Name of the Project
Mutamba mineral sands project.

Location
The project is located in the Inhambane province of Mozambique.

Client
The project is being developed by Savannah Resources and Rio Tinto.

Savannah is the operator of the Mutamba project, which it is developing in a consortium with Rio Tinto.

Savannah holds a 20% interest in the consortium and can increase its equity to 35% upon the delivery of a prefeasibility study (PFS), which is currently under way, and to 51% upon the delivery of a definitive feasibility study.

Project Description
A scoping study on the project has concluded that there is potential for a financially robust, long-life mineral sands project that is expected to provide excellent life-of-mine financial returns with relatively modest capital requirements. The project combines Savannah’s Jangamo project with Rio Tinto’s adjacent Mutamba project, which includes the Jangamo, Dongane and Ravene deposits, as well as the Chilubane deposit, which is located 180 km south-west of the Mutamba project.

Mutamba has an initial mine life of 30 years, based on a resource of 451-million tonnes grading 6% total heavy minerals and on a conceptual mine plan using 33% of the indicated resource and 67% of the inferred resource. Average yearly production, following ramp-up to a 15-million-tonne-a-year mining rate, has been estimated at 456 000 t of roasted ilmenite and 118 000 t of nonmagnetic concentrate (rutile and zircon).

Dozer trap mining methods have been selected for the project. Mined ore will be slurried and pumped to the nearby primary concentrator plant (PCP). The PCP has been sized for a nominal feed rate of 2 000 t/h to produce 800 000 t/y of heavy mineral concentrate (HMC), with a heavy mineral grade of more than 90%.

The PCP tailings will be pumped directly back into the mine void. The HMC will be trucked to the mineral separation plant (MSP), where it will be fed into the mineral separation circuit for processing to produce a magnetic roasted ilmenite product and a zircon-rich nonmagnetic concentrate. 

The MSP has been sized to process HMC at 105 t/h to produce about 70 t/h of roasted ilmenite and 15 t/h of nonmagnetic concentrate. Products will be trucked to the export facility and stored in a shed adjacent to the barge-loading facility before being exported.

Potential Job Creation
The project will have an expected final workforce of 332 people, with more than 1 000 indirect jobs expected to be created. The consortium is targeting 95% local participation once operations become established.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $245-million and an internal rate of return of 23%, with a payback of four years.

Value
Preproduction capital expenditure has been estimated at $152-million, plus contingency of $7-million.

Duration
Production is targeted for 2020.

Latest Developments
Mozambique’s Ministry of Mineral Resources and Energy is “actively” considering the granting of three mining lease applications that form part of Aim-listed Savannah Resources’ Mutamba heavy mineral sands project.

The mine lease applications cover 417.32 km² and comprise the Jangamo, Dongane, Ravene and Chilubane deposits.

“While we await the outcome of government analysis, we continue to make progress in advancing some critical work streams at Mutamba. A sequenced scheduling of PFS activities has been agreed upon and key initial studies are either under way or about to start,” Savannah CEO David Archer has said.

The studies include hydrology studies, port options and the collection of 10 t of sample material to aid in final product determination.

“These are all essential elements that will inform the PFS, the results of which will guide us in the infrastructure, power, mine planning and process plant requirements. It is an exciting time as we see the future mine plan form and take shape,” he has said.

The applications, which are being reviewed, were submitted to the Ministry on January 18 and the mining cadastre reopened on April 2 following its yearly closure.

The Ministry has six months from the date of the cadastre reopening to respond to the applications, although this can be an iterative process, Savannah has noted.

Mining leases are generally awarded for a term of 25 years and can be renewed at the end of their terms.

Following extensive testing, the pilot plant has been placed under care and maintenance, as planned, while a bulk sample is obtained, and community development activities continue as part of the licensing process.

In addition, Savannah has noted that the scoping phase of the PFS is now well advanced. The initial key studies for the PFS have been sequenced, with roll-out under way, including further roasting testwork and a 10 t bulk sample to be collected from the Matilda licence.

Key Contracts and Suppliers
AML (turnkey reassembly and commissioning of the pilot plant, including site survey; installation of a site security fence with an access lockable gate and security post; bulk earthworks; preparation of the old railway line to be used as the construction access road; and civil works, structural reassembly and processing equipment assembly).
TZMI (Phase 1 PFS).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Savannah Resources, David Archer, tel +44 20 7117 2489.