Alara Resources Ltd (ASX:AUQ) is set to benefit from moves by the Oman government to prioritise the development of the mining industry.
Alara recently completed an infill drilling program for Al Hadeetha Copper-Gold Project in Oman, with additional high grade copper and gold mineralisation being identified on top of existing mineral resources at the Washihi deposit.
Overall, the environment bodes well for Alara’s plans to develop the low cost copper-gold Washihi resource.
Moves were made earlier in the year by Omani sovereign wealth funds to further develop the mining industry through the establishment of the A$200 million Mining Development Oman entity.
A meeting with Oman’s Public Authority of Mining is scheduled for the last week of August and is a key step towards the award of the Washihi mining licence.
Oman supporting mining
Oman is currently experiencing some extraordinary events with the government promoting and prioritising development of the mining industry.
Mining Development Oman has been capitalised with A$200 million and plans to raise a further A$130 million through IPO on Oman’s stock exchange before the end of the year.
Late last year the Public Authority for Mining in Oman submitted a draft of the new mining law for approval by relevant ministries.
The new law is expected to help attract investment to develop the mining sector into a major contributor to the country’s gross domestic product.
The mining sector is also preparing for an international mining and minerals conference, to be held in Muscat in January.
Background
Alara has a portfolio of projects in the Middle East and was focused on an infill drilling program during the June quarter at the 70% owned Al Hadeetha Copper-Gold Projects in Oman.
The company has completed an advanced scoping study on both the Daris and Al Hadeetha Copper-Gold Project in Oman.
Most recently it completed a feasibility study for the Washihi deposit within the Al Hadeetha project.
The company has completed a definitive feasibility study on the Khnaiguiyah Zinc-Copper Project in Saudi Arabia, which is the subject of legal proceedings.
The company is transitioning to establish itself as a base and precious metals mine development and production company.
Al Hadeetha Copper-Gold Project: Washihi
The Washihi JORC Resource estimates have been updated to comply with the 2012 code and are now being revised to incorporate the results of the recent drill program.
The current Washihi resource contains 14.1 million tonnes at 0.80% copper and 0.18 g/t gold.
Washihi’s Indicated Resource can be converted into a Reserve only after a mining licence is issued.
The Washihi mining licence application was first submitted in April 2013.
Since that time it has passed through various government authorities and the local community representatives to obtain ‘no objection’ status.
The upcoming presentation to the Public Authority for Mining has been arranged through the company’s joint venture partners and is a key step towards award of the mining licence.
Project management proposals to bring Washihi into operation are currently being assessed with contract awards expected in the last quarter of the year.
Analysis
The continued evidence from Oman’s government to invest into the development of its mining industry is a positive sign for Alara given how advanced their project is and the commodities it hosts.
The Al Hadeetha Copper-Gold Project is the most advanced copper project in the country, in terms of time to production.
The project also contains the country’s single largest JORC copper resource.
The joint venture company Al Hadeetha Resources LLC developing the project is set to be a significant player in the development of Oman’s copper industry.
Demand for copper in Oman continues to grow with new copper tube manufacturing scheduled to start up in mid-2018.
The company is continually being presented with additional opportunities, including mineral projects in the Middle East, Africa, US and elsewhere.
While these opportunities are being considered on their merits, management is keeping its main focus on existing projects.
A revised JORC resource statement incorporating the recent infill drilling program which discovered additional high grade copper and gold mineralisation on top of the existing resource is expected within one month.
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