MZI Resources has started development of its Keysbrook Mineral Sands Project located 70 kilometres south of Perth in Western Australia with first production expected in December 2015.
MZI Resources in the final three months of 2014 company executed and entered into finance agreements for a total project funding package of US$110 million with finance providers, RMB Australia Holdings and Resource Capital Fund VI L.P.
Two months ago the board formally resolved to confirm its Final Investment Decision and proceed with the development of Keysbrook after it had satisfied all conditions precedent to access project funding.
Keysbrook is forecast to produce on average, 96,000 tonnes per annum of mineral sands products.
This comes from a high value JORC ore reserve of 26 million tonnes with in-situ THM of 670,000 tonnes grading 27.8% L70 (70% titanium dioxide), 46.6% L88 (88% titanium dioxide), 14.6% Zircon, and 11% other minerals.
About 85% of the project’s annual production by volume has been sold under long term contracts.
The project will employ a very low CAPEX and draw upon a very well developed local infrastructure that is very conversant with processing mineral sands and use of simple and low risk processing technology.
Ore mining rate is set at 4.5 million tonnes per year to an average depth of 2.2 metres and no strip ratio for very low cost open pit mining.
Annual EBITDA has a base case of $44 million per year that is derived from a low OPEX of $331 per product tonne. The project is funded with a development cost of $69.6 million and pre-operations cost of $6.2 million.
There is upside to the project with low impact exploration using auger methods extending Keysbrook mineralisation beyond the currently approved mining areas and Resource boundary.
Source: Proactive Investors Australia
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