Siburan Resources is set for a summer drilling campaign on the West Coast after receiving commitments for AUD$3 million.
The ASX-listed company, which has for several months been targeting sophisticated investors in Southeast Asia, says the cash will be used to progress exploration at its Kirwan tungsten project near Reefton.
The company plans to drill about eight holes to a depth of 250 metres in the ‘flanks’ of Kirwan Hill. Managing director Noel Ong says the company wants to have a JORC-inferred resource at the end of the diamond drilling programme.
“That is our main game, and run a scoping study in parallel to that looking at possible ways of treating the ore,” Ong says. The company expects to spend between AUD$2.5 million to AUD$3.5 million on the programme.
“It’s one of those fluid management issues – if you get better results you spend more, if you don’t get good results you spend less,” Ong says.
Perth-based Siburan picked up exploratory permits for the Kirwan prospect in early 2012 after Auzex Resources relinquished the holdings back to the Crown. The company last summer drilled four holes to verify the main tungsten zone identified by Auzex.
If Siburan can attain a JORC-verified tungsten resource Ong is upbeat on bringing the project into production. The site is close to an established mining town and boasts the key roading and rail infrastructure.
“All the infrastructure is in place,” he says. “All you need to do is prove up the resource and then press a button.”
Tungsten sells for around USD$420 a metric tonne unit and Ong believes there is “huge demand” for the product. China has about 60 per cent of the world’s resource and produces 80 per cent of the world’s tungsten products, but is a net importer of Tungsten concentrate.
“Also, it banned any export of Tungsten concentrates out of China. That tells me their demand outweighs their supply already.”
Ong adds there are very few large-scale Tungsten mines outside of China. Those that are being looked at are targeting “low-grade bulk tonnage” plays.
“Our drilling programme hopes to show that the tonnes are there.”
Ong, who was interviewed last week, commented that it had been “tough” trying to raise the capital in the current investment climate where junior explorers are struggling for capital.
However, Ong expected most of the company’s funding to continue to flow from Southeast Asia. He also noted the board’s cumulative experience played a part in attracting investors.
“The key for us was to establish a board that had a good business sense and good experience in this sector,” he says. “All our guys may be ex-pat Malaysians, but we’ve all been in the industry for up to of 30 years.”
“In our small-cap industry you need to be in the industry for a while to know how to handle the ups and downs.”
Source : http://www.insideresources.co.nz/