Olympia Resources has signed access agreements to explore on three highly prospective zircon tenements in the mineral-rich Indonesian province of Kalimantan.
Olympia Resources has signed access agreements to explore on three highly prospective zircon tenements in the mineral-rich Indonesian province of Kalimantan.
The tenements are located in the Kasongan and Tumbangsamaba regions of central Kalimantan and cover a total area of 2,913 hectares.
In addition to exploration, Olympia has signed Heads of Agreements with Chinese customers to sell zircon concentrate produced by local miners in Indonesia.
The customers, Zhangzhou Antai Zircon Industrial Development Company Ltd and Zibo Qi-Culture Technical and Economic Development Company Ltd, have each agreed to purchase up to 50,000 tonnes of zircon per annum from Olympia over the next 10 years at world market prices.
The heavy mineral sands in Kalimantan contain a very high level of zircon.
Olympia Managing Director Peter Gazzard said the project represented an important step towards the company's goal of becoming a major supplier of premium zircon into the world market, and was a potential 'company-maker' for Olympia.
THE FULL ASX RELEASE APPEARS BELOW.
ASX RELEASE
16 March 2006
Olympia Resources to Explore Major Indonesian Zircon Region
Signs Heads of Agreements for Supply of up to $AUD 1 Billion of Zircon to China Over 10 Years
Olympia Resources (ASX: OLY) today announced it had signed access agreements to explore on three highly prospective zircon tenements in the mineral-rich Indonesian province of Kalimantan. The tenements are located in the Kasongan and Tumbangsamaba regions of central Kalimantan and cover a total area of 2,913 hectares.
In addition to exploration, Olympia has signed Heads of Agreements with Chinese customers to sell zircon concentrate produced by local miners in Indonesia. The customers, Zhangzhou Antai Zircon Industrial Development Co. Ltd and Zibo Qi-Culture Technical and Economic Development Co. Ltd, a state-owned enterprise (Zibo), have each agreed to purchase up to 50,000 tonnes of zircon per annum from Olympia over the next 10 years at world market prices.
The heavy mineral sands in Kalimantan contain a very high level of zircon. Typically the concentrates produced by local miners contain 75 per cent to 80 per cent zircon. The zircon is associated with ilmenite, rutile and gold with minor alumino silicates such as kyanite. The zircon is very clean with low iron and, from work done to date, can be classified as premium quality.
Olympia Managing Director Peter Gazzard said the project represented an important step towards the Company's goal of becoming a major supplier of premium zircon into the world market, and was a potential 'company-maker' for Olympia.
"Initially, we plan to source and supply up to 35,000 tonnes per year of zircon concentrate from local mining interests, while simultaneously and aggressively exploring for resources containing a minimum of one million tonnes of zircon," Mr Gazzard said.
"Our goal for stage two of the project is to establish our own mine and processing plant and sell at least 100,000 tonnes of zircon per year, along with smaller quantities of rutile, ilmenite and gold. When coupled with our Keysbrook mineral sands mine in Western Australia, this will make us a major player in the world zircon market, in addition to being the largest producer of 91% TiO2 leucoxene.
"The beauty of this project is that we will incur no upfront capital or mine production costs and expect to generate positive cash flow in May 2006. When we reach our stage one target of 35,000 tonnes per year of zircon concentrate, our annualised net cash flow should be around $AUD 5 million."
The first trial shipment of zircon concentrate is scheduled to leave from Indonesia for China in April 2006 with regular shipments planned from May 2006.
Zhangzhou Antai Zircon Industrial Development President Mr Su Anjing said "We are very pleased to have an agreement to purchase zircon from Kalimantan and look forward to a long relationship with Olympia. The Chinese zircon industry is growing strongly with zircon demand increasing by 20 per cent per year in China. We expect this growth to continue for many years to come."
Madame Yao Mei General Manager of Zibo said "Zibo is excited about the opportunity to work with Olympia Resources to establish a long term supply of Indonesian zircon to our processing plants in China. This will allow us to continue to grow our zircon business and increase prosperity for the Zibo region in Shandong."
Two of the tenement agreements will be held by way of a joint venture with private Singaporean company Sinarco Resources Pte Ltd (Sinarco), while a third tenement will be via a related third-party agreement. Olympia is also negotiating with local miners to explore an additional two tenements in the region. The joint venture with Sinarco is 75 per cent owned by Olympia and 25 per cent by Sinarco.
Mr Gazzard said Kalimantan is known for its zircon and gold mineralisation.
"Our leases contain large areas of old gold mining tails which are known to contain zircon. We know there is zircon present. Our exploration will focus on finding sufficient zircon for a profitable medium to large scale mining operation."
Olympia Resources will establish a new company - PT Olympia Resources Indonesia (PT Olympia) - to manage the Kalimantan project. PT Olympia will be owned 90 per cent by Olympia Resources Ltd and 10 per cent by Ali Susanto.
About Olympia Resources
Olympia Resources (OLY) is a diversified Western Australian, ASX-listed company focused on the exploration and development of a range of resource projects. The Company's Harts Range Abrasive Project in the Northern Territory is now close to becoming operational. This is one of the world's largest reported detrital garnet deposits containing proven and probable reserves of 8.9 million tonnes. It has an approximate mine life of 30 years.
Olympia also plans to begin mining heavy mineral sands at its Keysbrook Project south of Perth in Western Australia in early 2007. Olympia has signed a sales agreement with DuPont - the world's largest titanium pigment producer - to sell all of its titanium production from Keysbrook. The titanium sales combined with sales agreements in place to sell half of the zircon production mean that 85 per cent of the estimated $317 million total revenue from Keysbrook is pre-sold.
In addition to Keysbrook, Olympia has identified mineral sands resources at Pinjarra, Coolup and Ambergate in the southwest of Western Australia and is undertaking exploration to identify further resources in this well-established mineral sands mining province. Olympia has applied for exploration tenements in the Eucla Basin and will begin exploration in late 2006.
Olympia was listed on the Australian Stock Exchange (ASX) in August 2004.
About zircon
Zircon is extremely hard and resistant to corrosion. It is used in the steel industry to line blast furnaces, in the ceramics industry, and in engines, electronics and spacecraft. Zircon products are also used in computer disc drives, for lightweight warmth and protection in clothing, and in many domestic products.
