Sphere Minerals (SPH)

Shares / Stock Code

SPH

Stock Exchange / Sharemarket

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Sphere Minerals (SPH) is focused on investing in the iron ore sector. SPH is involved in the development of the Gueld el Aouj Iron Ore project in Mauritania, West Africa. The company also holds gold and base metals exploration licences in other regions of West Africa, and drilling its 100%-owned Lebtheinia Iron Ore project with a view to establishing the viability of a 30mtpa operation.

SPH listed on the Australian stock market (ASX) in 1986 as Altrack Limited (ATK). It changed its name to Airboss Limited (ABD) in 1992 and then to Sphere Investments Limited (SPH) in May 2000.

The Gueld el Aouk Project is a joint venture with Societe Nationale Industrielle et Miniere (SNIM). SNIM is an established iron ore producer in Mauritania, and through this partnership, Sphere has access to SNIM's existing iron ore rail and port infrastructure.

The iron ore industry is very globally competitive. The company has to compete on both the domestic and international markets, facing competition from BHP, Rio Tinto (RIO) and Fortescue Metals (FMG). Its major customers will come from China and other developing countries in Asia.

Guelb el Aouj (EL609) Project

The Company is developing the Guelb el Aouj Project in partnership with Société Nationale Industrielle et Minière (SNIM), Mauritania’s state-owned iron ore producer. The Guelb el Aouj Project has Resources & Reserves (JORC) of 851Mt and Exploration Targets of 1,500 – 2,050Mt The Company earned a 50% stake in the Guelb el Aouj Project for funding a 7Mt/a Definitive Feasibility Study (DFS), which was completed in April 2008. The JV partners are now evaluating options to increase the project scale to 15 – 30Mt/a.

Askaf (EL172) Project

The Askaf Project covers the exploration licence EL172, located 35km south of the Guelb el Aouj Project Area and adjacent to SNIM's iron ore railway.

The Company has identified Askaf as a potential early cash flow, low capital cost, DSO-style entry project based on producing 4Mt/a of a sinter feed blend product from the Exploration Targets totalling 330-500Mt at in-situ grades of between 35% Fe and 37% Fe (see Table 5). A 10,000m RC and diamond drilling campaign on the Askaf deposits commenced in November 2009.

Outstanding maiden metallurgical test results announced in January 2010 confirm that a -1mm Sinter Feed Blend product of 65-67.8% Fe at 34-52% mass recovery can be produced from a simple dry magnetic separation process. Systematic DT testwork (0.080mm) on 3m drill samples shows Askaf can produce DR grade pellet feed concentrates at >70% Fe at 35-44% mass recovery.