Half Yearly Report and Accounts
Sydney, Aug 29, 2012 AEST (ABN Newswire) - Australian Bauxite Limited (
ASX:ABZ) is an emerging bauxite exploration and development company, which listed on the Australian Securities Exchange (ASX:ASX) on 24 December 2009 with the ASX Code ABZ. This Review of Operations covers the period to 30 June 2012.
As at 30 June 2012, the Company through its wholly owned subsidiaries( ABx 1 Pty Ltd; ABx 2 Pty Ltd; ABx 3 Pty Ltd, ABx 4 Pty Ltd and ABx 5 Pty Ltd) holds 42 bauxite tenements in Queensland, New South Wales and Tasmania covering 8,960 km2..
Corporate
During the half year ended 30 June 2012:
- Mr Vincent Tan retired as a director at the Company's AGM in May 2012. Mr Ken Boundy was an alternate direct to Mr Tan.
- Mr Ken Boundy was appointed as a Director of the company on 6 June, 2012
- The Company raised $2.13 million in additional share capital during the first six months of 2012 though an issue to sophisticated and professional investors and also an offer to shareholders through a share purchase plan.
- Cash on hand as at 30 June 2012 was $2.8 million.
- The share purchase plan was completed after 30 June on 11 July 2012.
Projects
- A Pre Feasibility Study for the Goulburn Bauxite Project completed studies for low-capital cases for production commencing at 1.25 million tonnes per year and growing sequentially to full production as markets grow.
- Recent major changes at Port Kembla for future access to shipping in Panamax (+60,000 tonnes) or larger ships occurred shortly after the draft PFS was completed and these changes are being assessed and incorporated into the PFS during August.
- In conjunction with the Marubeni Group which has an option to purchase a 35% interest in the Goulburn Bauxite Project, a Stage 2 Pre Feasibility Study was commenced by GHD Engineers to assess the costs and practicality of commencing a 2.5 to 3 million tonne per year, larger-scale operation from the outset. This expanded study is due in September.
- Whilst the Goulburn PFS work was continuing, 3 project areas were identified in parts of Tasmania where there should be no socio-environmental constraints to early shipments of bauxite. Negotiations with various stakeholders, customers, contractors, ports and engineering firms are on-going and drilling is expected to occur during late August.
- The large Binjour project in central QLD was diamond-drilled to sample and identify the siliceous gel material that causes parts of the bauxite layer to appear subgrade when analysed by the company's standard lab procedure. This material has been identified as veinlets of pure hydrous Halloysite - a translucent suspension of clay and water in a gel. Testwork on various simple procedures to remove this gel material are proving successful and show potential to expand the size and continuity of resources substantially.
Exploration
- Resources increased to more than 100 million tonnes1,2,3,4 during the reporting period.
- Resource upgrades occurred at Taralga in the Goulburn Bauxite Project, southern NSW, Binjour Project in central QLD and Inverell in northern NSW.
- New discoveries of bauxite deposits have been made in Tasmania, South Binjour in QLD and Bungonia south of Goulburn, southern NSW and at Stannifer in northern NSW.
ABx rigorously applies selection criteria to selects its tenements based on:
1. good quality bauxite;
2. proximity to infrastructure connected to export ports; and,
3. free of socio-environmental or native title land constraints.
All tenements are 100% owned and free of obligations for processing and third-party royalties. The Company has already discovered many bauxite deposits and new discoveries are still being made as knowledge and expertise grows.
ABx's bauxite is high quality and can be processed into alumina at low temperature - the type that is in short-supply globally. Global resources declared to date total 106.4 million tonnes. At the company's first drilling prospect in Inverell, northern NSW, a resource of 38.0 million tonnes1 has been reported from drilling 15% to 20% of the area prospective for bauxite and a resource of 37.9 million tonnes2 of bauxite has been reported at the Taralga project in southern NSW. A 6.0 million tonnes maiden resource was declared at Guyra3. A 24.5 million tonnes4 resource has been declared at the Binjour Plateau in central QLD, confirming that the Company has discovered a significant bauxite deposit including some bauxite of outstandingly high quality. We aspire to identify large bauxite resources in the Eastern Australian Bauxite Province, which is emerging as one of the world's best bauxite provinces.
The Company has the potential to create significant bauxite developments in three states - Queensland, New South Wales and Tasmania and its bauxite deposits are favourably located for direct shipping of bauxite to both local and export customers.
The Company endorses best practices on agricultural land, strives to leave the land and the environment better than it was found and we only operate where welcomed.
Land Access
The Company's major drilling program is proceeding without interruption and with 100% approval of landholders of drill site rehabilitation work done by the Company's field crew. Landholder support has been positive in all areas. Because the Company is not limited to one or two projects areas it is able to mitigate land access risks such as native title, local landholder resistance or environmental legislation.
Exploration Sequence
The Company has developed an exploration technology that is successfully discovering bauxite, even deeply concealed bauxite.
