New Chairman of Gippsland (ASX: GIP) Ian Gandel has presented a case for generating greater shareholder value in coming months.
Gandel has elected to support this with a significant investment in Gippsland from his own investment vehicle, Abbotsleigh Pty Ltd.
The company's world scale tantalum resource in Egypt, via its 50% owned subsidiary Tantalum Egypt JSC, is the 44.5 million tonne Abu Dabbab tantalum-tin-feldspar project in Egypt. Tantalum Egypt also owns the nearby 98 million tonne Nuweibi tantalum deposit.
A recent definitive feasibility study ("DFS") for Abu Dabbab based upon a mill feed rate of 2 million tonnes per year producing in excess of 650,000 pounds of tantalum pentoxide ("Ta2O5") which will make it the world's largest tantalum miner.
With a resource base in excess of 140 million tonnes, there is a high probability of expanded production.
Tantalum Egypt has executed a 10-year offtake agreement with the German tantalum refiner HC Starck GmbH for the supply of 600,000 pounds of tantalum per year in the form of a 20% Ta2O5 concentrate. Negotiations are presently in progress to adjust the offtake agreement to reflect the delivery of a high-grade synthetic concentrate ("SynCon") having a Ta2O5 content of >50%.
Gipplsand's probability of success at Abu Dabbab hase improved with the recent closure of mines in Australia, Africa and Canada. The recent financial crisis had impacted consumer markets and hence demand for commodities such as tantalum.
Project financier the German bank, KfW IPEX-Bank GmbH is likely to re-commence due diligence on the project.
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