Siberia hopes for warm welcome

DETAILS have been released concerning the new Andrew Forrest-backed gold exploration venture, Siberia Mining Corporation Limited.

A prospectus released last week followed recent news of the company and the involvement of Mr Forrest in the deal. The company is seeking to raise $2.2 million through the issue of 11 million, 20-cent shares. A prospectus was lodged with the Australian Securities and Investment Commission on March 13.

Mr Forrest has tied together former Anaconda Nickel Limited colleagues, formed in 1994, together with tenements previously explored by Anaconda in the late 1990s.

SMC was established in 2001 by geoscientists Adrian Vyass, Jonathan Downes and Richard Hill. Mr Forrest joined the board earlier this year and is surrounded by previous Anaconda Nickel colleagues Christopher Linegar and Malcolm James.

On listing, which is set down for May 1, the company will have 23.5 million shares on issue, providing it with a market capitalisation of $4.7 million at 20 cents a share.

SMC has obtained more than 500 square kilometres in the Kalgoorlie region, which the company says makes it one of the largest ground holders in the area. Its key project is centred on the Siberia South tenement.

Besides the tight capital structure and what the company says is a high leverage to exploration, the directors feel the strong gold price and continued rationalisation of the Kalgoorlie region make the investment an attractive proposition.

After allowing for issue costs of $195,800, and administration costs of $1.03 million in the first two years, the company expects to have half of the money raised via the IPO available for a two-year evaluation and exploration program.

SMC has nine gold projects, seven located in the eastern Goldfields and two in the eastern Pilbara.

Besides Siberia South and Siberia North, other Kalgoorlie tenements include the Kunanalling Super Project, Carnage, Ida, Scotia and West Kundana.

The neighbouring ground holders are principally Placer Dome Asia Pacific Limited and Sons of Gwalia Ltd.

Between 1998 and 2000, Anaconda Nickel spent $1,000,000 exploring the northern portion of Siberia South and part of Siberia North. The projects are situated on either side of the Sand King and Missouri gold mines, which contain an estimated 354,000 ounces of remaining resources. In the east Pilbara the Gregory Range Project covers 223sq kilometres situated between several mining deposits including the Telfer gold mine, the Nifty copper mine and the Woodie Woodie manganese mine.

As part of the deal, Mr Forrest has been issued with 2,000,000 options to buy shares, which can be exercised prior to listing.

In January last year the company entered a joint venture agreement with Gary Steinepreis, director of View Resources, for the exploration licences covering the Southern Gregory Range Projects in the Pilbara. In January this year, the joint venture tenements were subsequently handed over to View Resources Ltd, previously named Smartworld Corporation Limited, which has been pulled out of administration in April last year.

Through the agreement, View holds a 3 per cent free-carried interest in the tenements to a decision to mine.

On January 22, SMC entered into a purchase agreement with Quantum Resources Limited to acquire 80 per cent of the Zuleika Tenement Purchase Agreement.

On the same day, it also secured an agreement with Astro Mining NL for an 80 per cent interest in the Mt Carnage Tenement as well as a tenement agreement with Gutnick Resources NL. Similar agreements have been agreed to with Westex Resources Pty Ltd, and Heron Resources Limited.

But it was in April last year that the company really started to take shape after it reached an agreement with Kalgoorlie Metals Pty Ltd, now known as Anaconda Exploration Pty Ltd, a wholly owned subsidiary of Anaconda Nickel Limited.

Under the agreement, KMPL retains the right to explore and develop laterite nickel and coincident cobalt mineralisation on the Siberia tenements.

Siberia must also pay a net smelter royalty to a maximum of $1,000,000 half yearly.

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