Fungoni Mineral Sands Project, Tanzania
The zircon-rich Fungoni Project is the Company’s most advanced Tanzanian based development, with a full DFS recently completed, product offtakes secured and final project approvals progressing.
The Fungoni DFS confirms the project will deliver strong financial returns, has a high unit value product suite, is capital-efficient and demonstrates the strategic potential of the Company’s portfolio of mineral sands assets in Tanzania.
The project is favourably located ~25km from the Dar es Salaam port in a growing commercial/industrial district and will benefit from existing infrastructure in the region.
Key highlights of the Fungoni DFS include:
- Low development capital cost of USD 30 million, including mine infrastructure, port facilities, working capital, land access, pre-production mining, owner’s costs and project contingencies of 10%;
- 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;
- Outstanding Internal Rate of Return and revenue-to-operating cost ratio of 2.7 (first quartile);
- Project Pre-Tax NPV of USD 42.9 million (AUD 57.2 million at USD/AUD 0.75) based on a 10% discount rate and TZMI’s September-2017 commodity price forecast;
- Life of Mine (LOM) Revenue of USD 168 million (AUD 224 million) and LOM EBITDA of USD 98 million;
- Binding offtake Agreements signed for 100% of zircon-monazite and ilmenite products for the Life of Mine, based on “take-or-pay” arrangement with letter of credit, representing ~90% of projected project revenue;
- Environmental Certificate granted and Mining Licence Application submitted;
- 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; and
- 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 programmes.
Coburn Mineral Sands Project, Western Australia
The Coburn Mineral Sands Project is a large zircon and titanium rich deposit, located 250km north of the major minerals port of Geraldton in Western Australia. The project has key project approvals already in place, including mining and environmental approvals and native title heritage agreements.
The project is currently undergoing a revised-DFS to redefine the technical and commercial aspects of the project in preparation for a Final Investment Decision (FID) to develop the project. It is underpinned by a Mineral Resource (JORC 2004) of 979mt @ 1.26% heavy mineral (HM) grade with contained HM of 12.3Mt. The Ore Reserves estimate of 308Mt (January 2010) represents a exceptional high-value mineral assemblage of 24% Zircon, 7% Rutile, 5% Leucoxene and 48% Ilmenite.
Coburn is one of a very few large-scale mineral sands projects world‐wide at this advanced level of development readiness. The salient points of Coburn are as follows:
- Low risk mining jurisdiction of Western Australia and close to the dominant mineral sands market of Asia;
- Large scale project delivering strong economics, with +19 year mine life at 23.4Mtpa mining rate;
- High quality product suite covering zircon (66% ZrO2), chloride ilmenite (62% TiO2) and HiTi90 (90% TiO2);
- Project approvals in place (environmental, native title, heritage & mining) and essentially, development-ready;
- Access to existing infrastructure (roads, port and gas pipeline) and established professional services industry;
- Extremely low strip ratio and slimes content – simple and efficient mining and tails handling;
- Conventional dry mining, mineral extraction and rehabilitation methodologies; and
- Attractive revenue to operating cash cost ratio (RC ratio) with opportunity to improve through implementing value improvement initiatives during the DFS.
Tanga South (Tajiri) Mineral Sands Project
The large-scale Tanga South (Tajiri) deposits are in northern Tanzania near the Port City of Tanga, some 60 km to the north. The Company has performed multiple stages of exploration to define the higher grade mineralised zones along Tajiri’s 20km mineralised corridor.
Tajiri’s JORC Indicated Mineral Resources stand at 147Mt at 3.1 % THM, containing in-situ valuable minerals of 339,000t rutile, 201,000t zircon, 3,132,000t ilmenite and 322,000t almandine garnet. At least three (3) of the defined Mineral Resources remain open including Tajiri T1, T3 and the channel-style target.
Latest reconnaissance drilling at has exceeded the Company’s expectations in terms of thickness of mineralisation, grade and strike length and the results point to a potential large increase in Tajiri resources.
Tajiri is Strandline’s second major mineral sands project in Tanzania behind the ‘development-ready’ Fungoni project. Further resource drilling and project scoping is underway.
Pipeline of Growth Projects, Tanzania
To complement Fungoni, Tajiri and Coburn projects, the Company has also made some significant mineral sands discoveries at the Bagamoyo and Sudi Projects in Tanzania, adding to the portfolio value.
The Sudi project is located some 30km by sealed road to Mtwara port and forms part of a JV with Rio Tinto, who are sole funding exploration in Southern Tanzania. Sample testwork confirms Sudi has a high unit value assemblage averaging 11.5% zircon, 4.7% rutile and 64.4% ilmenite; one composite contained 17.8% zircon. Next on the agenda is a resource drilling campaign to define to the extents of the mineralisation.
Strandline’s 100%-owned Bagamoyo tenements are located approximately 40km north of Dar es Salaam and close to the proposed Bagamoyo port development in Tanzania. In early 2017 the Company undertook a widespread soil sample program over prospective radiometric and topographic features which identified significant areas of higher grade mineralisation. The Company then followed up with a reconnaissance auger drill program designed to rapidly assess the potential thickness of sand across priority targets and also verify the high-grade results generated from the soil sampling program.
Laboratory THM analysis results from this auger program reaffirmed the highly prospective nature of the Bagamoyo region. The results show widespread heavy mineral sand enrichment over the various soil anomalies BG-2, BG-3, BG-4 and BG-5, with multiple holes showing higher grade THM at depth. Bagamoyo is emerging as a significant new Tanzanian mineral sands province and the Company will continue to perform exploration and evaluations to define the deposits.