Market awakens to Kalgoorlie on Cape York

Diatreme Resources is comparing its silica sand leases on Cape York with some of the nation-building resource developments. Diatreme has a resource of more than 400Mt of silica sand in the same region as the Cape Flattery Silica Mine, which is the world’s largest producer. The company’s takeover of Metallica Minerals will secure another 50Mt resource. The company was looking to at least a 50-year mine life, chief executive officer Neil McIntyre said. It was a long-term view on a very important commodity and had the potential to impact the economy like a Kalgoorlie or Bowen Basin. “This is size, scale, appetite for the commodity. In mining terms, these opportunities don't come up very often. This is strategic, it's important. This is a hundred-year mining opportunity potentially," he said. “I think geography has something to do. It's a pretty remote area. It's been left alone for many years, but I think the market has woken up. "We're $120 million market cap now. Metallica were $25-$30 million market cap (and the) market was starting to become aware. Main image: Diatreme Resources CEO (far left), Neil McIntyre with investors and staff at the Noosa Mining Conference. “I think they will truly become aware now as we merge together. The sort of numbers we're talking about, the mine life, the demand, physical demands for the commodity. I think market will wake up.” In the meantime, Diatreme Resources is inching towards final control of Metallica Minerals. The battle of the Brisbane-based companies was effectively over when Diatreme’s aggressive offer attracted 75 per cent support from Metallica shareholders. This led to a shakeup of the Metallica Minerals board which includes two members of the Diatreme board. Metallica formed an independent board less those members and recommended accepting the Diatreme offer. The figure is now 84 per cent accepted. At 90 per cent acceptance, Metallica Minerals can be struck off the ASX. Diatreme’s current offer expires on July 23 and Mr McIntyre, speaking at the Noosa Mining Investor Conference, said they may yet extend the offer period. “We need to see how the acceptances roll in, but ... we see a lot of buying in both our stock, which is quite interesting,” he said. “People have identified an arbitrage between buying Metallica stock and then accepting into the Diatreme offer. So we're agnostic on that. “If that gets us to our goal, that's a great outcome for us anyway." Mr McIntyre said the board of Metallica had been restructured recently and an independent board committee recommended that Metallica shareholders accept Diatreme's offer. “So we ultimately will be successful and are being successful in this takeover. We're now really right at that last few inches to get us over the line in terms of getting to 90.”

Market awakens to Kalgoorlie on Cape York

Industry Queensland

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