Claremont, West Australia — MININGREVIEW.COM — 26 November 2008 – Gippsland Limited – an Australian-based international resource company listed on the ASX and the AIM – announced today that the German Inter-ministerial Committee, led by the German Federal Ministry of Economics and Technology, has confirmed the eligibility of the company’s Abu Dabbab tantalum-tin-feldspar project for an untied term loan.
Initial estimates put the cost of the project – which is situated in Egypt – at around US$90 million (just under R1 billion). Gippsland expects a throughput of 2 Mtpa, which will generate in excess of 650 000 lbs of tantalum pentoxide per year. This will deliver 1 530 tpa of tin and 1.5 m tpa of fluorspar over a mine life of 20 years, which would make the company the world’s second-largest producer.
The announcement explains that this German government facility provides German lenders with insurance against commercial and political risk, which in turn enables German banks to offer project finance at reduced interest rates.
The German government supports projects which encourage economic development in emerging and developing countries, and which are of outstanding importance for Germany. These specifically include projects securing German imports of raw materials, oil and gas or contributing to the development of free-market systems, primarily in Eastern European countries.
Gippsland has executed an off-take agreement with German tantalum major HC Starck GmbH for the supply of 600 000 lbs of tantalum pentoxide per year for 10 years, which accounts for 92% of the project’s tantalum capacity. The tantalum pentoxide will be supplied in the form of a high purity synthetic concentrate or SynCon.
The company is confident that the Abu Dabbab project will play a crucial role in supplying the global tantalum industry with a reliable source of tantalum feedstock. Given the project’s initial mill-feed rate of 2 million tonnes per year, the company’s very large resource base of 142.5 million tonnes provides a solid foundation for the stable supply of tantalum to world markets for the next 50 years and beyond. The magnitude of this resource base also provides significant opportunities for increased production.