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Bonanza HMC production grades for Image in March

Image Resources has dug up further evidence of a very high-grade horizontal core section at its Boonanarring heavy minerals mine north of Perth that could enhance its economics further.

Preliminary average ore feed grade for March was reported to contain about 19% heavy minerals, of “HM”, about 2.5 times higher than the budgeted ore grade of 7.4% HM.

This bonanza grade resulted in the production of 23,000 tonnes of HM concentrate compared to a budgeted HMC production of 20,000 tonnes.

The higher than expected ore feed grade also generated HMC production rates that were near the processing limits of the current HMC cleaning and de-watering circuit from substantially lower than budgeted ore processing rates.

Management said the positive result adds significant weight to the suggestion that the Boonanarring ore reserve estimate may have initially been underestimated.

The company has started a close-spaced drilling program to delineate the likely narrow but very high-grade core in the eastern strand of the deposit.

Drilling, analysis and study work for this program is anticipated to be completed near the end of the June 2019 quarter.

Image Managing Director Patrick Mutz said: “Operational results for March 2019 are clearly outstanding, given the enormous uplift in the average ore grade compared to the expected ore grade as modelled in the ore reserve.”

“Now that drilling has begun to delineate the high-grade core in the eastern ore strand, we eagerly look forward to understanding the significance of the ore grades in the core on the overall ore reserve.”

“In the meantime, … production is substantially ahead of guidance thanks to the higher ore grade, but also due to significantly higher operating availability and HM recovery. This combination could lead to an adjustment to guidance in advance of completion an updated ore reserve.”

Boonanarring is one of the highest heavy mineral grade, zircon-rich, mineral sands projects in Australia with a current ore reserve of 29.3 million tonnes grading 7.5% HMC, though the current production data indicates that this grade may be conservative.

The bankable feasibility study estimated pre-tax project NPV of $235m, IRR of 125% and payback in just 13 months.

However, ramp-up for Boonanarring has been more rapid than the planned six-month period with the company exceeding forecast long-term average production for full-scale production in the second month of the ramp-up period, which could reduce the payback period.

The start of monthly scheduled shipments of HMC in February this year also places Image firmly on the path towards positive cashflow and sustainable profitability.

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