 150 microns with a small carbon footprint and the ability to provide carbon credits.
The need for rubber granules in road building and road maintenance alone is expected to be in excess of 35,000 tonnes per year over the next five years with considerable use of the product throughout Europe.
De Cianni added that while both the carbon dioxide reduction and green technologies are well advanced as part of Astra’s corporate strategy, the inclusion of coal conversion to the technology table was something the company was aggressively pursuing.
“The purpose of our coal conversion strategy is to develop the technology to allow the use of local low quality coal reserves for power generation in high demand countries.
“Because of their quality these identified coal reserves cannot be used directly for power generation or use as coking coal.
“The technology will however help to develop these reserves to reduce the reliance and costs for high demand countries to import increasing amounts of coal from other producers.”

In other Astra news - reporting requirements met

In other Astra news, the company has continued to meet financial reporting requirements through the signing off of an unqualified audit report by its auditors for its 100% owned subsidiary, Astra Mining Ltd.
The audit report for the year ending 30 June 2011 of Astra Mining Ltd is important as it was this entity which was recently rolled up into the parent entity, Astra Resources PLC (including all of its Australian and international subsidiaries) prior to the listing of Astra Resources on the Frankfurt Stock Exchange.
Biswas said that the company’s unqualified audit report complies with International Financial Reporting Standards and confirms complete compliance with the Australian Corporations Act 2001.
“The financial statements and notes, as set out in the report, are in accordance with the requirements of the Corporations Act and comply with all appropriate accounting standards.
“As stated in the financial statements, the report on Astra constitutes explicit and unreserved compliance with IFRS and gives a true and fair view of the financial position of the consolidated group as at 30 June 2011.”


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