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Gindalbie lines up targets

GINDALBIE Gold is one company confident it will not be swallowed up by the wave of rationalisation in the gold industry.

Experienced in small but profitable joint venture gold production and ahead of schedule to commission a production plant for its Minjar gold project by the end of the year, Gindalbie is smiling at its ground and human resource acquisitions in the most western greenstone belt in Western Australia.

Ready to begin mining by the end of the month, Gindalbie is confident the Minjar production will generate sufficient cash flow for the company to proceed with further regional exploration without having to rely on market support.

The project, 350 kilometres north-east of Perth and purchased in late 1999, has five open pits on granted mining leases and 140,000 ounces of gold.

While these reserves previously were considered uneconomic, the new on-site 500,000 tonnes-per-annum plant has produced an independent evaluator’s prediction of a $10 million initial cash flow.

And with a further 800 square kilometres of what it deems “highly prospective” tenements, Gindalbie is expecting the project to have a life of at least 10 years.

Exploration success has been reported at three surrounding prospects, with one, the Winddine well, indicating potential for an underground operation in addition to its open-pit reserves.

Gindalbie managing director David McSweeney believes capital savings already achieved by the company, and the type and experience of people Gindalbie has gathered, also will ensure the success of the Minjar venture.

The plant under construction at Minjar was purchased from another operation and power, water and an airstrip will be shared with Normandy Group’s Golden Grove zinc operation.

Half of Gindalbie’s management personnel have between 20 and 30 years of management experience in the WA goldfields.

The company’s mine manager is based centrally at Yalgoo, its exploration manager is an expert in developing greenstone regions and key operating staff

have come directly from similar-sized gold mines in the region.

While Gindalbie was the first in the east Kimberley to bid initially for the Sally Malay nickel deposit – and holds a nearby joint venture interest with BHP – the company is selling its non-Minjar interests after deciding an exclusive Minjar production and acquisition focus is the key to ensuring its future.

One joint venture, within Minjar and 51 per cent owned by Gindalbie, could make use of and complement the Minjar operations.

This is a gold and tungsten deposit at Mount Mulgine, for which Gindalbie is evaluating the tungsten prospects and the interest of concentrate buyers.

China currently supplies 85 per cent of the world tungsten market, after a Western world shut-down in production, but with an increase in demand for tungsten, rather than depleted uranium, for metal hardening, and for the manufacture of ‘green’, rather than lead bullets, prices have soared from $44 to $70 per tonne.

Depending on its assessments, Gindalbie will decide whether to proceed with production – using excess capacity at the Minjar plant and funding the operations with company cash or further capital raising – or to spin off the asset.

“It’s a world-class in-ground resource worth hundreds of millions of dollars,” Mr McSweeney says.

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