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- Strandline Resources (STA) is undertaking a scoping study to assess the potential to increase production at the Coburn mineral sands project in WA
- A definitive feasibility study released in 2020 forecast a mine life of 22.5 years and a total average annual production rate of 222,000 tonnes of heavy mineral concentrate (HMC)
- However, higher mineral sands market prices have prompted the company to extend the project’s mine life to 37.5 years and increase production capacity by up to 50 per cent
- Strandline also says it has been “inundated with requests from customers” to consider expanding production which would then support increased sales and revenue
- Construction of the Coburn project is 65 per cent complete and first production of HMC is set for the December 2022 quarter
- Company shares are up 4.69 per cent to trade at 50.3 cents
Strandline Resources (STA) has begun a scoping study to assess the potential to increase production by up to 50 per cent at its Coburn minerals sands project in WA.
As outlined in a definitive feasibility study (DFS) update in mid-2020, the Coburn project has an initial mine life of 22.5 years through to 2045, and total average production of 222,000 tonnes of heavy mineral concentrate (HMC) per annum.
The DFS outlined an average annual EBITDA of $104 million and the project was forecast to generate roughly $4.4 billion in revenue during the 22.5-year period.
The scoping study proposes to extend the mine life to 37.5 years, or 2060, by converting the mineral resources which sit adjacent and immediately north and along strike of the current ore reserves. Extending the mine life would therefore offer the potential to increase revenue to $7.94 billion.
Strandline also expects to increase production at the Coburn project, allowing it to further capitalise on its ‘world-class’ resource, long mine life, high mineral sands prices as well as the strong demand by offtake customers in the US, Europe and China.
Mineral sands market prices have significantly increased since the DFS update, with spot prices at least 35 per cent above the assumptions contained in the DFS.
“There is clearly scope to increase our free cashflow generation and overall financial returns significantly, particularly given the strength of the mineral sands market,” Managing Director Luke Graham said.
“We have been inundated with requests from customers to consider expanding production and any commitment to do so would be underpinned by further binding sales contracts.”
Strandline said any expansion is expected to be funded out of future Coburn cashflow and leverage off the project infrastructure, especially the design capacity within the processing plant circuitry.
Construction of the Coburn project is around 65 per cent complete and the project is on-budget and on-schedule. First production of HMC is set for the December 2022 quarter.
Company shares were up 4.69 per cent to trade at 50.3 cents at 11:35 am AEST.
