Strandline Resources has secured two thirds of revenue for its Coburn mineral sands project in Western Australia after signing three binding offtake agreements with international companies.
Strandline Resources has secured two thirds of revenue for its Coburn mineral sands project in Western Australia after signing three binding offtake agreements with international companies.
The agreements cover Coburn’s entire ilmenite and zircon concentrate for the first five years of production as well as a substantial portion of premium finished zircon product, Strandline says.
The combined sales agreements have a forecast value of around $US400 million ($A615 million), representing 66 per cent of the project's revenue over the five-year period.
Strandline has signed offtake agreements with The Chemours Company, based in the US, Italian group Industrie Bitossi, and with Chinese companies Sanxiang Advanced Materials and Nanjing Rzisources International Trading.
Strandline Resources managing director Luke Graham says the contracts support the company’s plan to secure project funding.
“With two thirds of the project’s revenue now underwritten by offtake agreements and the remaining agreements well advanced, Strandline is advancing strongly towards the development of this world-class project,” he said.
Offtakes for the project’s remaining revenue streams will come from the balance of premium finish zircon and rutile.
A definitive feasibility study completed last year revealed the project would generate $1.9 billion in earnings before interest, tax, depreciation and amortisation (EBITDA) over the first 22.5 years of production with an internal rate of return (IRR) of 32 per cent.
The project has a pre-tax net profit of $551 million and potential mine life of 38 years.
It is expected to produce 34,000 tonnes premium zircon, 54,000t zircon concentrate, 110,000t chloride ilmenite and 24,000t rutile.
Strandline will supply ilmenite to The Chemours Company under a five-year sales contract, zircon to Industrie Botassi, also under a five-year agreement, and zircon to Sanxiang and Nanjing Rzisources under a seven-year sales contract.
West Perth-based Strandline is also on its way to developing its first mineral sands project in Tanzania after securing $43 million in funding with an African lender.
Strandline says the financing facility will meet most of the capital costs required for the Fungoni mineral sands project.
Company shares were up 19.8 per cent at 2:25pm AEST to trade at 12 cents.