Australian listed Gippsland Ltd (ASX:GIP) has signed a conditional US$7 million financing agreement with Taiwan based Foxxtel Inc, associated with Egyptian businessman Mr Ashraf Henin which, if completed, will fund the first development stage of its Abu Dabbab tantalum-tin-feldspar project in the Central Eastern Desert in Egypt.
The company had received a poor reaction from potential investors for a 2 to 3 Mtpa mining and development plan. This was attributed to the US$140 million capital cost, the need for additional testwork and the lack of familiarity with mining amongst potential investors. In response, a two stage development plan called the ‘400K plan’ has been proposed. The initial US$7 million development stage will produce 92,000 lbs of Ta2O5 and 260 tonnes of Sn annually. The final US$28 million stage will increase annual production to 400,000 lbs of Ta2O5, 960 tonnes of Sn and 1 Mt of ceramic grade feldspar.
Foxxtel has the potential to gain up to 50% equity ownership of the project, subject to it providing or arranging all the first stage funding. The success of the financing, which should be finalised by April this year, is subject to completion of the conditions of the agreement, due diligence, and final board member approval. Mine construction should begin shortly after, with first production targeted in 2016.
