Shares in Matilda Zircon skyrocketed today after it announced it will start mining operations at its Tiwi Island zircon project within a month.
Shares in Matilda Zircon skyrocketed today after it announced it will start mining operations at its Tiwi Island zircon project within a month.
In a statement today, the company said all approvals and service contracts were in place for the operation, which is expected to produce about 40,000 tonnes of zircon/rutile concentrate.
Matilda has also signed an offtake agreement with project partner Tricoastal Minerals (Holdings), which is based in Hong Kong.
Shares in Matilda climbed 3.1 cents, or 207 per cent, to a high of 4.6c before easing at 3.5c at 13:22 AEST.
The announcement is below:
Highlights
- Off-take agreement signed with Hong Kong based Tricoastal Minerals
- Mining, shipping and barging contracts secured, with work commenced
- Camp currently being relocated to new mining location
- New processing equipment completed and being mobilised to site
- First mining expected in early June
High grade mineral sands developer Matilda Zircon (ASX: MZI) is pleased to advise it has all approvals and service contracts in place to commence operations at its Tiwi Island Zircon Project, where it is expecting to start mining within a month.
Matilda is aiming to produce about 40,000 tonnes of high grade zircon / rutile concentrate from the Tiwi project in 2010, with mining expected to commence early June 2010, and first shipment to China expected in late July.
The Company has signed an off-take agreement with project partner Tricoastal Minerals (Holdings) Limited. Based in Hong Kong, Tricoastal manages one of the largest mineral separation capacities in China (250,000 tonnes) and has a comprehensive sales network throughout China.
The agreement was signed during a recent Matilda meeting with Northern Territory Minister for Resources, Kon Vatskalis. As part of the agreement, Tricoastal will market 100% of production from the Tiwi Project.
Matilda is also pleased to confirm it has secured all key contracts for a restart of operations, including agreements for mining, shipping, barging and power.
Darwin-based mining service providers Brash Contracting have already commenced works on the Tiwi Islands during April, upgrading roads to facilitate the relocation of the camp and processing plant to the Lethbridge West deposit where first mining will take place.
Matilda has appointed shipping logistics provider MCS, which is a specialist in the chartering and management for small cargoes. MCS will coordinate shipping from the Tiwi Islands direct to the China's Haikou Port on Hainan Island. Zircon concentrate will be barged from Tiwi Island to the ship by Darwin-based Workboats Northern Australia.
Power contacts have been signed with Inter Power, and Matilda has also engaged Morris Corporation to undertake camp catering services.
Matilda Chairman Mal Randall said the Company had delivered on a number of key milestones since the end of the wet season, and was now moving quickly toward production.
"During the past month we have locked in place a number of the key contacts necessary for production to get underway, and have mobilised staff and contractors to site in preparation for mining," Mr Randall said.
"Late rains in March and April have caused some delays on site, but we now have now secured all approvals, all contracts and all equipment to commence mining in June," he said.
Mr Randall said formalisation of the off-take agreement with Tricoastal extended the relationship between the two companies, and would allow Matilda shareholders to capitalise on strong zircon demand.
"In recent months we have seen a continued growth in Chinese demand for zircon with steady price increases as a result, and an expectation of further prices increase in the second half of 2010," Mr Randall said.
"Matilda is now in a prime position to capitalise on the surging Chinese demand for zircon. Production is set to commence next month, shipping in July and we have secured an off-take agreement with one of China's key processors and distributors which will provide us direct access into the Chinese market," he said.
2010 Mine Plan
Based on resource and grading, two Tiwi Island projects, Lethbridge West and Lethbridge South, have been identified for immediate mining through the 2010 dry season.
Mining and processing operations will commence on the Lethbridge West deposit. The Lethbridge south deposit will be mined and processed, with approval of the Mine Management Plan, following the completion of Lethbridge West.
In its 2010 Mine Plan, Matilda has also introduced a
number of enhanced mining and processing methods which will double plant capacity and reduce operating costs. This includes the introduction of an in-pit mobile slurry unit, and installation of a pre-concentrator facility.
The mobile slurry unit will eliminate double handling through the ROM Pad, allowing more efficient and lower cost mining and processing at the Tiwi project. Construction of the unit is completed, and it is currently being mobilised to site ready for commencement of operations.
The pre-concentrator will double production capacity from 150tph to 300tph for the established Processing Plant. The unit is planned for delivery to site in August, prior to mining commencing at Lethbridge South. In addition, further enhancements have been made to the concentrator itself, including the addition of further spirals to increase capacity.
