via CAAI News Media
BARRY FITZGERALD
March 19, 2010
OZ MINERALS has an initial gold resource of 605,000 ounces in the bag at its Okvau project in Cambodia. It is the first deposit in what OZ hopes will eventually prove to be a new mineral district.
Drilling on high-priority prospect areas within a three-kilometre radius of Okvau (8.1 million tonnes, grading 2.3 grams of gold a tonne) is planned.
While some in the market were disappointed that the initial resource estimate was not bigger and of a higher grade, OZ managing director Terry Burgess said it was ''a pleasing start'' for the group.
OZ is out to rebuild its mining portfolio after last year's drastic refinancing forced the sale of all its mines with the exception of the Prominent Hill copper and gold mine in South Australia.
The Cambodian gold play could yield a sizeable replacement project in time. But OZ's best near-term opportunity to increase its operational base will come from merger and acquisition activity. Mr Burgess has made clear that OZ will not be rushed, even if it has $1.2 billion in cash to fund the right sort of deal.
Mr Burgess said the initial resource in Cambodia had now given OZ the confidence to keep working in the area with the goal of proving up at least 2 million ounces of gold.
''Okvau is the only prospect we have tested in any sort of detail and there are a number of similar-looking targets to explore,'' Mr Burgess said. ''It is very early days for what is an entirely new mineral district."
Credit Suisse said that given the early nature of the Cambodian gold push, it would not want to value the interest at more than $120 million or 4¢ an OZ share.
''OZ sees strong potential to take this asset to 2 million ounces, but as a copper-focused miner the development/sale strategy beyond this is uncertain,'' the broker said in a research note.
Wilson HTM valued the initial resource at $42.4 million or 1.5¢ a share. It previously had valued the Cambodian gold interests at a nominal $1 million.
Source: The Age
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