Gippsland focuses on world-scale projects which have been over-looked by major resource groups. Projects which have undergone detailed exploration and which have the potential to be brought into production quickly are a prime target for the Company. Gippsland's success in this area is due in part to the Company's philosophy of entering into equitable joint venture arrangements with overseas nationals. The Company's prime assets are the 40 million tonne Abu Dabbab and the 98 million tonne Nuweibi tantalum-tin projects located in the Central Eastern Desert of Egypt, adjacent to the western shore of the Red Sea.
Gippsland aims high for Egypt tantalum projects
Australian-listed resource company Gippsland (ASX: GIP) holds out big hopes for the Abu Dabbab and Nuweibi tantalum-tin metal-feldspar projects, according to a report to the Australian Securities Exchange.
The company, which also trades on the Frankfurt Deutsche Börse, has a controlling interest in the projects via a 30-year Mining Licences which can be extended for a further 30 years.
Gippsland's two tantalum deposits in Egypt are the 44.5 million tonne Abu Dabbab and the nearby 98 million tonne Nuwebi resource.
Proven and probable Abu Dabbab ore reserves total 30.2 million tonnes.
The Abu Dabbab tantalum-tin-feldspar deposit is located within the Central Eastern Desert in Egypt. The deposit is located about 16km inland from the western shore of the Red Sea.
A Bankable Feasibility Study (BFS) undertaken by Lycopodium Engineering Ltd determined that the Abu Dabbab project has the potential to become a major tantalum supplier to the steadily expanding global tantalum industry.
Based on an initial mill feed estimate of 2mtpa production, operating from a low cost basis, Gippsland would become the world's largest tantalum producer with 650,000 pounds of Ta2O5 production per year. With significant additional revenues generated from production of tin metal and feldspar.
The Company has executed an offtake agreement with the tantalum major HC Starck GmbH of Germany for the sale of 600,000 pounds of tantalum pentoxide per year for a 10 year period.
The BFS estimated gross sales revenue from production in excess of US$630 million over initial 10 years of its estimated 20-year mine life (based upon tantalum and tin sales alone; upside with feldspar).
Tantalum metal powder is an indispensable intermediate for the production of capacitors without which modern cell phones, laptops or flat screens would not be possible.
Tantalum metal is also an essential metal in the production of high temperature applications such as jet engine turbine blades.
The global tantalum Ta2O5 market is estimated to be in the order of 5 - 7 million pounds per annum. Industry commentators suggest that the market is growing at a rate of about 7% per annum.
The company said the Abu Dabbab project was forecast to become the world's largest tantalum mine with an expected mine life in excess of 20 years, while the nearby Nuweibi deposit would extend the project life significantly.
Abu Dabbab has been greatly enhanced by the recent closure of mines in Australia, Africa and Canada.
Gippsland director Jack Telford said the Abu Dabbab project was exceptional in that approximately 80% of all ore mined is expected to be sold, either in the form of tantalum, tin metal or feldspar.
"The contribution of by-products to revenue is expected to ensure the project sets a new global standard for low net cash cost of production for its tantalum products. Shipment of the Abu Dabbab tantalum product will not be constrained by IMO Class 7 (Radioactivity) regulations," Mr Telford said.
"Gippsland directors consider the Abu Dabbab project to be the world's most advanced new tantalum project, which is unique as it has the JORC Code compliant Resource base to sustain long-term, low-cost, non-conflict tantalum production for several decades."
The Abu Dabbab project is designed to produce a high-grade SynCon having a Ta2O3 content in excess of 50%.
The company is presently negotiating with the German government owned KfW Bankengruppe for project finance which is anticipated will be arranged on a most favourable 80% debt and 20% equity basis.
