Strandline secures $18.5m for Coburn

Strandline Resources has made further progress on its mineral sands project in Western Australia, having launched an $18.5 million capital raise to begin early construction works.

The West Perth-based company is developing its Coburn project, located 240 kilometres north of the established mineral sands export port of Geraldton.

Strandline says it will use the proceeds raised from a share placement to advance early development works at Coburn and procure long-lead items, as well as fund the development of its other mineral sands projects in Tanzania.

The capital raise is on top of $150 million in project funding from the Northern Australia Infrastructure Facility (NAIF), which accounts for around 73 per cent of the estimated capital costs for Coburn, amounting to $260 million.

Strandline managing director Luke Graham said the project has “outstanding forecast financial returns in a Tier-1 location”.

He said the placement was well-supported, and would leave the company with $23 million in cash.

Strandline also recently contracted Macmahon Holdings for $23 million to build road access and bulk earthworks at Coburn, as well as secured two thirds of project revenue under offtake contracts.

Coburn is expected to produce 34,000 tonnes of premium zircon, 54,000t of zircon concentrate, 110,000t of chloride ilmenite and 24,000t of rutile.

Strandline will supply ilmenite to The Chemours Company, based in the US, and zircon to both Italy-based Industrie Botassi and Chinese companies, Sanxiang and Nanjing Rzisources for the first five-seven years of production.

Further offtakes are pending, Strandline says.

The company will issue around 44.85 million shares priced at 21.5 cents each, with Shaw and Partners acting as lead manager and bookrunner to the placement, and Morgans Financial as co-manager.

Strandline was trading 6 per cent higher at 12:02pm AEST to 26 cents per share.