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Liddell deals with Boyd

THE appetite of Mineral Securities Limited chief Keith Liddell for speculative resource companies seems as strong as ever.

This week the investment banker announced the acquisition of an industrial minerals project in the East Kimberley from Quadrant Iridium Limited, chaired by Michael Boyd, for an undisclosed sum.

The sale by Quadrant follows a public tender program to unload its mining assets as it concentrates efforts on the telecommunication business following the 18 per cent acquisition of US mobile satellite provider, Iridium.

The latest purchase is one of a string of deals struck by Mr Liddell over the past three years. Public companies Sally Malay Mining Limited, West Mus-grave Mining Limited and Avon Resources have all gone to the market with the backing of Mr Liddell’s company.

Two months ago a plan by Mr Liddell to buy into a Chromite deposit owned by Sylvania Resources – to supply his dream to build a Ferro-alloy plant near Port Hedland – was put on hold.

The project had already been significantly watered down in the company’s accounts, al-though millions had been ploughed into identifying and expanding the resource.

The purchase of the Speewah Fluorite project, 260 kilometres north-west of Halls Creek, is expected to earn Mineral Securities around $300 million over 10 years based on a strike price for the flourspar concentrate of between $US110 and $US120 a tonne free-on-board.

The Register of Australian Mining 2001-02 states a resource at March 2000 was 4.5 million tonnes at 22.6 per cent calcium fluorite using a 6 per cent cut-off.

Mr Liddell said the immediate focus would be on expanding the resource to around eight million tonnes, which would give the mine a 10-year life on production of more than 150,000 tonnes per year.

“Having bedded the acquisition down we will be carrying out the financial engineering,” he said.

A feasibility study is expected to take around 12 months to complete and Mr Liddell said indications were that the capital expenditure of the project would sit at approximately $25 million.

“Mineral Securities has al-ready commenced fieldwork in preparation for drilling,” he said.

“We are now raising funds to complete a bankable feasibility study over the next 12 months, and are currently in discussion with a number of parties.

“Whilst a considerable amount of money has been spent on the project to date by previous owners, the feasibility study will cover further drilling to increase the current resource estimate of four million tonnes, open pit mine planning, engineering of plant and infra-structure, and concentrate marketing to raise project debt financing.”

An internal scoping study by Mineral Securities as part of its due diligence into the purchase found that Speewah could operate on robust operating margins with costs in the lowest quartile compared with world producers. The Speewah project is the only explored Flourite project in Australia.

China, Mexico and South America are the largest producers, supplying more than 4.5 million tonnes to Japan, Europe and the US in 2000.

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