focused Citadel Resource Group said it is in advanced talks with six big mining houses on the possibility of jointly developing two of its exploration areas in the Middle East. Citadel chief executive Ines Scotland told journalists after a presentation to the Melbourne Mining Club that the six majors, which could not be disclosed because of confidentiality agreements, had completed site tours of its Wadi Shugea and Hail exploration projects in Saudi Arabia and that a deal could be struck by the middle of next year. Saudi Arabia's aggressive reform agenda over the past few years, including a fiscal regime that includes a corporate tax rate of 20 percent, no royalties and full profit repatriation, has made the area very attractive. It was previously closed to foreign interests. Scotland said drilling results on the exploration areas, which are considered prospective for gold and copper, were expected before Christmas. “We wouldn't look to joint-venture any of our projects that we consider we could develop easily,'' she said. “But we have some fairly large projects like Wadi Shugea and Hail and they are the kinds of projects that will take five years to drill out, could send you broke and will cost a few billion dollars to construct. “If we could form a joint venture on good terms, which is very difficult with the majors, then we would look to do so.'' Scotland said four of the company's nine exploration projects were likely to become mines. Citadel's other project is its 64,000-ton Jabal Sayid copper concentrate project, of which it recently obtained 100 per cent ownership for $US112 million ($A113.2 million) in cash and shares. “I think it has been an interesting test for the Saudi Arabian Mining Act because it is OK to have an investment criterion or investment law in place but, when people test it, what happens?'' she said. “We have had a very positive response. No ill feelings out of Saudi Arabia for owning 100 percent of the first copper project,'' she added. Citadel would look at expanding Jabal Sayid, expected to begin production late next year, into an open-pit project by 2014. Citadel's $150 million debt facility, led by Saudi Arabia's Riyad Bank and WestLB of Sydney, is also expected to be complete by the end of the year and will be drawn down in March.
