Lead Prices Continue Their Climb

What does all this mean for Meridian and the Lennard Shelf Project? The increase in the lead price is very significant for the Lennard Shelf Project. When the project has been in production in the past, the lead price has usually been a half to a third of the price of zinc. However, several of the resources on the project actually contain more lead than zinc and therefore their value has been less, due to the historically lower lead price in comparison to zinc. I don’t think that at any time in the past has the Lennard Shelf been in production when lead and zinc prices had parity or that lead was worth more than zinc. If lead prices are sustained at these levels then the potential cash flow from the higher lead resources on the project will be significantly higher than in the past and this will have a very positive benefit on the project economics. It is going to be very interesting to see what happens with zinc and lead prices over the next 12 months but at the moment all the momentum in these prices is working for us.

On 19 August Meridian signed the formal Tenement Acquisition Agreement with Lennard Shelf Pty Ltd for the Lennard Shelf Zinc and Lead Project. There are a number of formalities which need to be completed in order to finalise the acquisition of the project. One of these formalities is to get the consent of the Mines Minister in Western Australia for the transfer of the tenements comprising the project over to Meridian. In the last few days we have received this consent which has happened in near to record time. At this stage we are aiming for being able to complete all the formalities for the acquisition of the project by early October.

Up at the Lennard Shelf project site we are now essentially ready to commence the large drill program we have planned for the Kapok and Kapok-West resources. A significant amount of work had to be done to have adequate facilities in the field to house the people who will work on the drilling program and to handle all the diamond drill core. Work was also needed on the airstrip so that it is 100% safe to use. While there are still some issues to attend to, we are now ready for the start of the drill program and all we are waiting on is the final approval by our shareholders at a General Meeting of the acquisition of the Lennard Shelf Project. At this stage we are on track to hold this shareholders meeting in early October. I am very confident that our shareholders will approve the acquisition of the Lennard Shelf Project and the $10.5M investment in to Meridian by NWME.

In six months time our goal is for Meridian to be a very different company to what it is at the moment. We want to aggressively assess the Lennard Shelf Project and its potential to put some of the known mineral resources back in to (or in to) production. It is important to the management team that we put ourselves in the top tier of emerging producers in Australia. While exploration and growing our resource base through good exploration will always be important to Meridian we do want to move in to the ranks of mineral producers as soon as possible and with the Lennard Shelf Project we believe we have the project to make that happen.

Regards

Jeremy Read (3 Sept 2009)
 

3 Sep 2009