Gunson Resources

Gunson Resources (ASX: GUN) has interests in the Mount Gunson copper exploration project in South Australia, with Xstrata’s subsidiary a sole-funding joint venture partner.

Gunson completed a Definitive Feasibility Study at the end of 2009, the results of which were announced on 7th January 2010. This study revealed that Amy Zone can support a high volume, low cost, long life mining operation producing quality mineral products.

Over the 23.5 year mine life modelled, total revenue is estimated at $A2.2 billion, with an operating cash surplus of $A879 million or $A37 million per annum.

At the long term average exchange rate since 1983 of 72 US cents per $A1, the pre-tax ungeared NPV is $A163 million at an 8% real discount rate, with an IRR of 16.8%.

Approximately 67% of the revenue from the proposed mine is from zircon, for which industry experts TZMI forecast a significant supply shortfall commencing in 2013.

The company is currently seeking to attract a minority partner to help fund the mine development, in exchange for an assured long term supply of zircon.