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Gippsland ready for first tin shipment from Egypt

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The first shipment of tin from Australian resource company Gippsland Ltd's Abu Dabbab alluvial project in Egypt will take place in the fourth quarter of its financial year, or the three months ending June 30 this year.

During the three months ended March 31, mining commenced at the alluvial project on time and on budget, according to the company's activity report for the third quarter of its financial year. 

Commissioning at the project is now close to completion, Gippsland said, and drilling is about to begin in Eritrea.

At the Abu Dabbab alluvial project, the mining contractor was ready on site on February 17, and began work on February 18.

Site manning has reached full strength, Gippsland said, with operations on a round-the-clock basis by the end of the reporting period.

The product finishing, bagging and despatch facilities are all but complete within the Free Zone area, the company added, in preparation for shipment.

Later in the period, Gippsland gained approval from Tantalum Egypt to enter a toll smelting contract for the treatment of cassiterite output from alluvial operations.

Gippsland has said it expects final testing to be complete during the first two weeks of May, pushing the first project shipment into the coming quarter. A separate announcement is to be made as soon as this is achieved.

Adobha Resources
In Eritrea, the company's 100% owned subsidiary Adobha Resources (Eritrea) holds the Adobha exploration licence covering 2,100 sq km, and the Gerasi South exploration licence covering 100 sq km.

During the quarter, the company carried out a gravity survey within the Adobha project over all of the high and medium priority electromagnetic anomalies identified in an airborne survey in 2011.

Gippsland also carried out geological mapping, additional geochemical sampling and site access preparation work ahead of drilling, expected to start in the coming days.

In January, the company also divested its stake in the Heemskirk tin project, in Tasmania. 

Explorer-developer Stellar Resources acquired the 40% Heemskirk by Gippsland in exchange for 43.5 million Stellar shares, as well as a royalty.

Stellar Resources' shares were trading at 8 Australian cents (8.5 cents) on the Australian Stock Exchange (ASX) on Tuesday January 31, making the stake worth about A$3.48 million ($3.7 million at the time).

Financing
In terms of financing, discussions with major banks and sovereign funds located in the Middle East and North Africa are under way, Gippsland said.

On February 7, it also announced a rights issue to shareholders at the record date of February 16, with one new share for every five existing shares.

The aim was to raise about A$2.44 million ($2.55 million) before costs, at an issue price of 1.5 Australian cents per new share. The issue was completed in March 2012.

In total, 78%, or more than 127 million, of the shares on offer were subscribed for. The remaining 35 million shares were taken up by sub-underwriter Gandel Metals.

As part of its capital management programme, Gippsland also set up a sale facility for "unmarketable parcels" of its shares.

These parcels of shares are those valued at less than A$500 as at the close of trading on the Australian Stock Exchange (ASX) on March 26 this year.

Shareholders holding an unmarketable parcel have been sent a notice telling them to advise the company's share registry by 17:00 AWST on May 11 that they want to keep their shares. Otherwise, the shares will be sold, and they will be given the proceeds.

Gippsland's shares were trading at 1.5 cents each as of the close of trading on April 30 on the ASX.

Claire Hack
chack@metalbulletin.com
Twitter: @clairehack_mb

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