The International Resource Journal: Gunson Resources Limited

Gunson Resources Limited
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admin on 24 February, 2010 08:39:00
 
Those who have worked the mines know how tough of job it can be, but the
discoveries make it all worthwhile in the end. Gunson Resources Limited is a
mineral exploration company whose name is reflected in its main project as well
as its primary asset—copper exploration—at Mount Gunson in South
Australia.
Headquartered in West Perth, Australia, the mineral exploration company was
listed on the Australian Stock Exchange in May 2000. Two of its assets, the
Coburn and Mount Gunson projects were divested from Stuart Petroleum NL,
formerly Stuart Metals NL. Since then other projects have also been listed.
Gunson has made its brand stand apart in the market because it relies on very
sound technical work to back up its public statements. “We steer away from
sensationalism and therefore have a low public profile. However, many of our top
20 shareholders have been loyal us for many years because we are credible and
the company is run very lean with a high potential for capital
appreciation,” tells David Harley, managing director of Gunson Resources
Limited.
With the global downturn in the global economy, the past few years have been
difficult for many in business to endure. Because of the prolonged period of
unsatisfactory financial returns in mineral exploration, some global development
projects have been shelved indefinitely. “Gunson’s Coburn project is
now one of only two significant development projects left in the world and we
are in a good position to take advantage of the inevitable supply shortages that
will develop in 2012,” says Harley.
Area of growth
Coburn Ziron Project
Located in Western Australia is Gunson’s Coburn Ziron project that spans
1,200 square km of a fossil coastline with the potential to host world-class
heavy mineral sand fields. For the past 10 years, drilling has taken place in a
major heavy mineral sand deposit known as the Amy Zone, which is over 35
kilometres long, three kilometres wide and between 10 to 50 metres thick. 
“We stuck to our guns through some very tough times with our Coburn Zircon
Project. It lasted four years, and included several negotiations but it turned
out successfully. Despite the delays and disappointments over the past six
years, we have now completed and announced the results of our Definitive
Feasibility Study on Coburn,” tells Harley.
In a 2004 feasibility study, results looked good for Gunson’s Coburn Ziron
project as it showed that the Amy Zone can support a high volume, long life
mining operation which would produce quality minerals at a low cost.  It remains
today the world’s third largest greenfields zircon development project.
Pressing on, it was good news when the government gave Gunson the “thumbs
up” for its latest project. In May 2006, the Western Australian
Environment Minister Mark McGowan granted approval for the proposed mine, after
a three-year review process.  Once mining of the southern two thirds of Amy Zone
was given the green light, the EPA approved its 15 environmental management
plans.  Of these plans, which have been consolidated to 10, all were approved
formally in March 2007. With total revenue estimated around at $93 million
annually, the project has a surplus of $879 million, or $37 million per annum,
with a rate of return of 16.8 per cent and mine life of 23-and-a-half years.
“Annual production of zircon from Coburn will be about 3 per cent of
global production and zircon represents 67 per cent of the project revenue, the
rest being from titanium dioxide minerals for the paint/ plastic & welding
industries. Incidentally, 55 per cent of world zircon is used in ceramics for
glazing tiles and sanitary products like toilet bowls & hand basins,” says
Harley.
Strategic location is prime exploration opportunity
Mount Gunson Copper Project
Otherwise known as the Olympic Copper Gold Province, Mount Gunson is
strategically located on a flat topped hill, which allows for the best endowed
copper belt in Australia. This belt is over 500 km long and contains about 75
per cent of the known copper resources in Australia. Olympic Dam is the fourth
largest copper and largest uranium deposit in the world, containing some 42 per
cent of global uranium resources.
“This project has two parts. The first is a farm-in deal by Xstrata Copper
subsidiary Noranda Pacific Pty Limited (named after the Quebec City of Noranda),
where Noranda Pacific is sole funding deep drilling for very large deep
copper-gold deposits like Olympic Dam, just 100 km north of us,” tells
Harley, adding a new phase of drilling commenced earlier this month. “The
second part is on two shallow copper deposits excised from the Noranda Pacific
farm-in, where we have a bankable feasibility study in progress,” he says.
Two major discoveries at Prominent Hill within the past decade have drawn
attention to the area that spans roughly 100 km northwest of Olympic Dam and
Carrapateena, just 20 km east of Gunson’s Chianti Prospect, heightening
the overall interest in exploration in this belt. “The capital payback
period is two years and the potential mine life is over 10 years. A high grade
copper concentrate averaging 33 per cent copper with low impurities has been
produced in test work. We are in discussions with North American and European
concentrate buyers with a view to obtaining finance in exchange for offtake
rights,” Harley says.
Future plans
Gunson’s key milestones in 2010 are three-fold: firstly, to finance the
Coburn Project mine development, preferably with a zircon offtake partner;
secondly, to finance of the Mount Gunson Bankable Feasibility Study, preferably
by a copper concentrate buyer and lastly, the discovery of a significant new
mineral deposit on one of the company’s three exploration projects.
Often overlooked, this quiet achiever, Gunson Resources Limited, has two
exciting development projects in mineral commodities that are going to be in
short supply in the medium term future. “We have excellent exploration and
development potential, largely unrecognised by short term share traders looking
for quick profits,” Harley concludes.
www.gunson.com.au