Gindalbie Metals Ltd says its flagship Karara iron ore project in Western Australia’s midwest region (near Geraldton) will generate about $1 billion in annual export revenues, and that will help it start looking off shore, and at other minerals to diversify from its dependence on iron ore..
The company’s AGM in Perth yesterday was told that the expansion of the company will come after the Kara project is bedded down.
CEO Garret Dixon told the meeting that Gindalbie would cast its net wide, both geographically and in terms of the commodities it would target, in its bid to grow beyond a single-asset firm.
"We’ll be looking for joint venture opportunities in other areas and perhaps even other materials," Mr Dixon told shareholders
"We’ll be looking across our own tenements and further afield."
Mr Dixon said it would consider coal, manganese, chromite and nickel projects.
He said Gindalbie would be in a strong cash position to pursue acquisitions when Karara began producing revenues after production starts at the project in the middle of next year.
The recent $206 million capital raising meant the company had sufficient funds until then, Mr Dixon said.
The raising mainly comprised placements to major shareholder, AnSteel of China, and institutional shareholders, and was approved by shareholders.
The news of the possible expansion seemed to pick up the stock late yesterday.
The shares had traded down to $1.145, off around 5%, but they rallied a little towards the end to close at $1.18, down 2.5c or 2% after the speeches at the AGM were digested.
Gindalbie deputy chairman George Jones told the meeting that Karara would generate about $1 billion in annual export revenues at its initial production rate of 10 million tonnes per annum (Mtpa).
This would rise to $3 billion per year as the project was ramped up to its ultimate production level of between 14Mtpa and 30Mtpa.
The company’s infrastructure was being constructed to handle 36Mtpa.
Mr Jones said a recent estimate for the capital cost of Karara revealed a 20% jump but this had been ‘‘a tremendous outcome considering the combination of escalation, exchange rate movements and scope changes to the project’’.
The company paid tribute to Gindalbie chairman Geoff Wedlock, who was among six Sundance Resources executives killed in a plane crash in the Republic of Congo on June 19.
The placement approved yesterday will see AnSteel maintain its 36.12% stake in the company.
