Two strategic acquisitions during the year will play the major role in Consolidated Minerals Ltd’s growth over the next two to three years – the takeover of Reliance Mining Ltd and an initial 20 per cent stake in Jabiru Metals Ltd, expected to significantly increase in the next few months.
While manganese and chromite were ConsMins’ foundations, emerging nickel, zinc and copper production are its near future.
The company is targeting a nickel resource worth more than $A2 billion at Reliance’s expanding Beta Hunt and East Alpha projects near Kambalda, which is expected to lift ConsMins’ nickel concentrate production from the current 5,000 tonnes a year to 25,000t/year in two to three years, managing director Michael Kiernan told WA Business News.
The company has committed $45 million to fast track exploration and development of the East Alpha ore body via twin declines from nearby Beta Hunt, where third quarter 2006 production is expected to take output to 10,000t/year.
The proposed $50 million second phase will extend the twin declines south to push production to 25,000t/year.
A decision on building a $20 million nickel concentrator, instead of using WMC Resources’ facilities and probably with a partner, is expected in the first half of next year.
Jabiru Metals’ $56 million Jaguar zinc/copper project, near Leonora, is scheduled for production in early 2007.
With zinc and copper prices at record highs, the project involves a decline development to produce between 20,000 and 25,000t of zinc in concentrate a year, between 8,000 and 10,000t/year of copper and 800,000 ounces of silver a year over five years.
A bankable feasibility study has predicted $101 million in earnings before interest and tax, with zinc cash operating costs among the cheapest in the world.
A $7.5 million exploration program, aimed at doubling the current 1.6 million tonnes ore reserve, will be carried out over the next 18 months before production begins. Zinc and copper off-take agreements are in place.
ConsMins’ Mindy Mindy iron ore deposit, 60 kilometres north-west of BHP Billiton’s big Mt Newman mine and a 50/50 joint venture with Fortescue Metals Group, is scheduled for production in 2008, but completely dependent on infrastructure requirements.
At Woodie Woodie, in the Pilbara, a recent $6.5 million expansion lifted production to one million tonnes a year, while chromite ore production from Coobina, near Newman, was lifted to 250,000t/year.
