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Oilex treading the boards

THE chase for oil, with the price hovering at historical highs, continues this month with yet another Western Australian company seeking a public listing on the Australian Stock Exchange.

Oilex NL, brought together with the financial might and expertise of Metex Resources Limited, is hoping to raise $3 million through its public offer of 15 million 20 cent shares for 50 per cent of the issued capital.

If successful, around one third or $1.16 million will be allocated to exploration within the first two years.

The balance of the funds raised will be used, among other things, to purchase exploration assets in the Giligulgul North-1 and Rookwood South-1 wells in Queensland, to repay $95,000 to Metex Resources as well as covering the $300,000 capital raising costs.

Oilex NL was originally founded as a wholly-owned subsidiary of Metex Resources with initial funding of approximately $100,000 to enable Oilex to acquire options over the Queensland oil permits and information held by Rolmaster Pty Ltd, Pacific and Orient International Limited and Seqoil Pty Ltd.

The 12 oil permits to be acquired are predominantly situated in the Cooper/Eromanga Basin and the Surat Basin.

The company said it believed the potential for the Giligulgul Prospect alone was 16 million barrels of oil with a total oil potential of 28 million barrels for the Precipice Play prospects currently mapped on the permit.

Seeing the project through as non-executive chairman is Max Cozijn, finance director and company secretary of Metex Resources and CEO of Elkedra Diamonds NL.

David Archibald has taken the role of managing director and Metex Resources chief geologist Geoff Johnson and alternate director of Elkedra Diamonds completes the board as a non-executive director.

Mr Archibald said the company had a focused exploration program and a meaningful equity in its exploration permits with the result that in most cases a discovery would result in a value per share that would be a multiple of the issue price.

Australia produced around 193 million barrels of oil in 2001, however, the country’s self-sufficient position in liquids production is forecast to steadily decrease over the next decade from 720,000 barrels per day in 2000 to between 200,000 to 500,000 barrels per day in 2010.

Gold share placement

GINDALBIE Gold NL has placed 16.5 million ordinary shares at 7.7 cents a share to clients of Intersuisse Limited, raising $1.27 million to strengthen the company’s balance sheet.

The Minjar Gold Project is reporting stronger production figures following internal changes.

In May 3.423 ounces at a cash cost of $424 per ounce with an average grade of 3.16 grams per tonne were achieved.

A report by Ian Spence from Montagu Stockbrokers released this week said that the Gindalbie share price was undervalued, recommending a speculative buy, to a target price of 13 cents a share.

“GBG is, in our view, currently priced primarily on exploration potential despite continuing solid production from the Minjar Operations, which are scheduled to continue for another 12 months assuming no further discoveries are made,” the report says.

The company is about one-third of the way through spending a planned $4.5 million on an exploration program at the Minjar Project area in an attempt to increase mine life.

While Montagu attributes a net asset valuation for Minjar of 8 cents a share, it says it does not take into account any further exploration discoveries at the project or any treatment of low-grade stockpiles.

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