Sandy Ridge Project Proceeds to the Next Stage

Key points:

• Tellus Board approves Sandy Ridge kaolin clay mine project proceeding to the next stage, which is capital raising to complete feasibility studies and regulatory approvals
• The project has a quality resource and strong technical and commercial business case
• Capital raising to fund completion of regulatory approvals and Definitive Feasibility Study
• Studies to trigger detailed community consultation in late 2014.

The proposed Sandy Ridge kaolin clay mine reached a major milestone this week, with the Tellus Holdings Board approving the project moving to the next stage.

The proposed kaolin mine is 140 kilometres north-west of Kalgoorlie in West Australia.

“The Board’s approval of the project’s business case follows successful drilling, technical and commercial studies and strong interest from potential clients,” Tellus Holdings’ Managing Director Duncan van der Merwe said.

“We have known from the start that we have a quality, thick kaolin deposit.

“We awarded a contract in January to Wallis Drilling to drill the clay bed and NAGROM, EPMS and UK based First Test Minerals to confirm the grade and potential of the resource.

“The last hurdle was to ensure the project stacked up technically and commercially. We have engaged domestic and international experts to confirm the mine to port design and the business case financial assumptions, with a detailed business case signed off this week by the Tellus Board,” Mr van der Merwe said.

“We will now move to capital raising for the next stage of the project, which is to commence our regulatory approvals, and Pre-Feasibility Study and Lodge a Mineral Lease Application with the Western Australian Government,” he said.

“The final investment decision will be made once we complete the feasibility studies, regulatory approvals and move to final capital raising for the construction stage,” he said.

A maiden 2012 JORC compliant Resource Statement will be announced shortly.

The voids left in the mine will be used to safely recycle, store or dispose industrial waste, Mr van der Merwe said.

Subject to approvals and a final investment decision by the Tellus Board within the next 19-21 months, construction of the mine is likely to start early 2016.

Other recent developments at Tellus include:

• the appointment of a new Chairman, Philip Garling, who has previously served as Global Head of Infrastructure at AMP Capital Investors and Chief Executive of Lend Lease Capital Services. His other directorships include Australian Renewable Fuels, Downer EDI, Charter Hall, Networks NSW and Water Polo Australia;
• the appointment of Independent Non-Executive Director Ron Sifton, who has served for 27 years as Chief Financial Officer and Executive Vice President of Newalta Corporation, Canada’s leading waste services company;
• the appointment Independent Non-Executive Director Dr Nikki Williams, who has held senior roles in the NSW Minerals Council, Australian Coal Association, Shell, Exxon, Esso, NSW Women in Mining Network, CSIRO Business Advisory Board and Australian Indigenous Education Foundation.

Tellus Holdings Ltd (“Tellus”) is an Australian exploration company in mine evaluation stage with an attractive portfolio of rock salt and kaolin deposits. Tellus’ flagship projects are a proposed underground rock salt mine in the Northern Territory and a proposed kaolin mine in Western Australia. Tellus is the parent of a group of companies that plans to be involved in mine building, processing and the sale of industrial and edible salts, associated salt minerals and kaolin. Proposed complementary businesses include the safe storage in voids created by mining as is done in countries like the UK, EU, USA and Canada.

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