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Gold/Mining/Energy : Houston Lake Mining [HLM-ASE] -- Ignore unavailable to you. Want to Upgrade?

To: DRT who wrote (223)	8/8/1999 8:08:00 PM
From: DRT	Read Replies (1) \| Respond to of 364

Selected highlights from: Sons of Gwalia Ltd., Quarterly Report: Three months ending 30 June 1999 Production and sales from the Minerals Division exceeded budget. Tantalum The tantalum industry is experiencing sustained demand primarily on the back of growth in hand-held electronic instruments including mobile phones, lap top computers, video cameras and pager systems. This will result in tantalum sales being sustained at over one million lbs. per year in accordance with long term sales contracts which, will in turn, result in sustainable profitability and cash flow from this Division. The Company anticipates producing and selling approximately 1.1 million lbs. of Ta2O5 in the 1999/2000 financial year. This will be an increase of 18 per cent over the 1998/1999 financial year. Future production increases will be dependent upon market requirements but the Company will have the capacity to increase production if required. Approximately 650,000 lbs. will be produced from the Greenbushes tantalum mine with a substantial increase to 450,000 lbs. from the Wodgina Mine following the plant upgrade. During the quarter, the upgrade of the Wodgina Tantalum Plant was completed on time and budget. Reserves at Wodgina also increased substantially to 25 million lbs. of Ta2O5. Reserves and resources at both Wodgina and Greenbushes increased during the year to in excess of 100 million lbs. of Ta2O5. The Company is the world's largest producer of tantalum, accounting for approximately 50 per cent of primary tantalum concentrates produced on a global basis. Tantalum is used in the electronics and metal cutting industries, the development of super alloys and the manufacture of defence electronic systems and jet aero engines. Total tantalum production for the quarter from the Greenbushes and Wodgina Mines was 235,749 lbs. with sales of 268,963 lbs. A re-assessment of ore reserves based on the most up to date drilling information from both the Greenbushes and Wodgina Mines has increased the total of the combined measured and indicated resource base from 44.2 million lbs. of Ta2O5 at June 1998, to 106 million lbs. of Ta2O5 as at June 1999. 1. Greenbushes Mine (Western Australia, 100%) The Greenbushes Mine followed last year's record throughput and production by setting another production record of 741,050 lbs. of Ta2O5 from the processing of 1.6 million tonnes of ore. Continuing improvement in process plant productivity and access to good quality ore exposed by previous investment in pre-stripped waste were the main factors involved. Redesign of the Cornwall open pit, which will require further pre-stripping in 1999/2000, will extend its life to 2002/2003. Beyond this, the open cut will be extended to the south into the Central Lode. A reassessment of ore reserves based on the most up to date drilling information has increased the measured and indicated resource base from 38.7 million lbs. of Ta2O5 to 75 million lbs. of Ta2O5. The long term development plan requires that plant capacity be increased when the mining focus shifts to Central Lode to offset lower ore grades. Production will be maintained above 600,000 lbs. Ta2O5 per year. Budgeted production for 1999/2000 is 650,000 lbs. Future drilling programmes will be focussed on identifying higher grade ore. The feasibility of exploiting higher ore grades by underground mining is also being reviewed. At Greenbushes, trialing of an experimental tantalum flotation circuit has proven encouraging. 2. Wodgina Mine, Western Australia (100%) Production from Wodgina for the year was 187,483 lbs. Ta2O5 from 272,000 tonnes of ore. Since this time last year, as a result of a very successful drilling programme, the resource base has increased from 5.5 million lbs. of Ta2O5 to 31 million lbs. of Ta2O5. Underpinned by this high quality resource, approximately $15 million of capital was expended during the last half of 1998/1999 to expand the capacity of the treatment plant from nominally 250,000 tonnes per annum to 650,000 tonnes per annum. This will increase production capacity to nominally 400,000 lbs. of Ta2O5 per annum at current ore grades. Budgeted production for 1999/2000 is 450,000 lbs. Geologically the area is highly prospective, and it is anticipated that the mine will have a very long life. Subject to further capital investment, the mine can be operated at a production level dictated by market requirements from time to time. Lithium Minerals The Company is a major participant in the global lithium minerals industry. Lithium minerals are used in the glass and ceramics industries for the production of pyroceramics, TV tubes, computer monitors and many types of container glass. Lithium minerals are used to increase productivity, improve product quality and enhance physical properties in ceramic and glass fibre applications. Sales and production of lithium minerals were 22,937 tonnes and 15,880 tonnes respectively for the quarter. Sales for the year at 54,338 tonnes were constrained by the market conditions. The Company is actively developing new applications for its lithium minerals products in an endeavour to increase sales. Research and Development has identified benefits for the ceramics industry by incorporating a newly developed 6% Li2O product into the body of ceramics. Commercial trials for this application have commenced in Europe and the USA and promise to open up new, volume applications. Lithium production and sales are forecast to average around 65,000 tonnes over the next year or two. _________ Comment: - Ta market demand is certainly exceeding expectations! - SOG's lithium is SQUI (i.e. a petalite equivalent), not spodumene as often mis-reported (this was pointed out to me by an industry source who knows Li markets far better than I). DRT