For a number of years, the mineral sands industry in Australia has suffered from a lack of new discoveries to reignite investor enthusiasm for the sector. That may be about to change in the not too distant future.
In Australia’s unassuming Murray Basin, there is a rebirth in the making. While it hasn’t created a frenzy or received the coverage sometimes associated with a global mining “hot spot”, this “luke warm spot” does host some exciting ‘new generation’ deposits likely to cast global attention back on the country’s titanium stocks.
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BeMaX's managing director, Stephen Everett: "We're going to do the pre-feasibility stage [on Ginkgo] by October then hopefully a bankable feasibility after that, so it could be in production by 2002."
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The basin is slowly gaining world recognition as the next major mineral sands province, but it will probably take the successful development of a couple of projects before investor interest turns from a trickle into a flood.
A case in point illustrating the disparity between the Murray Basin’s perceived value and the market’s ho-hum attitude is Brisbane-based junior BeMaX Resources, which is a major landholder in the region and is sitting on a potentially huge and lucrative mineral sands deposit, yet its current market capitalisation is less than $10 million.
This current lack of market attention can largely be put down to the ongoing reluctance of investors to speculate on non-blue chip resource companies since the rise and fall of the dot-com stocks, and the false starts experienced in the first production from the Murray Basin.
However, the mineral sands sector is considered by some analysts to have one of the best risk/reward profiles of any sector in the resources industry, and the potential returns are high. When that message gets through to investors, then the Murray Basin could generate a lot more interest.
And that is what the Stephen Everett-led BeMaX expects from its planned development of the Ginkgo project. BeMax recently announced that an independent resource estimation, undertaken by Snowden Mining Consultants, confirmed Ginkgo as the largest contiguous indicated resource of heavy mineral sands defined to date in the Murray Basin.
BeMaX recently grabbed another 25% of Ginkgo through the acquisition of 100% ownership of Imperial Mining (Aust) from former partner, Imperial One. Everett said the deal with Imperial delivered to BeMaX 75% beneficial ownership of the Ginkgo deposit and enhanced the strategic opportunities for the company in the New South Wales sector of the Murray Basin. The remaining 25% equity in Ginkgo is held by private company Probo Mining.
“The agreement provides a significant boost to the project and will enhance BeMaX’s ability to progress exploration and pre-feasibility testing in the short term,” Everett said. “Ultimately, it will simplify funding of project development, should pre-development studies prove positive.”
BeMaX is in the process of carrying out a $600,000 pre-feasibility study, which is scheduled for completion in October 2000.
