Image mineral sands mine to make $36m a year for 10.5 years

Image Resources has tabled a prefeasibility study (PFS) on its proposed new Bidaminna mineral sands project in WA that estimates a total EBITDA for its contemplated 10.5-year mine life of $379 million.

Management, which will immediately move towards definitive feasibility studies, says it will cost $194 million to build the mine, which should yield a net present value of about the same figure. The PFS also revealed a maiden ore reserve estimate of 123 million tonnes of probable ore reserves at 1.8 per cent total heavy minerals.

The company’s 100 per cent-owned Bidaminna project is about 25km north-west of its Boonanarring high-grade, zircon-rich open-pit mine and wet concentrate plant.

Management is now evaluating Bidaminna as a standalone greenfield mineral sands project amenable to low-cost dredge mining, with a floating wet concentration plant to recover saleable heavy mineral concentrate – as is the case at Boonanarring – or for separation into final products.

Results from Image’s prefeasibility study (PFS) on Bidaminna, conducted by IHC Robbins, were released today along with its maiden ore reserve estimate.

Highlights of the PFS include a pre-tax NPV of $192 million with a pre-tax internal rate of return of 28 per cent. The capital payback, post-first revenue, is estimated at 3.8 years and Image sees the potential to lower both capital and operating costs given the PFS assumed all new equipment, including a floating, conventional wet concentration plant.

Ways to optimise costs will be investigated in the company’s upcoming definitive feasibility study (DFS) and will likely include the value-adding step of converting ilmenite into synthetic rutile using lower-cost wet concentration plant, single-dredge options and using previously-used equipment. It is also investigating the production of green hydrogen from the hydrolysis of water using its existing solar farm at Boonanarring.

While labour shortages delayed the delivery of the PFS, it afforded management the opportunity to consider the economic impact of incorporating a mineral separation plant, in addition to producing a heavy mineral concentrate.

A decision to integrate the plant is being considered in an independent feasibility study, but management says it expects it would provide economic advantages. The advantages would result from lower logistics costs by eliminating transport expenditure for moisture, silica and non-valuable heavy minerals that are removed in the plant. The company believes there is also the potential to recover monazite as a valuable by-product.

A mineral separation plant would likely be located at Image’s Boonanarring operation so that it can take advantage of the existing infrastructure of water, power (including a solar farm), roads, civils and other facilities.

The DFS, which the company expects to complete sometime next year, will include capital and operating cost optimisation steps, in addition to the inclusion of a mineral separation plant.

The maiden ore reserve estimate for the project, also announced today, came in at 123 million tonnes of probable ore reserves at 1.8 per cent total heavy minerals, for 2.2 million tonnes of total contained heavy minerals.

Additional drilling is planned for this year to determine the heavy minerals grade of 40 million tonnes of “dilution” material. The step could add significantly to the total tonnes of heavy minerals in the ore reserve.

As for project financing, Image plans to fund it from existing cash reserves, along with a combination of debt and equity. The company has relationships with debt providers and has previously secured debt and equity funding for its Boonanarring project.

Off-take agreements will also likely be needed before funding can be secured and Image says it has received strong interest from potential off-takers, including those already connected to the Boonanarring and Atlas projects.

Advancing off-take options, in addition to debt and equity funding options, will be considered in a study Image expects to complete next year. 

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