Matilda may keep Kalimantan zircon

With the support of parent company Stirling Resources Ltd, Matilda Zircon Limited might retain part or all of its zircon assets in Sampit, Kalimantan.

Matilda Zircon (previously known as Olympia Resources) told Australia Stock Exchange (ASX) last week that the difficult cash flow position in the company in late 2008 pushed the company to minimize expenditure, and decided to stop exploration in Kalimantan. Matilda also tried to sell PT Olympia Resources Indonesia along with its assets to reduce expenditure and realize cash from the asset sale.

Matilda has been negotiating to sell PT Olympia and during the second quarter of 2009, the Sampit Plant has been made available for a potential purchaser to carry out an operating trial as part of a due diligence process.

"But with Stirling's support, Matilda is now in a better position with respect to cash flow. Matilda will consider any offer made for PT Olympia, however depending on the nature of the offer may retain part or all of the assets," Matilda said.

Stirling acquired Matilda last year. The initial plan was to produce 5,000 tons per annum of premium grade zircon and further expanded to 10,000 tons per annum in one year.

Global demand for zircon is predicted at 1.35 million tons last year, of which China consumed about 410,000 tons. Per ton price of zircon in the first half was US$850 (FOB). Zircon is mainly used in the production of refractories, ceramics, TV glasses, etc.

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