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Fourth Quarter Activities Report

Document date:  Thu 20 Jul 2000
Published:  Thu 20 Jul 2000 14:00:38
Document No:  181584
Document part:  G
Market Flag:  Y
Classification:  Fourth Quarter Activities Report

SONS OF GWALIA LIMITED                        2000-07-20  ASX-SIGNAL-G

HOMEX - Perth                                                         

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ADVANCED MINERALS OVERVIEW

DEVELOPMENT 

During the quarter, negotiations were completed with the Company's
two major customers resulting in the execution of new fixed volumes
and price sales contracts for increased production and sales through
to December 2005. These contracts provide for sales of approximately
10-12 million lbs. of tantalum, in different forms, over a five year
period. As a result of this, tantalum production will be doubled,
over the next three years, from the current production levels of
approximately 1.1 million lbs. per annum to approximately 2.3 million
lbs. per annum.

Both the Greenbushes and Wodgina Mines will be expanded at an 
estimated capital cost of approximately $100 million. 

GREENBUSHES MINE

In line with the Feasibility Study referred to in the last Quarterly
Report, the Greenbushes Mine will be expanded from its current
production levels of 0.7 million lbs. per annum to 1.3 million lbs.
per annum. Increased production will be achieved from expansion of
the existing processing facility from 1.6 million tonnes per annum to
in excess of 2.75 million tonnes per annum. 

Ore will be supplied from the lower grade Central Lode open cut
combined with the development of an underground mine, by way of a
decline, which will access resources below the existing Cornwall
open pit.

Pre-production capital cost for the underground development will be
approximately $30 million along with capital costs of $35 million for
the expansion of the existing processing facilities. Capital costs
have increased due to the 30 per cent increase in target production
levels.

WODGINA MINE      

At the Wodgina Mine, current production levels of approximately 0.5
million lbs. per annum will be doubled over the next two years as a
result of the production capacity being increased to 1.0 million lbs.
per annum.                                              

Throughput capacity will increase to 1.8 million tonnes per annum.
                                    
Capital costs associated with this project are estimated at 
approximately $35 million which includes ancillary infrastructure, new
water supplies and power.

TANTALUM MARKET

The Company is the largest producer of tantalum in the world.  The new
contracts entered into with its customers, and production increases, 
will significantly enhance the Company's position as the primary 
suppliers of ore to the tantalum industry.  The Company currently 
supplies approximately 25 per cent of global demand, which will 
increase following the expansions, reflecting the Company's dominant 
reserve and resource position.

The Company's two major customers will account for all expanded 
production.

Demand for tantalum is extremely strong, primarily driven by the 
electronics industry and the Company will continue to work with the 
industry and the Company will continue to work with the industry to 
provide sustainable production at required industry levels.

GREENBUSHES MINE, WESTERN AUSTRALIA

Tantalum production for the quarter from the Greenbushes Mine was 
192,547 lbs., a record for the operation.

During the quarter a $1.5 million upgrade of the gravity circuit in 
the primary tantalum concentrator was completed and successfully 
commissioned.

Signet Engineering Pty Ltd has been commissed to complete engineering 
design of the proposed plant expansion.  Final design of the proposed 
underground operation will be commenced next quarter.

WODGINA MINE, WESTERN AUSTRALIA

Tantalum production for the quarter from the Wodgina Mine was 146,403 
lbs., a record for the operation.

New sulphide flotation and magnetic separation circuits, commissioned 
last quarter in order to improve product quality, performed up to 
expectations.
   
A new drilling programme to extend the current resource was commenced
at the end of the quarter. The programme is scheduled for completion
in the first quarter of 2001. 

Signet Engineering Pty Ltd has been commissioned to complete 
engineering design of the proposed plant expansion. 

LITHIUM MINERALS 

Production of lithium minerals was 19,454 tonnes for the quarter. 
Sales were 18,716 tonnes. 

KEMERTON SILICA SAND (70%) 

The Kemerton Silica Sand Mine produced 114,677 tonnes and sold 
134,723 tonnes for the quarter, a record for the operation.

A two year sales contract at increased prices has been concluded with 
the project's main customers.

MURRAY BASIN JOINT VENTURE - MINERAL SANDS (50%)

Work commenced on dismantling the Separation Plant situated at Tomago 
in New South Wales ready for transport and reconstruction at Mildura. 
Refurbishment of the dredge and concentrator ready for relocation to 
the Wemen Mine Site is almost completed.

First production of heavy minerals is anticipated in the March 2001 
quarter.

PRODUCTION

PRODUCT           UNIT              13 WEEKS          52 WEEKS
                                    ENDING            ENDING
                                    30/06/00          30/06/00
Greenbushes Mine
Tantalum          Lbs.
- Produced        Ta(2)O(5)         192,547           693,661
- Sold                              206,281           692,523

Wodgina Mine
Tantalum          Lbs.
- Produced        Ta(2)O(5)         146,403           418,306
- Sold                              129,250           411,147

Total Tantalum    Lbs.
- Produced        Ta(2)O(5)         338,950         1,111,967
- Sold                              335,531         1,103,670

Tin               Tonnes
- Produced                              182               600
- Sold                                  217               614

Lithium 
(spodumene)       Tonnes
Minerals
- Produced                           19,454            64,983
- Sold                               18,716            67,599

Kaolin            Tonnes
- Produced                                -                 -
- Sold                                  120             2,474

Kemerton Mine     Tonnes
Silica Sand
- Produced                          114,477           364,641
- Sold                              134,723           391,569

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