Abu Dabbab - Tantalum-Tin-Feldspar
(50% Gippsland)
Introduction
The Abu Dabbab tantalum-tin-feldspar deposit is located within the Central Eastern Desert in Egypt. The deposit is located on land about 16km westwards from the western shore of the Red Sea.
The deposit is covered by two Exploitation
Leases (1658 & 1659) granted in the
name of Tantalum Egypt LLC, a company incorporated
in Egypt and owned 50% EGSMA and 50% by
Tantalum International Pty Ltd which is
a 100% owned subsidiary of Gippsland Ltd.
The proposed plant site located 6km from
the Red Sea coast has been secured under
Ministerial Decree No. 11/2003 and provides
for an area of 14km 2.
Previous exploration
Tin-tungsten mineralisation at Abu Dabbab has been known since the 1940s but it was not explored until the early 1970s when a joint Soviet-Egyptian team, completed an extensive exploration programme. In the early 1990s the project was further explored by a joint venture between the Egyptian Government (EGSMA) and Geominera Italiana. The previous work included 28 diamond drill holes, three adits, one crosscut, numerous trenches, surface sampling, bulk sampling and metallurgical tests.
ippsland carried out some re-sampling of the adits to verify the previous results, collected bulk samples totalling 43 tonnes which was used to conducted additional detailed metallurgical testwork in Australia. Encouraged by the results of the testwork, Gippsland commence a Bankable Feasibility Study which was completed in September 2004 by the international engineering Group Lycopodium Pty Ltd.
Resources
Abu Dabbab resources at 0.01% Ta 2O 5cut-off.
Resource |
Tonnes (M) |
Ta 2O 5 (%)
|
Nb 2O 5(%) |
Sn (%) |
Measured |
12 |
0.0274 |
0.0126 |
0.13 |
Indicated |
2.1 |
0.0260 |
0.009 |
0.16 |
Inferred |
26 |
0.0240 |
0.011 |
0.06 |
Total |
39.9 |
0.0252 |
0.0116 |
0.089 |
Bankable Feasibility Study
Bankable Feasibility Study – 2Mtpa
The BFS completed during October 2004 by
the international engineering group Lycopodium
Ltd determined that the world-scale 40Mt
Abu Dabbab deposit has the potential to
become a major global supplier of tantalum
whilst operating from a low cost basis.
Based upon the scheduled mill feed-rate
of 2 million tonnes per annum the sUmarised
results of the BFS are:
- Gross sales revenue in excess of
US$500 million over initial 13 years of
its estimated mine life (based upon tantalum
and tin sales alone)
- Net free cash flow of US$127 million
over initial 13 years of estimated 20-year
mine life
- IRR 17.4% on all equity basis
- IRR 29% on basis 80% debt & 20%
equity
- Capital Expenditure US$80.5 million
- Capital repayment period 4.5 years
The BFS determined that the project will produce
in excess of 650,000 pounds of tantalum pentoxide
("Ta2O5") per year which will firmly
establish the operation as the world's second
largest tantalum producer. The project will
also produce 1,530 tonnes of tin metal per
year.
The BFS also determined that the project
will generate gross sales revenue in excess
of US$500 million during the first 13 years
of its estimated 20-year mine life. These
sales are from tantalum and tin only and
exclude all potential feldspar sales revenues
The BFS also determined that the project
will generate a net free cash flow of US$127.6
million during the first 13 years of its
estimated 20-year mine life.
The BFS also concluded that the project
has an Internal Rate of Return ("IRR")
of 17.4% on an all equity basis. Assuming
a debt:equity ratio of 4:1 the IRR for equity
holders increases to approximately 29%.
The BFS completed during October 2004 by
the international engineering Group Lycopodium
Ltd determined that Abu Dabbab will produce
in excess of 650,000 pounds of Ta 2O5 (tantalum
pentoxide) per year which will firmly establish
it as the world's second largest tantalum
producer.
Gippsland has entered into two 4-year Heads
of Agreement for the off-take of 420,000
pounds of tantalum per annum. Additional
off-take agreements are currently being
negotiated.
Based upon a mill feed-rate of 2Mtpa, the
Abu Dabbab project is also scheduled to
produce 1,540 tonnes of tin per annum which
will be sold direct to industry and/or via
the London Metal Exchange.
The Abu Dabbab project has the potential
to produce approximately 1.5 million tonnes
per annum of ceramic grade feldspar which
would be used in the European ceramic industry.
In-plant testwork undertaken in Italy demonstrated
that the Abu Dabbab feldspar is ideal for
the production of ceramic tiles and sanitary
wares, the major use of the material. Consideration
of this additional phase of the Abu Dabbab
project will be undertaken following commissioning
of the tantalum/tin operation.
Gippsland has entered into Heads of Agreement
with a major Italian ceramics group for
the off-take of 2.65 million tonnes of feldspar
delivered over a 4-year period.
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