News

July 21, 2008

With The Help Of Some Germans And Some Seawater, Gippsland Should Close The Financing For Abu Dabbab Fairly Soon

By Rob Davies

Sometimes it is the simplest things that make the biggest difference. Gippsland has been working on its Abu Dabbab tantalum and tin project for some time now and progress has been steady if not spectacular. Chairman and managing director Jack Telford told Minews that negotiations on the project financing are going well and he is expecting them to come to a conclusion by the end of the third quarter. KFW of Germany is the counterparty as it’s 80 per cent owned by the Federal Government and 20 per cent by the German states it offers the attraction of a mandate to provide mezzanine finance for projects in developing countries at attractive rates. But it’s perhaps no coincidence that it’s a German bank that’s putting up the money, as the company has an offtake agreement with H C Starck of Germany for the tantalum, a level of public-private cooperation that seems unthinkable in the UK, or other, more market-driven countries.

Gippsland has not been idle while these negotiations have been going on. One relatively simple task that the company has undertaken has been to work up the resource by a further 11 per cent on the back of the modest amount of 2,000 metres of additional drilling in eight holes. The area drilled was one that did not have a high drill density from earlier, fairly shallow, campaigns. So although Gippsland had a fair idea of what was there, it did not have the definitive proof that was required. But...