Sallies looks beyond fluorspar

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Sallies looks beyond fluorspar
Allan Seccombe
Posted: Mon, 27 Nov 2006

[miningmx.com] -- FLUORSPAR miner Sallies is preparing a team to investigate a large deposit of the mineral in Australia as it looks to grow its asset base and possibly bring other commodities into its portfolio, CEO Izak Marais said.

Marais did not give much detail on the Australian prospect, but said it appeared there was little local interest in mining the mineral, which is used predominantly to make refrigerant gases, aluminium fluoride and as a fluxing agent in steel, cement, glass and ceramic manufacturing processes.

�We are almost at a stage where we will have a few people go have a look at it. It�s bigger than both Witkop and Buffalo,� Marais said during a visit to Sallies two fluorspar operations in northern South Africa.

We want five mines

A due diligence has yet to be conducted on the Australian deposit, he said. The project is in an early exploration stage and there are no facilities at the site. Marais declined say where the deposit is located.

Sallies is investigating a third deposit in South Africa, which is smaller than those at its Witkop and Buffalo operations, but is believed to have high grades.

Sallies wants to own five mines and not necessarily all in fluorspar.

�We don�t want Sallies to be just a fluorspar producer. We want five mines,� Marais told Miningmx.

The company is in a better position than it has been in the past couple of years to look around for other operations now that most of the operational difficulties at Witkop have been resolved and legislative hurdles cleared, he said.

�Maybe it would make sense to go into a little poked out gold operation. Unlike Witkop, we will do a proper valuation and get all the money we need upfront to fund it,� he said.

�Gold is my passion. I don�t know if I can convince the board to go down this route, but I�ll try,� he added.

Marais spent 10 years at Gold Fields and was operations manager at its Kloof mine when he was recruited by Sallies in 2003.

Witkop was acquired in 1999 but has not had an easy run as South Africa�s second acid-grade fluorspar producer behind Metorex�s Vergenoeg mine. It was not properly capitalised and battled to record steady production never mind increasing output.

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Target acid-grade fluorspar production at Witkop and Buffalo is a minimum 12,000 tonnes/month and 4,000 tonnes/month respectively during the course of the current financial year. It is currently on track to produce 10,000 tonnes and 3,000 tonnes this month.

Once Buffalo reaches its 4,000 tonnes target within the next couple of months, the attentions of its general manager Richard Viljoen will be occupied with studying the rare earths markets, the resources at Buffalo and how best to extract and sell the product.

Sallies has stockpiled about 100 tonnes of rare earths in a 1,000 tonne pile of fluorspar concentrate at Buffalo, which it bought for R65m earlier this year.

The demand for rare earths is thought to be as large as 75,000 tonnes a year, with China supplying up to 95% of that.

Mixed rare earths, which in fact are fairly abundant in the earth�s crust, are used to make glass and ceramic glazes, as well as in catalysts to refine petroleum.

Some individual and purified rare earths are used in lasers and colour television screens.

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