Realising the value in the Olympic Dam Corridor
Apollo Minerals is an Australian iron ore exploration and development company, which listed on the Australian Securities Exchange (ASX:AON) in October 2007. Dominic Tisdell, Executive General Manager at Apollo Minerals, says that he is new to the exploration company, but is very excited by the possibilities that it represents.
Tisdell himself has over 15 years’ experience in this industry and has worked with some of the largest trading and resource companies in the world. “I worked with Japan’s largest general trading company. It was a wholly owned subsidiary of Mitsubishi Corporation. They had a very large interest in coking coal – which is used in steel making – iron ore, thermal coal, as well as uranium projects. I was involved with their internal mergers and acquisitions team, but I saw the opportunity that Apollo represents and realised that they had a couple of great assets and potential. I wanted to help them realise that potential,” he explains. He began his career with Rio Tinto in Western Australia, where he held key roles in both planning and mine design. He has also actedas an advisor on investments totalling $3.25 billion.
Developing the South
“The company was listed on the back of acquiring an interest in what are our iron ore and base and precious metals projects in the Gawler Craton of South Australia,” says Tisdell. “Since that time we have acquired 100 per cent of two iron ore projects in one of the mining powerhouse of Australia, the Pilbara of Western Australia,” these projects arecollectively known as the Mount Oscar Project. “Many investors are aware of what we have in Western Australia but are unfamiliar with our assets in South Australia – which we call the Commonwealth Hill Project. This latter project is focused on two streams of exploration and development, the first is based around iron ore – there is a historic resource there, but there are many other prospects there that we are looking to explore. It is also located along the edge of what is known as the Olympic Dam Corridor, and this is trending North-West trending feature that hosts a lot of what is called IOCGU (iron oxide-copper-gold-uranium) deposits,” says Tisdell.
He says that other projects may have gotten more attention, but the areas they are working in represent significant potential. “Most people will be familiar Oz Mineral’s Prominent Hill project, which caused quite a stir during the GFC when the Chinese tried to acquire that, and were restricted from the acquisition. We believe that we have a project that has the potential to host that sort of interest as well.We’ll be keeping an open eye out for that sought of mineralisation as we work towards the near-term development of an iron ore mine on that property.”
Strong industry, cautious projections
Tisdell sees that the iron ore industry at present is very strong and sees this trend continuing for at least the next six years. With a strong Chinese industrial economy next door, hungry for natural resources and an emerging powerhouse in India, it would seem that projects like the ones that Apollo Minerals represents will help solidify the future of the Australian resource economy. “I see a great future for these projects, although I think the growth rates will moderate a little bit from where they are right now and over the last decade – and this is because the prices have been so remarkably high,” comments Tisdell. By maintaining moderate projections in their project exploration and development, Apollo looks to meet its investor’s expectations, if not exceed them. “The demand will still be very strong, and we see that China will continue to grow at 4 to 5 per cent in annual terms, and we are looking forward to being able to satisfy that demand,” he says.
Advancing the way
Right now their Mount Oscar Project in Western Australia, Tisdell says they have reached the advanced exploration stage. “This has potential to be in production within the next three or four years. The South Australian project is in the early development stage, and alsohas potential to be in production in the next three or four years as well.” He says that the outcome they are looking to fulfil with their Mount Oscar Project is to ultimately outline a resource of at least 350 to 650 million tonnes. “That will allow us to produce anywhere between 2.5 and 10 million tonnes of product a year,” he says. “In terms of revenues this could be anywhere up to 1.5 billion dollars a year.That sought of development is expensive though, so in this market we’ve looking to start small with a mined output of around 1.5 to 2 mtpa.”Tisdell also points out that given the highly favourable location of both projects being close to export infrastructure Apollo can succeed here where many others struggle due to competing projects’ need to develop expensive off-site export facilities such as heavy haulage rail networks and associated deep water ports.
Tisdell says that they have not stopped looking for opportunities, but have been utilising their extensive international network to look for new projects. “We have been keeping an eye out for emerging iron ore provinces overseas, and we recognise that some companies such as Sundance have done very well in West Africa, and we are actively pursuing investment opportunities in similar overseas locations with the view to acquire high quality iron ore projects in order to get them into production soon.” This move would guarantee Apollo additional positive cash flow that they could reinvest into their exploration and development efforts, and expand their portfolio of successes.Another hallmark of Apollo’s operations is that in the communities that they operate in they have maintained very positive relations with residents. “I am aware that some companies have difficulties here, but that has not been our experience at all,” says Tisdell. “We have gotten the approvals in place that we need, and we have worked closely with all the Aboriginal groups, and it has been a very productive relationship.”
Tisdell says the one of the best things about Apollo is their focus, and their ability to strategically plan their exploration, development and acquisitions. “One of the great things about Apollo is our focus. We are completely devoted to developing our assets – and we believe they are very valuable assets – and that there is still a lot of unrealised potential in them,” he says. Tisdell also states that they will continue to work very hard over the next six to 12 months to communicate that value to the market, and demonstrate leadership in the development of their assets with the single minded goal of being in production soon.
