Companies: GIP   

Tantalum developer Gippsland has agreed to supply German group HC Starck with six million lbs from southern Egypt over ten years.

Under the deal, Starck is to take 600,000 lbs of tantalum pentoxide, Ta205, from Western Australia-based Gippsland's Abu Dabbab project every year for a decade. The parties are keeping the price confidential, but Gippsland, headed by entrepreneur Jack Telford, says it expects revenues of more than £140 million from Abu Dabbab's tantalum over ten years and adds the agreement contains price escalation clauses, 'which will largely underpin the ongoing viability of the project'.

The AIM-quoted company adds it also expects Abu Dabbab to produce about 1,530 tonnes of tin metal a year and generate about £125 million from that source over ten years. Gippsland suggests the capital cost of the project could be in the region of £62.5 million, which it envisages funding with 80 per cent debt and 20 per cent equity.

At 5p, up 0.75p today, Gippsland's shares value the company at £13 million. They could go further, if Abu Dabbab continues to meet expectations.

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Gippsland Ltd	AIM	£6.86m	2.12p	-0.25p
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Other company articles:
Resource boost at Gippsland			09/04/2008
Gippsland clinches tantalum deal			13/11/2007
Gippsland lines up tantalum deals			19/01/2007
Gold cheer for Gippsland			04/04/2006
Finance progress for Gippsland			07/03/2006