- Strandline Resources (STA) has officially made a final investment decision to develop its Coburn mineral sands project, slating first production for mid-2022
- The project, which lies in WA’s Gascoyne region, is expected to produce several critical minerals over its 22.5-year mine life
- The project will cost $338 million to build but, according to Strandline, it is fully funded through to production and cashflow
- The Coburn project has a pre-tax net present value of $705 million, with $4.4 billion in projected revenue over its total life of mine
- Strandline has five offtake contracts in place for around 95 per cent of the project’s mineral sands production for the first five years of operations
- While the project will mine through to 2045 based on its initial expected mine life, Strandline said there is potential to extend its life by another 15 years
- Nevertheless, there has been little price movement for Strandline today, with shares up 2.5 per cent this afternoon to trade at 20 cents each
Strandline Resources (STA) has officially made a final investment decision to develop its Coburn mineral sands project, slating first production for mid-2022.
The project, which is in Western Australia’s Gascoyne region, is expected to produce several critical minerals including zircon, titanium feedstock and monazite containing rare earths.
Strandline said the project will cost $338 million to build and is entirely funded through to production and cashflow thanks to a combination of debt provided by the North Australian Infrastructure Facility (NAIF) and a $60 million bond issue from Strandline earlier this year.
The Coburn project
According to a feasibility study released by Strandline in mid-2020, its flagship Coburn project has a pre-tax net present value of $705 million over a 22.5-year mine life.
The projected revenue for these 22.5 years of ore reserves is $4.4 billion with average annual earnings before interest, tax, depreciation and amortisation (EBITDA) of $104 million.
Moreover, Strandline has five offtake contracts in place for around 95 per cent of the project’s mineral sands production for the first five years of operations — estimated to be worth US$600 million (around A$850 million).
Over 80 per cent of the mineral sands production from Coburn will be sold to major American and European customers, with the rest to be sold into Asia, according to Strandline.
Managing Director Luke Graham, said the project capitalises on “robust technical and commercial fundamentals” along with WA’s strong position to support growing demand for critical minerals.
“Coburn is a world-scale project in a tier-one location, and achieving final investment decision is consistent with Strandline’s strategy to develop and operate high margin, expandable mining assets with market differentiation and relevance in the sector,” Luke said.
“Coburn will also provide significant public benefit, employment and new business opportunities as well as export income for the nation.”
Specifically, Luke said the project is expected to generate 300 jobs during its construction phase and secure 150 jobs during operations over its multi-decade life.
While the project will mine through to 2045 based on its initial expected 22.5-year mine life, Strandline said there is potential to extend its life by another 15 years by converting mineral resources immediately north and along strike of the existing ore reserves.
There has been little price movement for Strandline today despite its final investment decision, with company shares dipping slightly in early action but recouping their losses in afternoon trade.
At 2:50 pm AEST, Strandline shares are up 2.5 per cent to trade at 20 cents each.