Altura Mining Limited

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IRJ takes a look at how this company has flourished, reinvested and stands today with a fantastic portfolio of diverse exploration assets.

It’s certainly not your everyday scenario, but Altura Mining Limited (formerly Haddington Resources Limited), of Queensland, Australia and Subiaco, in Western Australia, has an enviable suite of exploration assets supported by experienced management and internal cashflow generation.

The company listed on the Australian Stock Exchange back in 2001 after raising US$3.5 million for development of its Bald Hill tantalite mine. “The Bald Hill mine ceased operations in 2006 but provided cashflows that were reinvested in exploration,” says James Brown, Managing Director at Altura. “Since the company’s listing a number of exploration projects have been added to its portfolio. Initially exploring for tin and tantalum, Altura has made discoveries of uranium, iron ore, lithium, as well as, base and precious metals in Western Australia and Northern Territory.”

Altura’s focus: Indonesia

In that same year that Bald Hill ceased operation, Altura acquired the Balline Mineral Sands project in Western Australia; the company’s principle project today. In September 2007, the company acquired the Minvest International Group, providing sustainable cashflows from a mining services division predominantly based in Indonesia.

“Minvest were also the holders of mining permits in South Kalimantan now known as the Tabalong Coal Project,” Brown says. “The merger provided Altura with both prospective coal tenements in Indonesia and positive cashflows from the service companies (drilling and geophysical) in Australia and Indonesia.”

In December 2009, Altura purchased a 30 per cent stake in the Mount Webber DSO project in the Pilbara region, Western Australia. The remaining 70 per cent is held by Altura’s partner in this joint venture, Atlas Iron Limited. Mount Webber has a JORC compliant DSO resource of 44 MT and is slated for production in 2012 at an initial annual production rate of three million tonnes per annum.

In addition to Mount Webber, Altura has a 30 per cent stake (with Atlas) in five other Pilbara tenements currently being explored. “Altura now holds highly prospective tenements for garnet, uranium, lithium, iron ore, coal, tantalum, base and precious metals,” Brown says. “To compliment these [prospects], Altura also owns and operates its own drilling, geophysical and exploration division to complete most exploration activities in house. Coupled with the expected development of the Balline Mineral Sands Project in 2011, this places the group in a highly advantageous position to increase cashflows and accelerate the evaluation of the other prospective projects,” he says.

This varied portfolio, complimentary mining arm and future plans are all underpinned by the company’s core focus divisions; project development, exploration and mining services.

Altura’s divisions and in-house drilling

The key focus for Altura’s project development division is the 2011 development target for Balline Mineral Sands. “Tabalong Coal in South Kalimantan is also included in the project portfolio and currently progressing in gaining permits to mine,” he says, adding that these projects are both JORC compliant resource defined.

The Finniss Range Project, 50 kilometres south of Darwin, Pilbara tantalite and tin project, Smithfield project within the Balingup Metamorphic Belt in Western Australia and the Mount Shoobridge uranium, tantalum, gold, iron and base metal mineralization project, are all covered in the near-term by another focus. “Exploration is currently focussed in Australia with immediate activity on the lithium targets of Pilgangoora, Finniss Range and Smithfield as well as base and precious metals targets currently being drilled at Mount Shoobridge in the Northern Territory,” Brown explains.

Mount Shoobridge is also highly prospective for uranium with recent anomalies identified by a recent VTEM survey at Hayes Creek. Altura will deploy an in-house to drill to evaluate all exploration projects where suitable.

Brown notes that Altura’s ability to dictate how and when the company explores is one of the main attractions in operating its own drilling equipment and the cost advantages offered by owner operation of the drilling and geophysical equipment further enhances the overall company strategy. “The exploration and mining services division primarily consists of Asiadrill (100 per cent owned by Altura) and Velseis Indonesia (50 per cent owned by Altura) with both companies domiciled in Indonesia,” he tells.

“Asiadrill has the ability to operate up to 24 drilling units while Velseis currently deploys eleven geophysical logging units. The services division is operated and managed independently of the exploration and development division,” he says.

Altura’s next move

Altura is in a unique position. The company has already shown through its profitable business provision of organic growth that it can take on, understand and develop a large range of exploration assets. Altura’s experienced management has guided the way through the generation of internal cashflow and now the company and its shareholders are well placed to enjoy a new phase of growth and development. Brown says that in the near future the company remains focussed on producing sustainable cashflows from its mining and service company operations.

“Exploration targets and objectives are aimed to locating economic mineral resources. Altura currently has highly prospective tenements areas with discoveries of sought after minerals,” he says. “Shareholder value should be enhanced by delineation of these resources via commercial extraction or possible divestment.”

Altura presents an investment vehicle which we do not see terribly often. The company continues its exploration of this exciting portfolio of projects and while expectations may be high, Altura has already proven to be a company to deliver.