Gulf Manganese Reports Positive Results from Timor Smelter Study

Gulf Manganese Corporation Ltd. (ASX:GMC), formally Gulf Minerals Corporation Limited, announced the findings from the Timor Smelter Study for the development of a smelting and sales marketing business to produce high carbon ferromanganese alloys in Timor, which will be carried out through GMC’s Indonesian-based subsidiary, PT Gulf Mangan Grup.

As quoted in the press release:

The financial analysis of the Study shows that the project has the potential to return an EDITDA of US $623.8 million over a 20 year period supporting an estimated Net Present Value of US $201.4 million, using an 8 percent discount factor.

The project requires a modest start up capital investment of US $67.5 million, which is staged over 4 years, plus working capital, and provides estimated returns supporting an internal rate of return of 45.6 percent.

As described in the Study, GMC will develop a fully integrated manganese business that provides the following value propositions:

• Sound project economics
• Operating costs at 80 percent industry average cost
• Highest quality ore supply (+50% Mn)
• Producing a premium manganese alloy (78%Mn) • Established port and infrastructure
• Government full support, fiscal incentives of 10 year Tax Holiday
• Board/Management depth of manganese and Indonesian experience
• Global sales network
• Modest capital requirement
• Early cash flow from exporting ore
• Proposed Singapore listing
• Robust dividend policy with distribution of 50 percent of profits

Graham Anderson, chairman of Gulf Manganese, commented:

We are pleased to be able to provide shareholders with this Study as it further validates our early belief of the highly prospective nature of the project and our ability to stage a process of ultimately delivering a highly profitable outcome for all shareholders.

Click here to read the full Gulf Manganese Corporation Ltd. (ASX:GMC) press release.