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PERTH (miningweekly.com) – The Fungoni heavy mineral sands project, in Tanzania, has been priced at $30-million to develop into a two-million-tonne-a-year operation.
ASX-listed Strandline Resources on Thursday reported that the definitive feasibility study (DFS) for the Fungoni project estimated that 302 300 t of saleable mineral sands product could be delivered over the six-year mine life, generating life-of-mine revenues of A$168.1-million.
The project’s net present value has been estimated at A$42.9-million, and the internal rate of return at 56.2%, while life-of-mine all-in sustaining costs have been estimated at A$71.2-million.
Strandline told shareholders that the DFS represented a significant milestone in the company’s strategy to become a low-cost, high-margin mineral sands producer, and defined a realistic and proven project delivery plan and rapid pathway to commercial production, confirming the ability to complete construction and commissioning within a 12-month period.
The DFS was based on a conventional openpit operation, with multiple stages of advanced process beneficiation and mineral separation to be performed on site to produce three products, including a combined zircon and monazite product, rutile and ilmenite.
Product will be transported to Dar es Salaam for export.
Strandline said on Thursday that with the project feasibility activities complete, the company would look to broaden its customer base prior to establishing a mine and progressing major construction contract negotiations.
The company has also started project financing activities to ensure sufficient funding through to the receipt of first revenue.
Meanwhile, Strandline on Thursday also reported a maiden ore reserve of 12.3-million tonnes, grading 3.9% total heavy minerals for the Fungoni project, which formed the basis of the DFS.
The ore reserve estimate focused on the higher-grade upper domains of the resource, and resulted in a conversion rate of 79% from resource to reserve, MD Luke Graham said.
“This maiden ore reserve provides further evidence of the strength of Fungoni, demonstrating the project is underpinned by an economically compelling initial mine life with scope for growth.”