Page 4 - Bauxite Resources Annual Report 2014

Dear Shareholders,
The last twelve months remained
challenging for mineral explorers
albeit we have seen signs of cautious
optimism returning, especially in
the bauxite sector. The aluminium
industry generally has seen a gradual
improvement in sentiment over the past
twelve months.
We are optimistic that the global bauxite
and alumina markets will undergo
significant improvement with shortages
of bauxite forecast to occur within the
next two years as a consequence of
projected growth in alumina refining
capacity and the recent ban on
Indonesian bauxite exports. Australian
bauxite producers should stand to
benefit given the geographical proximity
to China. In the last twelve months alone
we have seen the bauxite price rise
from around US$50 per tonne landed in
China to above US$60 per tonne.
In last year’s report I outlined the
Company’s strategic focus. Looking
back on how the Company has gone
in delivering on its strategic focus over
the last twelve months, I can report
as follows:
1. Cut back on the greenfields
exploration of its large tenement
package by focussing and
limiting any future exploration
to those areas which the
Company has identified as highly
prospective.
The Company undertook a strategic
evaluation of the significant tenement
area and ranked the various
tenements on a development
potential basis using internal
resource targets, laterite mapping,
access potential, nature of land
holdings and logistics to determine
where limited exploration expenditure
should be focussed. This targeting
enabled the prioritisation of both the
Dionysus and Athena deposits which
resulted in maiden resources being
announced during the year.
2. Rationalise its tenement holdings
to ensure that only those that
are highly prospective are
kept thereby reducing the total
tenement expenditure obligations.
During the year the focus on
tenement rationalisation without
risk of loss of significant resource
potential was undertaken with the
tenement area of the Company and
its Joint Venture partners reducing
from 17,710km2 last year to currently
stand at 7,905km2. This has achieved
a significant drop in the minimum
expenditure requirements of the
Company but at the same time
expanding the resource base through
low cost targeted exploration.
3. Focus on strategies to monetise
for shareholders the substantial
bauxite resources that the
Company and its JV partners
have established over the last
two to three years.
Whilst the Bauxite Alumina Joint
Venture has not moved as quickly
as the Company would like due
to organisational changes within
our partner Yankuang Resources,
the Company has moved forward
with the Fortuna deposit evaluation
through the undertaking of an
environment constraints study
late last year and has approved
a scoping study and marketing
study which are currently underway.
These are key steps in determining
the feasibility of an export Direct
Shipping Ore (DSO) operation
out of Fortuna. These studies will
include assessment of the use and
availability of existing transport
infrastructure to minimise the
development capital required and
will identify target Chinese alumina
refinery customers for whom we
believe Darling Range bauxite
will provide an enhanced value
proposition by reason of its special
refining characteristics.
2 | Bauxite Resources Annual Report 2014
CHAIRMAN’S REPORT 2014