SGW sons of gwalia limited

sgw/however administrators attract hc stark

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    Hopes of a Gwalia recovery
    Robin Bromby
    December 13, 2004

    SPECULATION that administrators of the failed Sons of Gwalia plan to revive rather than dismember the company have gained further support with news of supply arrangements being locked in until next September.

    SoG has advised tantalum producer Haddington Resources it will be required to supply 150,000 pounds of the mineral between January 1 and September 30 next year.

    Haddington mines the Bald Hill deposit in Western Australia, a tenement owned by SoG but contracted out to the junior, with all the production sold to the world's largest tantalum player.

    This news follows last week's announcement that the administrators from Ferrier Hodgson are to spend $18 million expanding SoG's Greenbushes and Wodgina mines.

    Ferrier Hodgson's Garry Trevor and SoG's chief executive John Leevers also signed off on a new contract with Bayer subsidiary HCStarck to supply 800,000lbs a year between 2006 and 2008.

    There has been increasing talk around Perth that, once they sell off the troubled gold assets, the administrators will recapitalise the tantalum side, thus preserving some value for existing shareholders – and they include one of the company's two main customers, Cabot Corp of the US.

    SoG went under in August with debts of $862 million, mainly the result of hedging and technical problems with its gold production.

    The tantalum mines were in the black to the tune of $34 million last year.

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