News

November 07, 2007

Gunson Has More Than One String To Its Bow

By Our Man In Oz

Chinese demand v the Australian dollar. That’s one way of looking at the challenge which has been dogging Gunson Resources over the past four years as it has moved steadily closer to launching its Coburn zircon project in Western Australia. In theory, Coburn should have been an easy development. Demand for zircon, an essential ingredient in making ceramics, is high thanks to the Asian building boom. But, every time Gunson took one step forward it was forced to watch value disappear in currency movements, with the pain magnified by delays caused by a snail-like government environmental process. Now, with a rock solid Chinese partner taking a 40 per stake in Coburn, Gunson is within sight of the finish line – even if the high value of the Australian dollar remains a worry for investors.

Three weeks ago Gunson chief executive, the ever-optimistic David Harley, was close to ordering the champagne when he announced a second memo of understanding with his Chinese partner, China Triumph International Engineering. That deal cemented the Chinese investment in Coburn at 40 per cent, and established a process by which the Chinese will take on the “turnkey, fixed-price” construction risk associated with the mine, and the second-stage upgrading of zircon concentrate exported to a site...