News

June 19, 2008

Troy Discovers That There’s An Awful Lot Of Iron Ore In Brazil

By Our Man in Oz

Gold took the Australian miner Troy Resources to Brazil. But it could be iron ore that makes the move worthwhile, prompting followers of the company to ask: where’s home and what’s the preferred commodity? “I was hoping you wouldn’t try to nail me on that,” says Troy chairman John Jones when the twin questions are put to him not long after his return to Australia from a board visit to Brazil. “We’re primarily a gold company which has stumbled onto a very interesting iron ore deposit - and how could we refuse?” How indeed? At least that ought to be the reaction of anyone who has looked at the early work Troy’s done at the Andorhinas iron ore discovery, which happens to be located on the same leases as the company’s gold mine of the same name. With iron ore prices soaring, and the gold price stalled, it is easy for a casual outsider to see Troy’s profits from iron ore very quickly overtaking gold.

No firm numbers are yet available on Troy’s iron ore, but there is a sniff of financial incentive in the air. One reasonable estimate is that for a capital outlay of less than US$5 million Troy could quickly be trousering an annual profit around US$40 million. No prizes for guessing that any project which offers a payback measured in weeks rather than years might catch the attention of the Troy board. That board has just approved a sharp increase in the Andorhinas exploration budget, for both...