Perth, Oct 29, 2008 AEST (ABN Newswire) - Since Conquest Mining Limited's (ASX:CQT)(PINK:CQMLF) last Quarterly Report, the major downturn in the world economy has continued to build and what is being described as the most dangerous financial shock in mature financial markets since the 1930's has created significant challenges in our industry.
Despite these events, Conquest has continued with its deliberate and measured approach to ensuring that it is not only well positioned to weather the storm, but also to capitalise on the opportunity provided by the Mt Carton gold-silver-copper project.
The approach we are following is to maintain our liquid assets (cash is king!), establish a modest production platform which we can leverage when the situation suits us (i.e. establish the minimum economic production quantity and match that with the most basic plant and equipment to get started), then minimise our capital expenditure to get into production.
As part of this approach we retained GRD Minproc, a Perth-based international resource engineering firm to complete a full technical review of all work done on the project to date. Their brief was, amongst others things, to provide an independent expert review of all technical work done to prove up the Mt Carton resource, give assurance of the robustness of the technical processes followed to date, evaluate and make recommendations on the most appropriate and saleable product mix and also advise the company on the most cost effective processing.
The findings and recommendations from GRD Minproc were for a simpler and less capital intensive approach than had previously been envisaged. This approach will only require a basic crushing, grinding and flotation process leading to the production of a concentrate and then bulk haulage to the port of Townsville for on-shipping to customers.
In exploring the marketability of a concentrate we have engaged with certain interested parties, with our initial research showing that this concentrate will be highly saleable in a variety of markets and especially China, where strong interest has already been shown by a number of smelter representatives.
We have also had advice from experts in concentrate marketing who are confident that we will be able to close an off-take agreement as soon as we are in a position to confirm full feasibility and have authority to proceed to development of a mining and processing operation.
Other work concurrently being undertaken by our own internal team under the leadership of new COO, Jeff Innes, includes confirming estimates of technical performance, capital cost, staffing requirements, operating cost, product value and marketability, project profitability, environmental and social impact, project risks and managing these risks to ensure a sustainable and profitable project.
All of the work required to confirm the business case has been completed and there are early positive indications of the long term viability of the concentrate option. The Company believes that the approach being followed will help it to maintain a stable business that is lean and efficient, while accelerating the process of getting into production with the minimum of capital input.
The Company is confident that it will leverage this opportunity by producing a reliable, consistent and cost effective concentrate which can be sold into markets such as China and India that will still need copper, gold and silver to support their economic growth (albeit at a more modest pace) and steadily urbanising populations even in times of predicted slower growth.
More importantly, this approach would de-risk the Company against the predicted future volatility in the commodity market while providing very good cash flows based on a relatively modest commitment of capital. Conquest is not only well-positioned via its strategy to face the immediate and long term challenges in the economy, but also to steal a march on its competitors and gain competitive advantage.
In this way it stays true to its stated mission "to deliver value to our stakeholders".
Exploration Highlights
- Bacterial Amenability tests have made rapid progress and recovered 93.7% copper in 15 days, at halfway point. This successful and unusually rapid oxidation and dissolution of copper prompted an immediate start to the 2m Column Leach test program.
- Diamond drill hole HC08DD019 intersected 30m @ 1,122 g/t silver (36 ounces), and included 12m @ 2,615 g/t silver (84 ounces). This spectacular intersection was drilled during resource definition at Area 39 within the high grade line of lode.
- A number of diamond holes were completed in the north-east part of the deposit with robust intersections including 21m @ 5.25 g/t gold, 40 g/t silver, 0.87% copper.
- Completed 8,819m of RC and diamond drilling.
- Regional Joint Venture partner Gold Fields has continued to explore the area surrounding Conquest's Mt Carlton Project Area with promising results. During the quarter, Gold Fields completed 1,460m Diamond Drilling, 1,021m RC Drilling, collected 613 surface samples, and completed Induced Polarisation (IP) geophysical surveys at the Capsize and Powerline prospects.
Contact
John Terpu
Managing Director
TEL: +61-8-9240-4111
FAX: +61-8-9240-4054
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