27/04/1999 - 22:00

Sovereign clears Pilbara hurdle

27/04/1999 - 22:00


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SOVEREIGN Resources (Australia) NL has reached a significant milestone in the development of its SRDC manganese sulphate project.

Sovereign clears Pilbara hurdle
SOVEREIGN Resources (Australia) NL has reached a significant milestone in the development of its SRDC manganese sulphate project.

The company has signalled a green light to proceed further with its $85 million electrolytic manganese dioxide (EMD) and manganese sulphate project, located 61 kilometres southeast of Nullagine in the Pilbara region of WA.

This follows positive results emerging from a comprehensive process, technical and design analysis.

The project, which has been in planning for two years and is in the latter stages of a bankable feasibility study, is forecast to produce in parallel 15,000 tonnes of EMD and 10,000t of manganese sulphate annually to generate revenue of $44 million and an estimated operating surplus of $22.4 million.

Sovereign managing director Mark Hansen said the company was negotiating with financiers to structure a range of debt and equity finance to fund the project.

“While we are still completing the feasibility study on the overall project, we have reached a key milestone in development — we are confident that it is sufficiently robust to proceed from both an economic and a technical point of view,” Mr Hansen said.

“Our investigation has shown that our processing parameters are favourable, and we have been able to take out a lot of risk.

“The feasibility study on our EMD production has proved positive and we are now proceeding with the engineering design element of the overall feasibility study.”

South Africa’s world-renowned minerals research laboratory Mintek is involved in process development and extensive ongoing tests work on the project.

BHP Engineering is undertaking the bulk of engineering design.

A feather in Sovereign’s cap is that Invest Australia is undertaking international promotion of the investment opportunity offered by the project.

“We are very encouraged by the prospects for the project,” Mr Hansen said.

“The international market for EMD is robust, there is significant potential for us to incrementally increase production, our process is highly innovative, we are confident of maintaining low operating costs and high margins, raw material is plentiful and the project has an excellent life expectancy.”

He said the life of the project was estimated to be at least 20 years and there was potential to maximise economies of scale through improved yields and lower production costs once the project reached a mature stage in its development.


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