The award of this Mining Licence paves way for Strandline to progress its strategy to develop a multi-project mineral sands business in Tanzania. Highlights::
- Fungoni is ideally positioned to capitalise on the growing mineral sands market and the emerging supply deficit
- Binding sales contracts in place covering 90% of forecast revenue for the life of mine
- The Tanzanian Government’s decision also paves the way for Strandline to advance its other Tanzanian mineral sands projects, which are globally-significant in scale and valuable mineral
- Strandline Managing Director Luke Graham said: “Securing the green light to develop Fungoni is a major milestone which sets up Strandline to develop an extensive mineral sands business with outstanding projects in Tanzania and Australia.”
Fungoni is favourably located ~25 km from the Dar es Salaam port. The DFS, which was completed in October 2017, confirms the project will deliver strong financial returns, is capital-efficient and produces premium-quality titanium and zircon products, ideally positioned to capitalise from the growing mineral sands market.
The Government of Tanzania has provided its endorsement for the development of the mine, with key project approvals in place, including the Mining Licence and Environmental Certificate.
Key highlights of the Fungoni project include:
- Low development capital cost of ~$30 million, including mine infrastructure, port facilities, working capital, land access, pre-production mining, owner’s costs and project contingencies of 10%
- Outstanding IRR and first quartile revenue-to-operating cost ratio of 2.7
- Binding offtake Agreements signed for 100% of zircon-monazite and ilmenite products for the Life of Mine, based on “take-or-pay” arrangement, representing ~90% of projected project revenue
- Maiden ore reserve of 12.3 Mt @ 3.9% Total Heavy Mineral (THM), with opportunities to grow reserves and mine life, further increasing financial returns
- Project Pre-Tax NPV of $42.9 million (A$57.2 million at USD/AUD 0.75) based on a 10% discount rate and TZMI’s September-2017 commodity price forecast (note, pricing has strengthened since the DFS was released)
- Life of Mine (LOM) revenue of $168 million (A$224 million) and LOM EBITDA of $98 million
- Nominal 12-month design, construction and commissioning period and 2.7 year payback period from start of construction
- Modular relocatable infrastructure with state-of-the-art processing technology which can be re-used at Strandline’s other mineral sands assets in Tanzania
- “Low impact” mining philosophy with progressive backfill and rehabilitation of the mined area; returning the land to pre-mining state
- Fungoni will generate a host of key social and economic benefits including capital inflows to Tanzania, significant job creation, training and job diversity, transferable skills development as well as community engagement programs.
With the award of the Fungoni Mining Licence, the Company is progressing project funding and preparing for project implementation.
Strandline Resources is an emerging heavy mineral sands (HMS) developer with a growing portfolio of 100%-owned development assets located in Western Australia and within the world’s major zircon and titanium producing corridor in southeast Africa. Strandline’s strategy is to develop and operate quality, high margin, expandable mining assets with market differentiation and global relevance.
Strandline’s project portfolio comprises development optionality, geographic diversity and scalability. The other zircon-rich, ‘development ready’ project s is the large Coburn project in Western Australia, as well there is a series of titanium dominated exploration targets spread along 350 km of highly prospective Tanzanian coastline, including the advanced Tanga South project and highly prospective Bagamoyo and Sudi projects.
