Rio Tinto has another look at Kintyre deposit PURE SPECULATION Robin Bromby November 18, 2006
HOLD on to your hats over in the west. The word around the uranium industry in Perth is that Rio Tinto has started kicking rocks again at its Kintyre uranium deposit in the Eastern Pilbara region. Files are being dusted off, engineer GRD Minproc is being brought in to do some work, and talks are progressing with the Native Title owners, the Matu people (who want the mine to go ahead, we're told). Rio discovered the deposit in 1985 and the last resource statement put 35,000 tonnes of U308 in the ground there. The Labor Government in Perth will not allow any uranium mines developed in the state, but in 1994 the more co-operative Liberal administration of Richard Court excised the land containing the deposit from the Rudall River National Park. Work stopped at Kintyre in 1997 but there's still a camp with room for 150 people, a pool (empty) and an airstrip.
If Rio decides it wants to mine Kintyre, and BHP Billiton makes a similar decision about its Yeelirrie deposit, the state Government would be faced with some heavy lobbying. Rio would not be spending the money if it thought Kintyre would be locked away forever.
Epsilon interest
PROSPECTOR Mark Creasy is apparently taking a close interest in the new float of Epsilon Energy. Creasy, who made $123 million from the sale of Bronzewing and Jundee gold mines, holds ground prospective for uranium adjoining Epsilon's priority project, Balladonia, which lies east of Norseman. If Epsilon gets its $4 million IPO away easily, as it probably will with uranium projects in four states, Creasy may well launch his own float.
The people behind Epsilon are of especial interest. MD Matt Gauci has two well-known uncles in the mining game - Vince Gauci, who ran MIM, and Tony Palmer, who recently stepped down at Newcrest Mining.
Epsilon's chairman is Bruce Larson, ex Rio. Both Gauci and Larson worked for Rio at Kintyre.
Mulga saga
AND then there's the ongoing saga of another big WA uranium deposit, Mulga Rock, where there's at least 15,000 tonnes of high-grade U308. It was discovered by the Japanese in 1989 but in 2000 was sold on to a private company, Eaglefield Holdings.
About 18 months ago Eaglefield negotiated to sell a 50 per cent stake to listed Bullion Resources. The events following that are now the subject of court proceedings, which revolve around whether a binding agreement was reached. Bullion's new life form, Uranium Equities, argued in court that it was a done deal. The judge is expected to hand down a decision any day.
Meanwhile, Uranium Equities is getting on with life. Two months ago it joined up with Canada's Cameco, the world's biggest uranium producer, to explore tenements in the Northern Territory. This week it signed to earn 80 per cent of the Watson project from InterMet Resources. Watson lies on the Nullarbor Plain, at the western extremity of the Gawler Craton, and drilling there has produced uranium shows.
Rush for iron
GETTING to grips with more than 70 listed uranium companies too much for you? Then best stay clear of the iron ore sector, which is becoming similarly crowded.
And the big battalions are moving into even the smaller players. Sundance Resources came out early in the week with plans to raise $20 million for its project in Cameroon, but within days had to lift that to $30 million to satisfy all the institutions.
It is understood the new $6 million IPO BC Iron was just about killed in the rush when it went around brokers in Sydney and Melbourne this week. Expect that one to be heavily oversubscribed, with some investors being disappointed. BC was put together by Consolidated Minerals and Alkane Exploration, which had adjoining properties in the Pilbara that shared a channel iron formation (Alkane having made its discovery while looking for diamonds). Best feature: the railway (probably) being built by Fortescue Metals Group will run right through the property and Andrew Forrest will be very pleased to have others contributing to the cost of running trains and paying off the line.
One company that doesn't have to worry about building a railway is FerrAus, whose Robertson Range project is a stone's throw (at least by Pilbara standards) from BHP's Jimblebar railhead. FerrAus, which plans to be a producer in 2008, this week released an upgraded resource of 18.4 million tonnes at 58.8 per cent iron ore with plenty of ground yet to be drilled. The junior has been making nice with BHP and should be able to truck its ore to the existing railhead, either selling it there to BHP or doing a third-party rail access deal.
The Weekend Australian implies no recommendations regarding any of the stocks mentioned. The author does not own shares in any of the mentioned securities.
brombyr@theaustralian. com.au
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