106 - The International Resource Journal

FEBRUARY 2013 The International Resource Journal67Australian-based minerals developmentcompany Alara Resources Limited (ASX :AUQ) (Alara) has found the ideal provingground in the Saudi Arabian desertAlara’s 2Mtpa Khnaiguiyah Zinc-Copper Projectis set to become the second-most advanced basemetals project in Saudi Arabia, behind the JabalSayid Copper-Gold Project originally held by formerASX listed Citadel Resources Group Limited (whichwas taken over by former ASX and TSX listedEquinox Minerals Limited in January 2011 which,in turn, was taken over by the world’s largest goldproducer, Barrick Gold Corporations, in July 2011).Results so far have shown the Khnaiguiyah Projectto be very promising – an ideal start to Alara’scampaign to establish itself as an emerging baseand precious metals development company.Indications are that Khnaiguiyah will producean average of 90,000 tonnes of zinc and 6,250tonnes of copper per annum as concentratesin the first four years (with an overall projectedmine life of 14 years). Its location is what ShankerMadan, Alara’s Managing Director, calls “a verylarge, expanding market”. The logistics of the Project,located 200km west of Saudi capital Riyadh,are in good shape with a 33KVA power line and abitumen road and water source nearby.The current JORC Resource (last updated inOctober 2012), is a measured and indicated zincand zinc/copper resource of 25.32Mt at 4.03 percent zinc and 0.17 per cent copper, and a measuredand indicated copper resource of 8.53Mtat 0.64 per cent copper. Alara states that furtherwork on the DFS, such as finalising operatingcosts using local Saudi quotes, optimising minescheduling work and revising Capex costs havebeen finalised as per recent market announcements,and they are confident that it will be completedwithout problems.Economically locatedSaudi Arabia is an ideal investment destination.It does not charge any mining royalties, nor arethere any personal taxes for employees and themining licence granted in December 2010 has a30 year exclusive term. The fuel costs are perhapsthe lowest on the planet. These are huge advantages.Madan finds it a very resource-friendly territoryand points to the near-production stage of theProject as proof of this.Furthermore, the Saudi Industrial DevelopmentFund (SIDF) allows for up to 75 per cent debtrates available with long 5 to 6 year occupancy.Saudi Arabia’s corporate tax rate of only 20 percent is also mining-friendly. In addition there is nocustoms duty on imported capex items and thereis no carbon tax.