From: Biniam Haile \(SWE\) (eritrea.lave@comhem.se)
Date: Thu Sep 25 2008 - 10:43:23 EDT
Abu Dabbab Project On Track
09-24-2008 | Source: Project Finance
Gippsland's $125 million Abu Dabbab tantalum-tin project in Egypt is
unlikely to be adversely affected by market turmoil, the company has
announced. The Australian miner is in talks with KfW about securing
project financing on an 80:20 debt-equity split, and is nearing
completion of legal due diligence.
The 44.5 million tonne project, which is 50% owned by the Egyptian
government via the Egyptian Mineral Resources Authority (EMRA), is
underpinned by a 10-year offtake agreement with HC Starck for the supply
of six million pounds of tantalum pentoxide.
The offtake agreement prices are confidential, however based upon spot
prices at the time of the agreement (November 2007) the project is
expected to generate tantalum pentoxide revenue in excess of $280
million over the initial 10-year period of operations.
In addition to tantalum pentoxide, the Abu Dabbab project will produce
around 1,530 tonnes of tin metal per annum which will be sold on the
open market or via the London Metal Exchange.
The anticipatedgross sales revenue for the project is around $630
million over the first 10 years of its estimated 20-year mine life based
upon tantalum and tin sales alone without including the upside of
feldspar.
Negotiations with engineering groups for the EPCM contract have been
ongoing during the past three months. An EPCM contract is expected to be
signed by the end of October 2008.
In other news, Gippsland is confident that its 100% subsidiary, Nubian
Resources, will be awarded three prospecting licences in the northern
part of Eritrea. The applications are in the same structural corridor as
Sub-Sahara Resources' Zara project that contains in excess of 1Moz of
gold at a grade of 6.31g/t. The tenements are expected to be granted
during October 2008.
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