Gippsland Limited
www.gippslandltd.com
www.gippslandltd.com
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.
Wodgina – A surprise closure by Talison Minerals
Sending shock waves across the industrial world Talison Minerals announced its plans to suspend operations at their 100% owned Wodgina tantalum operation in Western Australia. Wodgina is the world’s largest tantalum operation which supplied over 30 percent of the World’s tantalum demand in 2008.
Timing of suspension is most unfortunate given that it coincides with contract negotiations between Talison and its customers. The industry was bracing for a steep price increase and Talison’s decision to close Wodgina comes as a surprise. The closure leaves much of the western world at the mercy of Chinese tantalum suppliers.
According to Talison, the closure was prompted by a worldwide decline in demand for consumer electronics, resulting in lower demand for tantalum leaving sufficient stockpiles among end-users. The closure was also prompted by the growing tendency by electronics manufacturers to source tantalum requirements from the war torn Democratic Republic of Congo (DRC), which reportedly uses revenue from tantalum sales to fund militias involved in the ongoing civil war in Goma.
Talison’s main customers such as Stark and Cabot do not source their tantalum requirements from the DRC and the closure would place them in considerable difficulty. All tantalum users will now be forced to seek other alternatives such as China, which has so for not been the most reliable tantalum source.
Regardless of the motive, the closure makes the need to develop alternative tantalum sources gain more eloquence. It also makes companies such as Canadian Venture and Frankfurt listed Commerce Resources Corp (TSX.V: CCE, Frankfurt: D7H) and London and Australian listed Gippsland Limited (AIM:GIP, ASX:GIP) interesting investments.
With properties located in close proximity to the key US market, Commerce Resources has all ingredients to be one of the main tantalum suppliers to the market. The company has approximately 29 million tonnes of indicated and 24 million tonnes inferred resources (NI 43-101 compliant).
Commerce Resources is on full throttle in its development endeavours and is unfazed by the market turmoil. Flush with cash from previous financing rounds, a significant exploration and development programme is currently underway at its flagship Upper Fir deposit of its Blue River Tantalum/Niobium Project. As the market continues to seek alternative tantalum suppliers, emerging players such as Commerce Resources would attract investor attention.
Gippsland's prime asset is the 45 million tonne Abu Dabbab tantalum-tin project located in the Central Eastern Desert of Egypt, adjacent to the western shore of the Red Sea. This week Gippsland received a credit guarantee from the German government for United Term Loan. This facility provides German lenders insurance against commercial and political risk, which in turn enables German banks to offer project finance at a reduced interest rate. The German government provides Untied Term Loan guarantees for loans awarded by German lenders to debtors in emerging and developing countries.
Talison’s decision would invariably increase tantalum prices in the market. While it takes only weeks to close mines it takes months to re-open them. May be it is bad news for Talison customers but rising tantalum prices in the face of curtailed supply and start up delays would underpin valuations of tantalum companies such as Commerce Resources and Gippsland Limited.
Timing of suspension is most unfortunate given that it coincides with contract negotiations between Talison and its customers. The industry was bracing for a steep price increase and Talison’s decision to close Wodgina comes as a surprise. The closure leaves much of the western world at the mercy of Chinese tantalum suppliers.
According to Talison, the closure was prompted by a worldwide decline in demand for consumer electronics, resulting in lower demand for tantalum leaving sufficient stockpiles among end-users. The closure was also prompted by the growing tendency by electronics manufacturers to source tantalum requirements from the war torn Democratic Republic of Congo (DRC), which reportedly uses revenue from tantalum sales to fund militias involved in the ongoing civil war in Goma.
Talison’s main customers such as Stark and Cabot do not source their tantalum requirements from the DRC and the closure would place them in considerable difficulty. All tantalum users will now be forced to seek other alternatives such as China, which has so for not been the most reliable tantalum source.
Regardless of the motive, the closure makes the need to develop alternative tantalum sources gain more eloquence. It also makes companies such as Canadian Venture and Frankfurt listed Commerce Resources Corp (TSX.V: CCE, Frankfurt: D7H) and London and Australian listed Gippsland Limited (AIM:GIP, ASX:GIP) interesting investments.
With properties located in close proximity to the key US market, Commerce Resources has all ingredients to be one of the main tantalum suppliers to the market. The company has approximately 29 million tonnes of indicated and 24 million tonnes inferred resources (NI 43-101 compliant).
Commerce Resources is on full throttle in its development endeavours and is unfazed by the market turmoil. Flush with cash from previous financing rounds, a significant exploration and development programme is currently underway at its flagship Upper Fir deposit of its Blue River Tantalum/Niobium Project. As the market continues to seek alternative tantalum suppliers, emerging players such as Commerce Resources would attract investor attention.
Gippsland's prime asset is the 45 million tonne Abu Dabbab tantalum-tin project located in the Central Eastern Desert of Egypt, adjacent to the western shore of the Red Sea. This week Gippsland received a credit guarantee from the German government for United Term Loan. This facility provides German lenders insurance against commercial and political risk, which in turn enables German banks to offer project finance at a reduced interest rate. The German government provides Untied Term Loan guarantees for loans awarded by German lenders to debtors in emerging and developing countries.
Talison’s decision would invariably increase tantalum prices in the market. While it takes only weeks to close mines it takes months to re-open them. May be it is bad news for Talison customers but rising tantalum prices in the face of curtailed supply and start up delays would underpin valuations of tantalum companies such as Commerce Resources and Gippsland Limited.
