Tanzanian HMS Projects

  • Strandline holds 2,000km2 of highly-prospective tenure along the coast of Tanzania
  • Strategically positioned within one of the world’s major zircon and titanium producing corridors (see Figure 1)
  • Over 40% of global mineral sands production is from Africa
  • Strandline has a product quality advantage with high-value zircon, rutile and ilmenite deposits
  • Tanzania is a mature mining jurisdiction, strong regulatory system, with existing coastal infrastructure to support mine development and mineral exports

Figure 1: Map of Africa showing major mineral sands deposit locations

OVERVIEW

Strandline has recognised that there is a large gap in HMS resources between the countries of Mozambique and Kenya where several large to very large mines and resources have been previously discovered and developed. Strandline was first to move and pegged what it considered to be the best mineral sands ground in Tanzania close to infrastructure.

The Company, through rapid systematic exploration, has been hugely successful in discovering multiple major mineral deposits, that are at various stages of project development, including:

  • Fungoni Project: 25km south-east of Dar es Salaam with DFS completed and ready for development
  • Tanga South Project” comprising the Tajiri JORC resources and prospective Pangani tenements, 40km south of the Tanga port in Northern Tanzania, undergoing scoping level assessment
  • Bagamoyo Project, 40km north of Dar es Salaam, where a large-scale discovery shows significant resource potential from surface
  • Sudi Project, in southern Tanzanian 30km from the port of Mtwara, in JV with Rio Tinto, where mineral sands intersection of 30 meters thick provide a strong target for resource growth

 

Figure 2:  Strandline holds a dominant tenure position down the coastline of Tanzania

With the 2015 acquisition of Jacana Resources, Strandline controls a highly prospective exploration tenure position along the coast of Tanzania, within a major world class mineral sands corridor (see Figure 2). These projects are surrounded by some of the world’s major world-class mineral sands mines, located in neighbouring Kenya, Mozambique, Madagascar and South Africa (see Figure 1).

  • A series of 100% held projects spread along 350km of the Tanzanian coastline
  • Exclusive access to only detailed country-wide mineral sands database & specialist team
  • Focus on High Value Mineral Assemblages – proven through drilling of key projects to date
  • Rapid, low cost delineation of JORC resources – two high grade Resources already delineated at Fungoni and Tajiri prospects
  • Major infrastructure advantage with Key Projects close to infrastructure hubs of port and power
  • Envious position for majors wanting entry into the last underexplored piece of southeast African coastline assemblages (Ilmenite, Rutile, Zircon) close to infrastructure that have potential to be rapidly brought into production.

TANGA SOUTH PROJECT:

TAJIRI PROSPECT – delineated mineral resources to develop a step-change project in Tanzania

  • Tajiri mineralised corridor up to 25km long with multiple mineralised zones (see Figure 5)
  • Tajiri JORC Indicated Mineral Resource Estimate of 147Mt at 3.1% Total Heavy Minerals (THM)
  • Contained Heavy Mineral (HM) content rises to 4.6Mt from 2.2Mt, comprising mostly a high-value titanium dominated mineral assemblage:
  • In-situ rutile (339,000t), zircon (201,000t), ilmenite (3,132,000t), almandine garnet (322,000t)
  • Resource confirms Tajiri is a major-scale project with critical mass with all resources start from surface, further strengthening the project’s economic potential
  • Substantial opportunity to grow Tajiri Resources further, with a number of Resources remaining open, and new higher-grade mineralised areas identified, including targets located nearby in the broader Tanga mineralised province
  • “Tajiri has emerged as a game-changer for Strandline with significant scale and growth potential. As the next project in our pipeline behind Fungoni, Tajiri has immense potential to create substantial value for shareholders.” – Strandline MD Luke Graham (refer ASX announcement 16 February 2018)

New thick zones of mineral sands pave way for a significant increase in Resources at Tajiri

  • In June-2018 the Company announced latest reconnaissance drilling at Tajiri has exceeded the Company’s expectations in terms of thickness of mineralisation, grade and strike length
  • Drilling results confirm presence of high-grade mineral sands over a 7.5km strike length and up to 60m thick
  • In light of these outstanding results, Strandline has set a revised Exploration Target for the Tajiri mineralised corridor of 73 to 133Mt at 2.8% to 4.4% THM. This is in addition to the current Indicated Resources of 147Mt @ 3.1% HM already delineated (see ASX release dated 26 June 2018)

Strandline would caution the reader that the potential quantity and grade of the combined Exploration Target is conceptual in nature and there has been insufficient exploration to define a JORC compliant Mineral Resource. It is also uncertain if further exploration and resource development work will result in the determination of a Mineral Resource.

