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Tuesday, January 03, 2006

The Mercury: Sydney outfit seen as a 'white knight' [04jan06]

Sydney outfit seen as a 'white knight'

SYDNEY-based mineral company Allegiance Mining NL has spent the best part of the past 10 years examining nickel deposits on Tasmania's West Coast.

For the region's mining-dependent communities, the company's recent decision to move from exploration and assessment to mining gives it the aura of a white knight riding in to save the day.

In October, the West Coast's Renison Bell tin mine closed for the second time in two years, putting 200 people out of work and delivering a massive $280 million blow to the local economy.

Mine owner Bluestone Tin cited low tin prices for the closure and, while it maintained that a price recovery would see the mine re-open, the workforce was terminated and all the mine's major contractors and service providers shut down.

So news of Tasmania's first new mine in 15 years was warmly welcomed.

Although Allegiance is unlikely to fill the entire void left by Renison Bell's closure, it has given hope to the miners in nearby Zeehan by pledging to use local labour wherever it can and as soon as it can.

Allegiance has already constructed a 1200m decline at its Avebury project's Viking deposit, and has future plans for an on-site treatment facility.

It will start production this year, the beginning of what could be a $77 million mine employing 120 people and have a life of up to 20 years -- double earlier expectations after encouraging nickel finds in the area.

At the start of the financial year, Allegiance Mining NL had a market capitalisation of $51 million.

The company listed in 1993, and started exploring for nickel in Tasmania in the mid-1990s, and gained control of a small zinc deposit on the West Coast in 1998.

It found high-grade nickel deposits at Melba Flats, situated north of Zeehan, and also at Avebury, further to the west, in late 1999, which first had the company looking at moving from exploration to mining.

After more nickel finds at Avebury in 2000, the company touted a $30 million nickel mine employing 70 people.

It has since built its Avebury decline and access roads for $11 million.


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