Strandline Resources Ltd advises that following strong progress on a number of fronts, it is set to complete the DFS on its Coburn mineral sands project in Western Australia early next year. The updated DFS will put Coburn on track for a development decision in the first half 2019, with first production potentially then scheduled for second half 2020. Key project approvals are already in place, including mining licence, environmental approval and native title agreements; update of construction permits is underway.
- DFS findings will underpin discussions with potential offtake and development partners; strong interest from potential customers driven by premium product quality and forecast supply deficit
- Bulk test work using modern processing technology identifies improved design efficiencies
- JORC Mineral Resources and Ore Reserve Statement expected to be upgraded as part of the DFS
- DFS pricing across major works packages received to date shows potential operating cost savings compared to previous estimates
- Coburn has a high basket price of zircon and high-TiO2 minerals and +19-year mine life based on its large JORC Resource
- Positive support for Coburn project from the local communities and Shark Bay Shire Council, with Coburn highlighted as a key part of the region’s Economic Prospectus
- Strandline is well positioned to commercialise two major projects over the next few years: Coburn in WA and Fungoni in Tanzania, with combined production estimated at ~5% of global annual zircon and ~13% of global annual chloride grade ilmenite.
Optimisation work relating to mine planning, process design and product logistics is progressing well, with new value-add and de-risking initiatives being incorporated. Modern mining and processing technology combined with favourable industry dynamics are set to enhance the projects economics.
The large JORC Resource is 979 Mt at 1.26% HM and Ore Reserve of 308 Mt at 1.2% HM. The valuable mineral assemblage contained in the Coburn orebody translates into a high basket price, comprising zircon and a range of high-titanium minerals – 23% zircon, 48% chloride grade ilmenite, 7% rutile and 5% leucoxene.
The previous definitive-level study was produced in 2013 and a subsequent Cost Review Update undertaken in 2015 indicated an NPV8 for the project of A$306 million, with potential significant upside leveraged to improving market conditions. The 2015 review showed Coburn’s pre-tax IRR is forecast to be 26%, generating A$2.9 billion of sales revenue over a projected 19-year life, with mining rate of 23.4 Mt/y. The average product pricing assumptions used in the 2015 review was zircon $1327/t, ilmenite $250/t and HiTi $927/t, based on free-on-board (FOB).
