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Gunson Resources Improves Operation Of Coburn With Pastoral Lease Acquisition

Gunson Resources (ASX: GUN) will have greater operational flexibility over its construction-ready Coburn Zircon Project with the purchase of a pastoral lease covering the northern half of the Coburn ore body.

The company has entered into a conditional agreement to purchase the Hamelin pastoral lease, marking an important milestone in the company's development schedule.

Managing director David Harley told Proactive Investors today the Coburn ore body runs onto the Hamelin pastoral lease, and the purchase of the lease makes it easier for Gunson to move around the project.

Another advantage of the lease is the strategic location of the lease, which abut the eastern boundary of the Shark Bay World Heritage Property.

Harley said if Gunson places the village around the existing homestead it provides workers with a view of the sea, which is likely to attract workers.

"What it boils down to is it is much easier to get people to work there. Logistically and for lifestyle and for the workers, it's much better," he said.

The lease is just over twice the size of the Coburn pastoral lease purchased by Gunson in 2005.

The Coburn pastoral lease covers the southern half of the Coburn ore body, where Government environmental approval for mining was granted in 2006.

Indicating the strong project Gunson has is the interest being generated in the Coburn Zircon Project by majors such as DuPont and an East Asian industrial group.

The company recently secured an offtake deal with the world's largest pigment producer, DuPont, for its proposed share of chloride ilmenite production from the Coburn Project over a five year period.

Gunson is also well advanced in discussions with potential offtake partners for the higher titanium dioxide mineral products and zircon.

The Coburn Project, which has an internal rate of return of 28.3% and a net present value (8%) of A$223.7 million, has also attracted investment from overseas.

An East Asian industrial group is earning a large minority joint venture interest in Coburn, one of only a few significant advanced mineral sands projects in the world.

Interestingly, it takes a long time to get an exploration prospect from discovery to commercial production, the lowest quoted average being 10 years.

This means a construction-ready project, like Coburn, is positioned well ahead of other projects in the pipeline.