Barrier Daily Truth

A miner with the Midas touch

Friday, 3rd February, 2012

CORE FOCUS: Nick Sheard and Carpentaria Exploration - watch this space!

By Paula Doran

A journalist has to walk away from an interview with Nick Sheard and think “Whatever that man’s got going with Kharma, I’d like some too!”

The chairman of Carpentaria Exploration Ltd, the company behind the biggest iron ore prospect in NSW and perhaps the nation, just seems to be on a roll.

Not only is the Hawson’s Iron Project, a previously undiscovered promise of magnetite, set to raise up into a mini mining city, but another prospect, north of Broken Hill is now showing real strength in a different cache of minerals.

But let’s touch on Hawson’s first. The mammoth iron project, 60 kilometres south of the Silver City, could eventually hire 1000 workers, producing high grade ore to be shipped from a South Australian port straight to the hungry arms of China.

Like a multi-sibling family, Carpentaria is cultivating two projects of note in the Far West. There’s Hawson’s, the eventual high achiever, the needy child that initially got all the attention (if I can use that kind of parenting analogy) and then there’s the unassuming prospect in the family, the Tungsten prospect in the Barrier Ranges off the Tibooburra Road.

This is an area more traditionally rich in mineral resources, compared to the countryside which now houses Hawson’s, an area that up until Carpentaria explored, had flown under the radar of a state that had been explored, mapped and sorted within an inch of its life.  Or so we thought.

“We originally came here in late 2008,” explains Sheard, on the rise of the junior exploration company.

“It took a while to realise what we had down at Hawson’s.  It wasn’t until we did the exploration that we thought ‘Jeez this could be massive!

“When we did the resource drilling to confirm this, we knew we were onto a big one.”.

In Hawson’s the core group of management - all of whom were embedded in Broken Hill’s mining sector at one stage in their careers - have found a project that pre-feasibility studies estimate is worth $3.2 billion.

The magnetite iron ore is soft at Hawson’s, according to Sheard, which will make it easier and cheaper to work with. The company is preparing for the all important feasibility study and is looking at every option for low cost mining and processing.

But back to the parenting analogy, and it’s the quiet achiever in the Carpentaria stable that is now coming to the fore.

In the hills of Yanco Glen, the historical site of tin mines and the Far West’s tenacious industry pioneers, Carpentaria is pushing towards a quick financial turnover in the development of its tungsten/tin, base metals project.

Tungsten is an extremely strong metal, and an extremely rare one.

It is used in anything from jewelry to bandsaws and ballistic missiles.  “Tungsten is also an endangered metal,”explains Sheard.  “It’s considered a strategic metal. China has 70 to 80 per cent of the world’s resources of it, and they’ve now banned exports.”

At $50,000 a tonne for pure Tungsten, you can understand Carpentaria’s enthusiasm to hasten production. And while it won’t be a long mine life in the hills to the north, it could certainly be a lucrative one.

“It’s one of those classical exploration stories,” laughs Sheard. “We got the Euriowie lease because we were looking for tin. There were a cluster of tin deposits and we needed to add them up to make them worthwhile, so we bought another lease off a company named Wolf Minerals to expand the tin, and there was the tungsten.”

So the company now has a potential tungsten mine on its hands, with tin extraction as a bonus.

This is the part of the story that we link back to my initial intimation that Nick Sheard and his team are either very lucky, or very clever.

Despite the extensive work so far at Hawson’s and in other exploration programs, Carpentaria Resources still has a very healthy bank balance.  In fact despite all the work in this region, it now has more money in the bank than it started with, without impacting shareholders.

Not only has the company got quite a bit on the go around NSW and into SA, but it also dipped the collective toe into the mining waters of Queensland.

“We bought a little coal company in 2008,” says Sheard.

“It was in the Galilee Basin, north of one of Gina Rheinhart’s interests, but no-one had looked at this particular lease because they thought the coal was too deep.”

It was a risky buy, even by Sheard’s standards, but as with every risky venture, sometimes it pays off and this time a coal mine bought for small change in mining terms (under $100,000)   sold three years later for $1.5 million cash and $2.5 million in shares.