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PrintAt Friday's annual meeting of Vital Metals Ltd (ASX: VML) chairman Bill Ryan said the past year had been frustrating for both the company and its shareholders.
Since listing in late 2005, Vital has spent almost A$20 million (US$18.4 million) on exploration and development of the world-scale Watershed tungsten deposit in North Queensland. "The situation at Watershed is that we have essentially completed all the work and studies required for the Feasibility Study but it has not been assembled into a final format," he told shareholders.
The analysis showed the project will require a significant increase in the price of primary tungsten concentrates to become a profitable venture in the long term.
"In the original strategic plan, we targeted an operation with an output of 4000 tonnes per year of contained WO3 - the payable component - in concentrate form," Ryan said.
Due to the high capital cost the company, as an interim measure, elected to examine a smaller first-stage alternative with a lower capital cost. This would have produced almost 2,000 tonnes per annum of contained WO3.
"However, this option did not yield any more satisfactory return and we are currently reviewing a number of other options," he said. Ryan said the tungsten market appears to have stabilised and was beginning to improve. "The projections are excellent and it is our belief that Watershed will soon have its time in the sun."
Vital Metals also was looking at upgrading the large but low grade Mt Mulgine tungsten-molybdenum deposit in Western Australia and this project may require a large joint venture partner.
"There are a number of other aspiring tungsten producers in Australia and I suggest that all will find - in the eventual outcome - that the devil is all in the detail as regards any decision to commence operations," Ryan added.
The mining veteran told delegates he would be stepping down as chairman and as a director in the near future and the company would be run by new chief executive, Dr Howard Carr, who was appointed this week.
The company announced this week it would be diversifying into gold by taking up farm-ins on two projects in the south east region of Burkina Faso in West Africa. Vital can earn up to 70% in the Doulnia and Campala prospects by sole funding the first A$3.5 million (US$3.21 million) on exploration and may increase to 80% by completing a pre-feasibility study.
These permits are held by Ampella Mining Ltd (ASX: AMX), a company in which Ryan is involved that holds the Batie West gold project in Burkina Faso which has been producing positive exploration results.
Sources from Ross Louthean, Mineweb.net
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