Houston Lake Mining [HLM-ASE] Message Board

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Gold/Mining/Energy : Houston Lake Mining [HLM-ASE]

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To: DRT who wrote (243)	11/7/1999 8:22:00 PM
From: DRT	Read Replies (1) of 364

You should find this of interest! From Sons of Gwalia: CHAIRMANS ADDRESS - 5 NOVEMBER 1999: STRONG FINANCIAL PERFORMANCE Sons of Gwalia's financial and operating results in 1999 again exceeded the previous year's result despite difficult and volatile times in the global gold industry. For the financial year ended 30 June 1999 the Company reported a net operating profit after tax and before abnormal items of $54.53 million which was an increase of 8.8 per cent on the previous year's result. Our full year result was assisted by an excellent contribution from our Minerals Division, which reported EBIT profits of $26 million, and which confirmed the benefits of some diversification in difficult periods for gold. Most of the Minerals Division profit was generated from our tantalum business which is continuing to expand, both in terms of production and profitability. OPERATIONS - CONSOLIDATION AND PERFORMANCE Our other key long life asset is our Tantalum Division. As you know, the Company is the world's largest producer of tantalum, currently producing 25 per cent of world demand. Tantalum production has grown considerably in recent years and we believe it will continue to do so. We have long term sales contracts for our products with our two major customers Cabot Corporation in the U.S. and the Bayer Group in Germany which underwrite the cash flow and long term viability from this business. The development of our tantalum resources has involved substantial capital and time but we are now starting to see the rewards from this investment. The new plant at the Wodgina Mine is now commissioned and is performing significantly in excess of nameplate capacity and production levels. We have therefore increased our forecasts of tantalum production from Wodgina in the current financial year to over 500,000 lbs. Ore reserves and resources at the Wodgina and Greenbushes Mine have increased substantially during the year and the Company's tantalum reserves and resources base now represent the largest known deposits of tantalum in the world. We have seen strong growth in the sectors of the electronics industry where over 50 per cent of the world's tantalum production is consumed. The Company recently hosted the Fortieth General Assembly of the Tantalum-Niobium International Study Center in Perth and it was clear from the papers presented at the Conference that this growth will continue in the future with flow-on demand for our products. We anticipate substantial increases in tantalum production and sales over the next few years which will result in increased profits and cash flow from these very long life resources. Our shareholders should be aware of the importance of the Company's tantalum business to the world's electronics industry. The Company's production and resource base are an integral supplier of raw materials to the tantalum industry and cannot currently be replaced from known global resources. EXPLORATION We are also carrying out exploration for tantalum, again around our major resources and will continue to look at strategically important opportunities for tantalum which may present themselves in the future. SUMMARY AND OUTLOOK Growth in our gold and tantalum production, growth in profitability and increases in our market capitalisation will continue to be key objectives over the next year. We will continue to expand our tantalum business with a key objective of maintaining market share and relationships with our two major customers. Peter Lalor Executive Chairman 5 November 1999

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