ARCON International Resources has often been described as a small Irish exploration company. Tony O'Reilly junior wants to change that. As the new chief executive of Arcon - he takes up the post in November - he says his aim is to chart the company's course to becoming a medium-size exploration company.

Arcon's main asset is a £100 million lead/zinc mine at Galmoy, Co Kilkenny.

The first ore will be coming to the surface in October and the mine will be in full production by early next year.

Mr O'Reilly takes over from Brendan Gilmore, his father Dr Tony O'Reilly's financial adviser in Ireland. With most of the major obstacles out of the way, the young Mr O'Reilly will be able to turn his attention to building up Arcon.

The company, which is controlled by the O'Reilly family, has several interests including licences in Papua, New Guinea, where there are oil and gas find possibilities.

But it is the Helvick oil field, off the Waterford/Cork coast, which Tony O'Reilly feels shows serious potential. The field has a potential yield of 3-5 million barrels of oil.

He says it could be developed within the next two years. "We have been quietly, working on this for the past three years, he says.

If it can be developed, he says it will generate "tens of millions" of revenue.

An added attraction of the development is that Arcon would be able to carry forward £28 million of tax losses, because of the technical work which has already been done on the field. To develop it would cost $15 million-$25 million, but financing would not be a major issue, he says.

It could be done through a joint venture partner, who would provide a loan or equity finance. "It's quite a robust product," he says.

Mr O'Reilly maintains that "you can make any project fly if you throw money at it" but the company plans to put structures in place which would minimise the impact on shareholders. He says there is still a long way to go on the project.

For the moment its main operational focus is Galmoy. Arcon has already had a rights issue to fund the mine. The issue successfully raised £41.5 million to help fund construction. It cost Dr O'Reilly £22 million taking up his own rights cost him £9.7 million and he also underwrote a further £12.3 million. The O'Reilly family now controls 45 per cent of the company.

The Finnish company Outokumpu, which was the second largest shareholder in Arcon declined to take up its rights and sold out its remaining shareholding in the company earlier this year. The Outokumpu sale took place late one Friday afternoon before a bank holiday weekend and took the market by surprise.

It also took Arcon by surprise. The level at which the shares were discounted surprised Mr O'Reilly. "I thought the discount was severe," he says.

Tony O'Reilly says Outokumpu could not have control and was therefore not interested in maintaining its shareholding.

"There is a premium to be had if you can control the assets," he says. "I suppose I'd have done the same.

Being in control is a principle which is important to Mr O'Reilly. He believes it is better for the shareholders "when you are in control of your own destiny".

Although Dr Tony O'Reilly is not a member of the Arcon board, his son obviously represents his interests in the company. But what if his father wants one course of action taken and he disagrees with it, where does that leave him, especially given his new role?

"The answer to that is, I have a board of directors to answer to," he says.

At 29, O'Reilly is a young chief executive. He has spent five years learning the business at the side of accountant Brendan Gilmore and more recently Jim Tilson, Arcon's chief operating officer. It was a spell in the natural resources sector of Coopers & Lybrand in New York which is said to have aroused his interest in mining.

One of triplets, his other brother Gavin has moved into Independent Newspapers in charge of production, having spent some years at Independent Directories. Gavin successfully turned Independent Directories from a loss-making into a profit-making venture.

Tony O'Reilly admits it is an advantage to bear the O'Reilly name - in so far as the opportunity to work in one of his father's companies arose. But, he maintains, it was "not a pre-ordained right" and none of the children get special concessions. In some ways, he says, having the O'Reilly name puts a bit of extra pressure on him, because sometimes people try to second-guess him.

He says his brothers, Cameron (who is in charge of the Australian newspaper operations) and Gavin have more day-to-day contact with their father. Dr O'Reilly sets objectives and tells them broadly what he wants.

He says their father's experience in business has been very beneficial for them. Dr O'Reilly, he says, has broad financial and management skills. "Tough, but fair" is how he describes him.

O'Reilly is taking over when life at the mine should be relatively straightfoward. The planning permission problems have been ironed out - there was vigorous opposition by various parties along the way - the funding is in place and the mine is virtually complete.

He cannot control the price of zinc on the market, although he believes that the market which has been a bit soft, is about to harden. Nor can he control other external factors such as international exchange rates.

What he can do, he says, is control costs. Galmoy is a modern efficient mine with a very keen cost base and this will give the company a good competitive advantage. O'Reilly believes Arcon is now being taken more seriously as a mineral resources company and Galmoy will help Arcon transform itself.

Those who know him say he has learned the business quickly. "He is a competent young fellow, who puts himself across very well and he has some good ideas about how the business should be developed," says one source.

Brendan Gilmore says Tony O'Reilly has a very strong work ethic and believes that he has benefited greatly from the time going through the process of getting the mine into production.

Some in the industry also wonder about the economics of the mine and believe it will do little more than break even.

However, the finding of a further 2 million tonnes of reserves has made the mine a better prospect. Galmoy now has around 8 million tonnes of lead-zinc. Mining sources also say there is bound to be more reserves there and the company is continuing an active exploration programme in the area.

O'Reilly's immediate task will be to ensure that Arcon's main asset can sell successfully into world markets and make a return for its shareholders. A dividend is still some years away.

"Shareholders are already getting a return," he maintains, "because there will shortly be cash flow of tens of millions of pounds.