 

Figure 3: Tajiri Mineral Resources - 3D Image (showing target areas for future exploration and high potential expansion of mineral resources)

 

Figure 4: Tajiri Mineralised Corridor within the Tanga South Project area

VUMBI PROSPECT – a newly discovered high grade zone

  • Mineralised zone at least 4000m along strike and up to 400m wide (see Figure 5)
  • First phase exploration drillholes end in mineralisation at 15m
  • High grade core with aircore drillhole results of 15m @ 4.2% THM, and 18m @ 3.6% THM
  • Potential to add to Tajiri resources (located ~5km north of Tajiri North deposit)

Figure 5: Drillhole location map showing the newly discovered high grade Vumbi zone within the Tanga South project

FUNGONI PROJECT

FUNGONI PROJECT – Poised for development

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 (Refer to the ASX Announcement dated 06 October 2017 for full details of the material assumptions underpinning the production target and financial results for the Fungoni Project): 

  • High Grade Mineral Resource: Measured and Indicated – 22Mt @ 2.8% THM
  • 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
  • Ore Reserve underpins an initial 6.2 years of operations at a planned 2Mtpa mining rate
  • Orebody at surface, free-dig unconsolidated sands well suited to conventional open pit dry mining using excavator and truck; resulting in low operating costs
  • Low development capital cost of US$30 million, including mine infrastructure, port facilities, working capital, land access, pre-production mining, owners costs and project contingencies of 10%
  • 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 and awaiting adjudication from the Tanzania Mining Commission;
  • 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
  • Execution planning and project funding activities continued and the project is well positioned to benefit from an improving mineral sands commodity outlook and, in particular, the emerging zircon structural supply gap forecast for the market through 2018 and beyond

 

Figure 6: Fungoni deposit location map

 

Figure 7: Preliminary 3D image of Fungoni Project (Feasibility level design)

 

BAGAMOYO PROJECT

BAGAMOYO PROJECT – Strong drilling results highlight growing potential of Bagamoyo mineral sands project

The Company completed its maiden auger drilling program at the Bagamoyo mineral sands project last quarter with strong results returned. Assay results showed that mineralisation continues below the extensive soil anomaly identified in earlier exploration work carried out.

The Bagamoyo tenements are located approximately 40km north of Dar es Salaam and close to the proposed Bagamoyo port development in Tanzania. Following the success of the recent drill program, the Company is planning an air core drill program over several higher grade zones – results from the program are pending (see ASX release dated 12 March 2018).

Previously-released testwork shows the BG-2 to BG-5 anomalies contain a high unit value assemblage,  comprising 9.1% zircon, 4.2% rutile, 0.8% leucoxene and 60.4% Ilmenite

Figure 8: Bagamoyo THM in soil anomalies with significant auger drillholes results (Black boxes and text) and previously released THM% soil results (white boxes and text)

 

SOUTHERN EXPLORATION REGION: 

SUDI PROJECT  – Assays reveal thick intervals of heavy mineral sands along the 8km anomaly defined at Sudi

The Sudi Project forms part of the Earn-in and Joint Venture Agreement with Rio Tinto Mining & Exploration Limited (Rio Tinto) across the Company’s suite of HMS tenements located in the southern region of Tanzania.  The Joint Venture has enabled Strandline to accelerate exploration activities on the Project Area, with Rio Tinto contributing expertise and funding.

Exploration activities to date have outlined minerals sands anomalies with elevated grades and high-value assemblage from surface with the next phase of drilling to commence across priority targets at Sudi and other areas of interest in Southern Tanzania (see ASX release dated 14 March 2018).

Mineral assemblage testwork from composite samples confirms a high unit value assemblage averaging 11.5% zircon, 4.7% rutile and 64.4% ilmenite; one composite contained 17.8% zircon

Figure 9: Sudi Project drill hole collars and locations of the Trackside and Terrace anomalies

MADIMBA PROSPECT – opportunity for multiple high grade mineralised zones

  • First phase aircore drilling defined continuous mineralised zone at least 2000m along strike and 250m wide with thickness of 9m (see Figure 10)
  • High grade intersections from drilling include0m @ 4.1% THM and 7.5m @ 5.4% THM (see Figure 10)
  • Mineralisation begins from surface and is open at depth
  • Potential for series of deposits over >12km strike defined by radiometric geophysical data
  • High unit value mineral assemblage
  • VHM in the total heavy mineral concentrate up to 98% (ave 81%)
  • Zircon + Rutile in VHM is up to 16.4% (ave 12%)
  • Ilmenite in VHM averages 67.4%
  • Infrastructure – Close to Mtwara Port & Power

 


Figure 10: Map of Madimba prospect drillhole locations and mineralised zones

 

Figure 11: Madimba prospect drillhole cross section highlighting high grade mineralisation from surface to 9m depth