03/03/2021 - 17:00

Strandline secures new Coburn sale

03/03/2021 - 17:00

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Strandline Resources says it has secured more than 90 per cent of the forecast revenue for its Coburn mineral sands project in WA, after signing a new offtake agreement with a UK customer.

Strandline secures new Coburn sale
Strandline has secured about $US600 million worth of sales for its Coburn project. Photo: Strandline Resources

Strandline Resources says it has secured more than 90 per cent of the forecast revenue for its Coburn mineral sands project in Western Australia, after signing a new offtake agreement with a UK customer.

The deal, signed with Stockton-based chemicals business Venator Materials, covers 100 per cent of the rutile to be produced at Coburn, near Geraldton.

Strandline now has about $US600 million – or more than five years’ worth – of secured sales.

The company closed up nearly 12 per cent on Wednesday's news to trade at 24 cents.

It says the balance of Coburn's forecast revenue will come from premium finished (ceramic grade) zircon, which Strandline is holding back for sale under shorter-term spot market contracts.

The $260 million project is also expected to produce zircon concentrate and chloride ilmenite.

Strandline has signed binding offtakes for all of Coburn’s ilmenite and zircon concentrate, and some of its premium zircon. Its customers include Spain’s Chilches Materials, Italian Group Industrie Bitossi and US-based The Chemours Company.

Strandline managing director Luke Graham said the new offtake further endorsed the Coburn project, which is supported by a $150 million loan from the Northern Australia Infrastructure Facility (approved in June 2020).

“With over 90 per cent of the project’s revenue now underwritten by binding sales contracts with major customers and a significant portion of the development funding secured via the NAIF loan, Strandline is on track to become Australia’s next world-scale mineral sales producer,” Mr Graham said.

An updated definitive feasibility study, completed in June, revealed Coburn held a net present value of $705 million and internal rate of return of 37 per cent.

The project is expected to generate $1.9 billion in underlying earnings during its 22.5 years of production.

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