Is this a reversal of the 1999-2000 trend of mining companies leaping into technology?
Is this a reversal of the 1999-2000 trend of mining companies leaping into technology?
While uranium has been the hottest field of late, iron ore has also become very speculative, so it’s perhaps not that surprising to find loss-making telco IC2 Global Ltd last month jump on a Western Australian iron ore prospect. Making the story even more intriguing is the vendor, one of the private companies of Perth mining entrepreneur Vladimir ‘Roger’ Nikolaenko.
The 160 square kilometre Victory Bore project, 100 kilometres south-east of Mount Magnet, could host from 30 million tonnes to 500mt, depending on the independent expert report quoted.
The Sydney-based telco’s farm-in deal is with Mutual Holdings Pty Ltd, a company ASIC records show to be owned by Mr Nikolaenko, the former managing director of Reefton Mining NL.
Mr Nikolaenko has had a long and colourful involvement in WA’s mining sector.
Following the deal, IC2 Global’s share price doubled to four cents before easing back to three cents.
“It was an opportunity that came up and we grabbed it,” IC2 Global chief executive officer Rodger Johnston told WA Business News.
Mr Johnston is also non-executive chairman of Perth-based Western Australian Metals Ltd and a non-executive director of Rusina Mining NL, from which he recently resigned as chairman.
“We’ve already had a couple of people express an interest in assisting us with the project, which I guess is a reflection of the current state of the market,” he said.
Mr Johnston said the company would move quickly to finalise the work program required to further prove up the resource and was looking to appoint the expertise required for that.
“Getting the project firmed up is our first priority,” he said.
However, he did not rule out spinning off the company to avoid confusion with IC2 Global’s current broadcast investment acti-vities, while ensuring the benefits flowed to existing shareholders.
“This is different from our core business and maybe that could constrain shareholder value,” Mr Johnston said.
IC2 Global is an investor in the broader community communi-cations market, with its major focus on subsidiary Westel Wireless Systems Pty Ltd’s costly Project 25 compliant wireless base stations.
Mr Johnston conceded its recent order for 30 base stations for the US military, worth more than $300,000, had been “a long time coming”.
IC2 Global made an after-tax loss of $930,300 in the December 2005 half, but raised $1.6 million in the period. This followed a $3 million loss for the 2004-2005 year on sales of $462,000.
A recent independent report on Victory Bore by Geological Investigations principal John Wyatt said an exploration target of between 30mt and 48mt of iron ore could be targeted for drilling down to 50 metres.
“If mining at Victory Bore was carried out to a depth of 100 metres, the study found the exploration tonnage could double,” Mr Johnston said.
If infill drilling confirmed similar grades over the 11km long magnetic anomaly, it was conceivable the available tonnage could even equate to Mutual’s exploration target of 500mt, based on a 1981 report.
At this stage, the identified mineralisation can only be assigned a low level “exploration results” status.
Mr Johnston said the tonnages compared favourably with other deposits in the Mid-West region, including Gindalbie Metals Ltd’s $1 billion 737mt Karara joint venture, Mt Gibson Iron Ltd’s 20mt Tallering Peak iron ore project, and its namesake 240mt project.
Production from the area is already being shipped via Geraldton, 450km west of Victory Bore. The farm in includes the requirement to establish a minimum 50mt resource.