Our drilling sequence commences with first-pass drilling at wide spacing to confirm the existence of good quality bauxite. Follow-up drilling then assesses the continuity of good quality bauxite over a reasonably large areal extent. Maiden resource estimates can arise during the follow-up drilling if a small part of the bauxite is drilled to sufficient drill-density for estimation. Maiden resource estimations help the Company assess the variability and consistency of the bauxite but should not be taken as an indication of the total tonnage potential from the entire area.
In-fill drilling and resource-estimation drilling is then carried out in project areas where the bauxite results are encouraging in both areal extent and quality. It will usually take many months of drilling to arrive at a total resource estimate and none of the Company's projects have even been 50% drilled-out to date. Overall, the Company has tested only 10% to 35% of the currently identified bauxite areas within its tenements.
Discoveries continuing
The Company continues to discover more bauxite areas by applying its exploration technology. It has applied for several new exploration tenements to secure these new discoveries. Drill testing will commence once the new tenements are granted.
Tenement Status
Tenements are 100% in good standing.
Bauxite Market Develops as Predicted
In 2009, the Indonesian government announced its intention to sequentially impose bans and taxes on exporting raw bauxite from Indonesia, commencing 9 May 2012 and taking full effect during early 2014. In early 2012, Indonesian authorities announced that in addition to bauxite export bans on 9 May, an export tax of 25% would apply to any bauxite exports and would increase to 50% tax on bauxite exports after 2014.
The action on 9 May 2012 confirmed the Indonesian government's determination to cut-back and heavily tax all bauxite exports so as to encourage and support the construction of two Indonesian alumina refineries to process Indonesian bauxite into alumina and supply that alumina to Indonesia's growing aluminium smelter industry that is based on Indonesia's low-cost energy supplies.
Most of Indonesia's bauxite exports are currently shipped to Chinese alumina refineries that operate at relatively low temperatures of around 140 degrees centigrade and rely on imports of low-temperature bauxite, which is composed of the tri-hydrate alumina mineral called gibbsite. The vast bulk of bauxite shipments into China have come from Indonesia since 2004.
During the months leading up to May 2012, Chinese imports from Indonesia rose well above their long-term trend so as to beat the 9 May deadline before taxes and bans on bauxite exports from Indonesia started to take effect. The Chinese import tonnages rose from the normal rate of 4.5 million tonnes per month to an all-time record of 6.274 million tonnes in May 2012, of which, 5.564 million tonnes came from Indonesia.
During May 2012, exports from Indonesia fell substantially and this led to a dramatic fall in Chinese import statistics for June 2012 to 1.02 million tonnes, of which, only 0.187 million tonnes came from Indonesia. The following graph demonstrates this pattern. Imports into China from Indonesia are not expected to return to trend for several months.
As Indonesian bauxite supplies contract and becomes more expensive due to high Indonesian taxes, ABx's bauxite will become highly competitive as a new, reliable supplier of high grade, low-temperature trihydrate gibbsite bauxite to Chinese and possibly Indian alumina refineries.
Once the Company's bauxite projects commence, transport logistics will become increasingly efficient.
Advanced grade control methods will produce premium-priced, consistent bauxite products for long-term customers.
Exploration outcomes
The Company achieved its 2012 global resource target of 100 million tonnes in June, 6 months early.
During the period the Company focussed its exploration on the Goulburn Bauxite Project, the Inverell-Guyra project both located in NSW, the Binjour project in Queensland and in Tasmania.
Drilling in these areas continues to define additional resources. To the end of this reporting period, 890 holes have been drilled at Taralga, 233 holes at Inverell, 517 holes at Binjour and 334 holes in Tasmania.
To view the complete Australian Bauxite half yearly report, please click the link below:
http://media.abnnewswire.net/media/en/docs/ASX-ABZ-692038.pdf
About Australian Bauxite Ltd
Australian Bauxite Limited (ABx) (ASX:ABX) has its first bauxite mine in Tasmania & controls the Eastern Australian Bauxite Province. ABx's 11 bauxite tenements in Queensland, New South Wales & Tasmania totalling 662 km2 are all 100% owned, unencumbered & free of third-party royalties. ABx's bauxite is gibbsite trihydrate (THA) bauxite that can be processed into alumina at low temperature.
ABx has committed a large proportion of its expenditure into Research and Development to find ways to capitalise on the main strengths of its bauxite type which is very clean, free of all deleterious elements and partitioned into layers, nodules, particles and grains of different qualities that can be separated into different product streams using physical, chemical and geophysical methods.
ABx has declared large Mineral Resources in northern NSW, southern NSW, Binjour in central QLD & in northern Tasmania.
ABx's first mine commenced at Bald Hill near Campbell Town, Tasmania in December 2014 - the first new Australian bauxite mine for more than 35 years.
ABx aspires to identify large bauxite resources in the Eastern Australian Bauxite Province and has created significant bauxite development projects in 3 states, Queensland, New South Wales and Tasmania. Its bauxite deposits are favourably located for direct shipping of bauxite to both local and export customers.
ABx endorses best practices on agricultural land, strives to leave land and environment better than we find it. We only operate where welcomed.
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