12/08/2010 - 14:56

Jupiter's $245m manganese buy gets nod

12/08/2010 - 14:56

Bookmark

Save articles for future reference.

Approval to develop the big Tshipi manganese mine in South Africa is expected next quarter, after Jupiter Mines shareholders today approved a $245 million deal to buy into the venture.

Jupiter's $245m manganese buy gets nod

Approval to develop the big Tshipi manganese mine in South Africa is expected next quarter, after Jupiter Mines shareholders today approved a $245 million deal to buy into the venture.

The all-scrip purchase of a 49.9 per cent interest in Tshipi in turn delivers 85 per cent of the WA junior to a high powered international consortium led by former BHP Billiton chief Brian Gilbertson's Pallinghurst Resources.

The Pallinghurst consortium includes Korean steel giant Posco, private miner AMCI Holdings, investment bank Investec and Dutch pension fund APG.

Speaking after today's shareholder vote, Mr Gilbertson said he now expected the $150 million Tshipi mine development to get the green light in a matter of weeks.

"I would be surprised if, in the next couple of months, that didn't happen," he said.

Jupiter would then need to raise $70 million to $100 million by the end of the year to finance its share of the development cost, most likely through a rights issue, Mr Gilbertson said, noting the consortium members would likely cover any shortfall.

Tshipi, 50.1 per cent owned by South Africa's Ntsimbintle Mining, contains over 160 million tonnes of ore averaging 37 per cent manganese. It lies in the heart of the Kalahari Basin, which holds 80 per cent of the world's known manganese reserves.

Mine construction is expected to take 18 months, with the mine slated to produce 2 million tonnes of the valuable steel-making material annually by 2013.

Mr Gilbertson said he had also encouraged Jupiter's WA team to take an aggressive approach to exploration of its Mt Ida iron ore project in the Yilgarn region and Oakover manganese tenements in the Pilbara.

Jupiter is eyeing an initial hematite mine at Mt Ida as a prelude to larger magnetite iron development, based on a target magnetite resource of 1.0 to 1.3 billion tonnes.

Mr Gilbertson has previously described Mt Ida as an "unparalleled opportunity" to enter WA's iron ore sector given its proximity to existing rail infrastructure and the Esperance port.

He also believes Jupiter can take a lead role in convincing other aspiring Yilgarn producers to work together to expand the existing infrastructure.

Jupiter shares closed one cent lower at 27 cents.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options