Copper, gold,phosphates and heavy rare earths are the minerals of trade for the $17 million market cap concern, publicly listed in 2007 after managing director Tony Alston spent time in Queensland's world-class Mt Isa and emerging Diamantina districts, backed by 30 years experience and a strong hunch that the region could provide the basis for a new player in Australia's exploration game.

"I originally went in looking for copper-gold [opportunities] but came out with a host of others," he recalled.

"The initial targets were iron-oxide copper-gold deposits similar to Ernest Henry and Olympic Dam but I had always been open to the possibility of exploring for more than just those two commodities.

"I expanded the search to include Broken Hill-Mt Isa style silver-lead-zinc deposits and picked up ground around Phosphate Hill for its uranium potential which has since turned into a phosphate play and JORC resource."

By the end of 2006, Alston had a number of greenfields tenements and was approached by 12 core investors about starting up a private company.

Kickstarted with $1 million seed capital funded by the group, the newly formed Krucible Metals was spearheaded by Alston, who soon aspired to launch it into the public arena.

His confidence was shaken though, by the realities of a "tough and competitive" initial public offering process.

"Midway through, we only had half the money we needed and that was from investors who had put up their hands before we decided to go public," he said.

"We landed on our feet and were oversubscribed in the end, but it was quite a worrying time."

Alston puts the success down to good timing, a multi-commodity approach over 5600 square kilometres underpinned by 100% ownership and a strategy of corridor exploration.

"Krucible walks in the shadows of giants when it comes to the Mt Isa district," he said.

"We have purposely chosen to focus on the corridors of the better-known mineralised zones as they are typically defined by major faults which are critical to mineralisation and therefore can be ideal places to explore.

"We have, for example, the Toomba fault which extends for 150 kilometres in our Diamantina district, and the east-west Cannington corridor which has been interspersed over the years with known mineralised deposits such as Cannington (owned by BHP Billiton), Osborne (Ivanhoe Australia) and Selwyn (Selwyn Mines).

Although Krucible has defined the corridors, Alston said it does not know exactly where the mineralisation is likely to occur.

"What we do know is that the area we define is generally more prospective than the surrounding ground so it becomes a less costly exercise where the chances of making a discovery are quite high.

"Exploration is a high-risk game and you need to shorten the odds where you can."

It is sage advice given the location of Krucible's key assets - the high-grade Korella phosphate discovery near Mt Isa and the Toomba copper-gold deposit in a remote frontier section of the Diamantina region, near the Simpson desert.

Both projects were hampered earlier this year by severe flooding, which stalled commencement of the 2011 field program by three months.

"We have had some steep learning curves while operating in that environment," Alston said.



"That said, it is virgin territory and the native title constraints are not as tight so there is a certain motivation for getting back in there and making up for lost time."

Of the two, Korella is shaping up to be the most promising and indeed timely, given the recent announcement of a maiden inferred JORC resource for the valuable heavy rare earth element yttrium amid rising global demand for the increasingly scarce commodity.

The world's current rare earth supply is dominated by China, but recent embargoes on Chinese exports have tightened supply and caused a sharp rise in the price of the commodity.

Last month, Krucible confirmed a resource at Korella of 4.2 million tonnes at 746 grams per tonne yttrium, with traces of other valuable elements such as neodymium and dysprosium potentially creating an alternative source of supply.

The discovery is a bonus to the proposed $40 million Korella phosphate mine scheduled for production by 2014, and was identified on a virtual drilling program during the floods.

"We used the hiatus to interrogate the drilling data and define a maiden resource which may be worth more than the phosphate and will certainly be a catalyst for our future growth," Alston said.

The JORC inferred phosphate resource is for 5Mt at a high grade of 30.8% phosphate.

The scope is for a quarry operation yielding 600,000 tonnes per year over six years to produce 3.6Mt at that grade plus additional direct shipping ore which will not require treatment.

"We are very fortunate that the rare earth component is a fairly simple yttrium mineral known as xenotime and is effectively pancaked on top of the phosphate deposit," he said.

"Ordinarily, this layer would be classed as overburden but it is separate enough to be mined and treated on its own.

"Korella has potential to be a company-maker producing in excess of $10 million revenue a year provided the price of rare earths and phosphates holds up."

Krucible has commenced a scoping study on the rare earths side of the project and has a large operational mining lease application over 16 square kilometres awaiting approval.

"If it proves favourable, this could become quite a profitable operation for us," Alston said.

"And if we decide to establish a relatively cheap gravity plant for some of the higher-grade yttrium, we may then be in a position to develop some of it before the phosphate to produce early cashflow."

For Alston, the reality of priorities takes over where the speculation leaves off.

At the top of the agenda is a drilling program at the Garnet, Pilgrim and Toomba copper-gold prospects to prove up copper intersections from reconnaissance drilling in late 2010.

At the same time, the company will be advancing its native title discussions and environmental management plans for Korella, with a view to finalising all aspects by September, after which time it will launch into a feasibility study.

"We have $2.3 million in the bank and we believe we can conduct a fairly positive and aggressive program with that," he said.

"How far it actually takes usvery much depends on the successof our drilling programs.

"We can achieve what we need to in the next six months with $1.5 million, which includes work on our mining lease application and drilling our copper-gold prospects.

He said the company aims to become a minerals exploration and production powerhouse, with operating mines and cashflow to underpin further regional exploration.

"One of the biggest challengeswill be continued access to capital and the ability to forward plan with limited funds.

However, Alston said there will be reality checks along the way. "Nature is a fairly formidable beast to deal with in our part of the world and that has created some early successes interspersed with some failures.

"Having said that, we have defined resources which we believe will stand the test of time, very good ground that we own outright, a strong team of experienced and motivated people.

"With persistence, innovationand a healthy dose of good luck, wewill enjoy further success as an exploration company which willlead into life as a producer."

*A version of this report, first published in the June/July 2011 edition of RESOURCESTOCKS magazine, was commissioned by Krucible Metals