New Client Profile – Caspian Holdings plc

Jan 19, 2012

Caspian Holdings is back on the growth trail after a period of relative quiet, forced largely by controversially losing its Kazakhstan oil assets in 2010. Thanks to the Chairman in particular, cash was found to keep the Company going and provide an opportunity for shareholders to recover lost value. This is hoped to come from a new US$1m project acquisition, an exciting Spanish Tungsten exploration and low-cost, high margin development project called La Parilla.

The Company now has full rights to exploit 2.5m tonnes of tungsten tailings, from which commercial production is thought possible within 12-18 months, providing payback of €1.5m capital expenditure within 10 months. The tailings project NPV of €2.27m compares very favourably to the project acquisition value. Pilot tests are already underway, with good recovery rates demonstrated.

In addition, the Group has just renegotiated an option, in staged payments, over rights to develop and exploit the formerly producing mine from which the tailings were created. The La Parilla Mine has a resource estimate of 36 million tonnes grading 0.09% tungsten and an NPV of approximately €25m. Tungsten is categorised a “critical raw material” by the EU and we believe holders of commercial projects will find themselves holding a strategic asset. Tungsten contract pricing has doubled in the last three years as the world’s largest producer, China, has evidently moved to a net importer position. News flow should be strong, given the potential to gear for early production from the Tailings project.