Matilda sets sail on mineral sands expansion
Matilda Zircon has loaded its first shipment of zircon-rutile heavy mineral concentrate, totalling 6,823t, from its Lethbridge South mine on the Tiwi Islands. It also received further approvals for its Keysbrook mineral sands project, located south of Perth, from the State Administrative Tribunal.
Matilda netted $9.6m in proceeds from the Lethbridge shipment, which will be used to fund development of Keysbrook.
China’s largest mineral sands processor, Tricoastal Minerals, took delivery of the first shipment and is contracted to acquire all the heavy mineral concentrate from Lethbridge South. Two more shipments are scheduled this year, in July and September
Matilda said the State Administrative Tribunal approvals provide project development certainty for Keysbrook that will assist in securing funding. The approvals include planning and development approvals and extractive industry licences required from local government.
Matilda said the approvals effectively provide for mining and processing operations over 6.5 years; it projects an eight year life for the project, however, and will seek extensions at the appropriate time.
The company has previously announced it will complete its Keysbrook bankable feasibility study in the near future. Matilda will then arrange funding, including debt facilities, to commence construction by late 2012.
First production is scheduled for the second half of 2013. Matilda expects Keysbrook to generate over $700m in revenue over the life of the project.
Matilda announced recently that it had formed a strategic alliance with Doral, a leading mineral sands producer in Western Australia, to hasten development of Keysbrook.
The deal encompasses a binding toll treatment term sheet, short term funding agreement and share subscription agreement.
According to Matilda, the Keysbrook project will make it one of the world’s largest producers of leucoxene, an important feedstock for titanium dioxide production.
Matilda chairman, Mal Randall, said the toll treatment agreement was a major milestone in the development of Keysbrook, ensuring the project was firmly on the path to being a major minerals sands operation.
Randall said “This agreement is a massive game changer for Matilda and its shareholders. It means Matilda will only need to build a wet processing plant and not a dry processing plant, effectively saving the company about $15m to $20m in capital expenditure and in the process slashing the risk profile of the project.”
As part of this alliance, Doral will toll treat Keysbrook ore at its West Australian plant, lend Matilda US$4.5m to help fund studies and associated activities at Keysbrook and has an option to acquire 250 million Matilda shares, which would give it about a 15% stake in the company.
The heavy mineral concentrate produced at Lethbridge South is approximately 50% zircon and 30% rutile. Mining is expected be complete in about four months, with the last shipment scheduled for September 2012.
The company mined the Lethbridge West deposit on the Tiwi Islands in 2010 and commenced mining and production at Lethbridge South in 2012.
Matilda recently identified 890,000t of inferred resource of heavy mineral at its Kilimiraka exploration target in the south east corner of Bathurst Island. The company said it could provide an eight to 10 year mine life and it expects mining to commence in 2014, pending approvals.