Mineral sands miner Iluka Resources Ltd has announced the go-ahead for a $30 million project in the United States as it continues engineering studies on its major growth projects in Victoria and South Australia.
Mineral sands miner Iluka Resources Ltd has announced the go-ahead for a $30 million project in the United States as it continues engineering studies on its major growth projects in Victoria and South Australia.
Managing director David Robb said the definitive feasibility study for the Murray Basin Stage 2 project in Victoria was largely complete and supported investment in the project.
"I have, however, asked the project team to undertake further focussed value engineering reviews and project risk mitigation activities, while at the same time moving to secure long lead items," he said in a statement.
Iluka also announced today that it would introduce a currency hedging programme. The group has previously announced that its earnings would be adversely affected by the rising value of the Australian dollar.
The full Iluka statement is pasted below:
Brink Development, Virginia
The Board of Directors of Iluka Resources Limited ("Iluka") today announced capital approval for the development of the Brink mineral sands deposit, associated with the company's Virginia operations in the United States.
The development of the Brink deposit provides Iluka with access to 1.2 million tonnes of Heavy Mineral Concentrate ("HMC") and is expected to produce approximately 780,000 tonnes of ilmenite and approximately 157,000 tonnes of zircon.
The capital expenditure for the project is US$27.5 million, with project development to commence in January 2008
and first production from the deposit expected in April 2009. The development of the Brink deposit extends the economic life of the Virginia operations from 2012 to 2014 and serves to offset the reduction in earnings and cash flow post 2008 associated with the decline in the Old Hickory deposit. The project entails the relocation of the Old Hickory wet concentrator plant 48 kilometres to the south-west; the establishment of associated infrastructure and the initial mine development. Final processing of product occurs at Iluka's Stony Creek Minerals Separation Plant.
David Robb, Iluka's Managing Director stated: "The development of Brink represents a low risk, brownfield replacement for mining operations at the Old Hickory deposits in Virginia. Production from Brink will largely replace production from the Old Hickory concentrator. The Concord concentrator, also at the Old Hickory ore body, will continue to operate through to mid 2012. The Brink project has a high internal rate of return and will generate a strong EBIT and cash flow contribution over its economic life."
The Brink ore reserves include an estimated 1.2 million tonnes of Heavy Mineral ("HM") a HM grade of 9.7 cent, an ilmenite assemblage of 69.4 per cent; zircon assemblage of 14.6 per cent and with a rutile/HyTi assemblage of 3.2 per cent.
Murray Basin Stage 2 and Jacinth-Ambrosia
Iluka's major growth plans are centred on the Murray Basin Stage 2 development, Victoria and the Jacinth-Ambrosia project in South Australia.
According to David Robb: "The Murray Basin Stage 2 definitive feasibility study is largely complete and supports investment in the project. I have, however, asked the project team to undertake further focussed value engineering reviews and project risk mitigation activities, while at the same time moving to secure long lead items. I believe that the additional time taken in pre-execution planning will be time well spent given that the overall project schedule will be maintained, with first production still expected in the first quarter of 2009. The definitive feasibility study will be completed early in the New Year and be presented to the first Board meeting for 2008, in February."
"At this time, I expect to release an update on progress for the Jacinth-Ambrosia project," Mr Robb said.
