Perth-based mineral deposits miner Olympia Resources today announced the signing of a long-term zircon supply contract at its flagship mineral sands project at Keysbrook south of Perth.
At prevailing Zircon prices, the contract will be worth approximately $48 million in total revenues over the projected eight year life of the mine site, and the estimated total revenue from all titanium and zircon production from Keysbrook will be around $317 million
Based on a completed bankable feasibility study the capital cost associated with mining at Keysbrook is $31 million, and with confirmed sales the mine is expected to generate net operating cash flows in the order of $96 million over the mine life.
The contract is with a major European zircon miner and at 6,000 tonnes per annum, represents half of Olympia's zircon production from the Keysbrook site.
Zircon is used in the steel industry to line blast furnaces, and also in the ceramics industry and in engines and spacecrafts, where its properties of being extremely hard and corrosion resistant are of significant benefit.
Olympia managing director Peter Gazzard said that it was a significant announcement for the company because it meant it had now sold 85 per cent of the value of products produced from the Keysbrook mine.
"Last year we announced the sale of all of our titanium products from Keysbrook to DuPont - the world's largest titanium pigment producer - and negotiations are well advanced for the sale of the remaining zircon at Keysbrook," he said.
In addition to Keysbrook, Olympia has identified mineral sands resources at other south-west Western Australian locations at Pinjarra, Coolup and Ambergate.
