Page 10 - Bauxite Resources Annual Report 2014

COMPANY BACKGROUND
Bauxite Resources Limited (“BRL”) is
a Western Australian listed company
focussing on the acquisition, exploration
and development of bauxite mineral
deposits in Western Australia.
The Company has a beneficial interest
in 63 exploration licences covering
7,905km2 (41 tenements granted
covering 5,142km2) centred around
the highly prospective Darling Range
in south west Western Australia, the
largest bauxite and alumina producing
region in the world. Alumina is Western
Australian’s third most valuable resource
adding $4.1 billion to state revenue
an increase in 2013 of 13 per cent,
supported by a six per cent increase in
quantity sold.(1)
Exploration of BRL’s substantial land
holding is through exploration by BRL
in its own right as well as through the
Company’s established joint ventures
(JV) with Yankuang Resources Pty
Limited (Yankuang) and HD Mining &
Investment Pty Limited (HD Mining).
The JVs allow BRL to share exploration
expenditure and development costs.
Current resources display attributes
similar to the bauxite currently used in a
number of Western Australian refineries,
which are some of the lowest cost
producers in the world.
A fundamental reason for the efficiency
of Darling Range bauxite is due to
its gibbsitic nature that requires low
temperatures and pressure for alumina
refining, thereby reducing refining
costs. Another attractive element of
the Company’s resources is the low
level of silica, especially reactive silica (a
key determinant of caustic efficiency in
alumina refining).
BRL’s development strategy involves
establishment of resources which are
suitable for supply into the bauxite
export market as well as supporting the
local refining of bauxite.
In January 2011, BRL executed JV
agreements with Yankuang Resources
Pty Ltd for the development of bauxite
mining and alumina refining in Western
Australia. As at June 30, 2014 the
JV has defined 265.7Mt of bauxite of
which 218.7Mt is in the JV’s flagship
Felicitas deposit in the northern Darling
Range region. The current resource at
Felicitas is now at a scale to support the
development of an alumina refinery in
Western Australia, which is contemplated
in the Alumina Refinery Joint Venture
Agreement also signed in January 2011.
At this time the Joint Venture has not
commenced the feasibility studies to
support this alumina refinery however
BRL continues to work with its partner
Yankuang on options for development
of local alumina refining of the Felicitas
deposit and this development is a priority
for the Company.
In 2010 the Company entered into a
joint venture with HD Mining a wholly-
owned subsidiary of the Shandong
Bureau No1. Institute for Prospecting
of Geology & Minerals (Shandong) to
explore for bauxite. The JV allows for HD
Mining to fund 100% of all exploration
and feasibility costs for HD Mining to
earn 60% of the bauxite rights upon a
decision to mine.
BRL announced during the year two
maiden resources, at Dionysus (20.3Mt
at 42.1% Total Al2O3) in the Calingiri
region, and the Athena Resource
(22.7Mt at 42.3% Total Al2O3) in the
Company’s emerging Wandering
region in the eastern Darling Range.
The Athena resource was subsequently
updated after the reporting period,
taking the resource to 36.2Mt @
41.8% Total Al2O3. Athena is yet to be
constrained by drilling and as such has
significant upside potential. It is located
in close proximity to the previously
released Ceres Resource of 15Mt, also
in the eastern Darling Range, indicating
the emergence of a potentially new
bauxite district. The HD Mining joint
venture covers some 981km2 of BRL’s
tenements in the northern and
eastern Darling Range regions. Total
resources under this joint venture at the
time of writing stand at 87.8Mt.
The forward plan under this joint venture
is to concentrate on expanding these
resources to provide two significant
projects for possible development of a
DSO export business.
(1) Source: Department of Mines and Petroleum, Mineral and Petroleum Industry 2013 Review
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