Gindalbie Metals announces new CEO; increases Karara cost

Gindalbie Metals has announced the appointment of Tim Netscher as its new managing director and CEO from the end of April 2011.

He replaces Garrett Dixon, who oversaw the development of Gindalbie’s Karara Iron Ore project in Western Australia to the point where it is ready to ship DSO hematite this month and magnetite in 2012.

Netscher is currently the senior vice president for Newmont Mining’s Asia Pacific region.

Gindalbie has also released an updated construction cost estimate for the Karara project, which already recorded a massive cost blowout of 20% to its operation last year.

According to the company, it expects the construction cost of Kara to increase by an additional 30% following the review.

However, it believes that this additional infrastructure funding will “result in cost saving over the long term.”

Gindalbie went on to say that it will also result in the first production of magnetite coming two years earlier than scheduled.

George Jones, Gindalbie’s chairman, said that “all projects in Western Australia are currently subject to significant cost escalations and this situation is almost certainly going to get worse as the resources boom strengthens, pushing up the price of both labour and materials.”

He went on to say that this 30% increase “will also mean that the Karara project will largely avoid what will almost certainly be an even far more damaging inflationary environment for construction projects as the West Australian resources boom gathers momentum. Karara will, I believe, be spared the worst of this costly environment while at the same time generate strong revenues.”

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