A slimmed down Atlas project ore reserve will give Image Resources a higher-grade mineral sands mine which the company expects to turn a tidy profit from the get-go.
Prior to going into a trading halt on Monday Image almost halved its 9.5 million tonne mineral sands project reserve north of Perth to 5.5Mt at 9.2 per cent heavy minerals, a one per cent boost over its 2017 resource.
The remaining reserve boasts an across-the-board mineral increase which now reads 11.9 per cent zircon, 7.9 per cent rutile, 4.9 per cent leucoxene, 1.1 per cent monazite and 53 per cent ilmenite.
Some 4.5Mt of the reserve is proved at 10.6 per cent heavy minerals.
The nip-and-tuck comes due to environmental and Aboriginal cultural heritage concerns in the northern pocket of the project which left the company uncertain about wading through the approvals process in a timely manner.
Environmental approval concerns mainly rest around the two creeks Mount Jetty and Bibby in addition to issues with native vegetation.
The change means Image can now home in on the more lucrative southern parcel which contains higher heavy metal grades and a lower strip ratio.
Atlas has long been waiting in the wings as Image’s replacement mine for the 30.3Mt Boonanarring resource where the company has been digging since 2018.
The company in 2021 made the decision to wrap up its flagship deposit as accessing remaining high-grade sands under a nearby highway would likely have been a drawn-out approvals affair.
Once depleted, equipment from Boonanarring will be carted up the road to Atlas where shovels are expected to hit the sand in the second half of 2023.
The Atlas reserve has a 2.5-year lifespan and is forecast to generate strong cashflow out of the high-value pit centre in its first year of production.
All product is already tied up in offtake agreements for use in the likes of paint, plastics and ceramics.
Atlas is one of a host of parcels of land Image has under its wings in the mineral sands-rich North Perth Basin.
The company is building a case for the 10-year Bidaminna project near Regan’s Ford 80km north of Perth and 30km inland from Lancelin which may become a standalone operation and is currently before WA’s environmental watchdog.
Image also picked up a swag of land off Sheffield Resources last year around Eneabba for $24m in a deal which bolstered the company’s mineral resource by an eye-bulging 234 per cent to 211Mt.
With debt-free books and an ever-growing sandpit north of Perth Image appears to be setting itself up for many years to come in the mineral sands game.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
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