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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (18083)	4/21/2008 9:14:10 AM
From: LoneClone	Read Replies (1) \| Respond to of 193062

Sallies still hanging in there Brendan Ryan Posted: Fri, 18 Apr 2008 miningmx.com [miningmx.com] -- Troubled fluorspar producer Sallies is turning around despite the R25,6m loss made for the six months to end-December which was 35% up on the R19m the company lost in the comparable period to end-December 2006. That’s according to chairman and CEO Tom Dale who said he would split his dual responsibilities to bring a new chairman on board before the end of the year. p> Dale was appointed chairman at Sallies in April last year. He took over as CEO from the beginning of October when former CEO Izak Marais quit abruptly. Dale declined to name the incoming chairman but commented; “ you will be pleasantly surprised when you find out who he is.” Dale said the Sallies operation was being turned around through a combination of factors including; better control over the mining operations, the introduction of better management information systems and the negotiation of better prices for Sallies’ products. He added the company had found strong new backers through the latest convertible debenture issue which brings another R75m into the company. These included two financial institutions, Mauritius-based Dale Capital and New York-based hedge fund Firebird. Dale has no links to Dale Capital. He described Firebird as being “very bullish on fluorspar.” He added, “The shareholders have backed us to the hilt in what is a very difficult situation.” Sallies raised R75m in July last year through a rights issue but, according to Dale, “the money just went. It was like a drop of water falling onto a red hot oven plate.” Dale said investors would see “ a dramatic turnaround in the second half” although he said Sallies would still show a loss for its full year to end-June. He pointed out production was rising while Sallies was getting a far better price for its fluorspar following the marketing campaign conducted by himself and business partner Johan Blersch who is now the commercial director for Sallies. According to the interim results published at the beginning of April, production levels at the Witkop mine near Marico rose to 56,599 wet metric tonnes (wmt) in the six months to end-December (previous comparable period - 47,277wmt). The target is to achieve a monthly production rate of 13,000wmt by July. At Sallies’ Buffalo mine, production rose to 10,874wmt from 7,592wmt over the previous comparable period. The interim statement is far less forthcoming on prices achieved and Dale indicated Sallies is considering stopping the release of sales price information. According to the interim statement prices of “well over $200/t” had been negotiated for sales during 2008. Dale commented, “We are sold out for calendar 2008 and we have got people beating down the door to buy fluorspar during calendar 2009. “We are getting prices that are dramatically better than last year but we are debating not giving out details on prices any more because it’s sensitive information.” Dale said arbitration over the legal dispute with former major customer Honeywell was continuing to take its course in Switzerland. Sallies cancelled a long-running sales contract with Honeywell because of punitively low prices that had been agreed to previously. Sallies’ recently published annual report said that the Arbitral Tribunal in Zurich gave its preliminary, non-binding assessment early in January. The Tribunal found that the termination of the Witkop contract with Honeywell by Sallies was legal according to Swiss law. It also found that the foundation upon which Honeywell based its US$6,9m claim against Sallies was unsustainable in Swiss law. Asked about his future commitment to Sallies, Dale replied; “if we are successful in turning around Sallies then I, Johan Blersch and the soon-to-be-named chairman intend building a broader mining business around it. “We will approach this with a clear strategy and, initially, see how far we get in fluorspar and related activities. I have no specific timeframe for my involvement and will pursue this for as long as I am enjoying it.”