PERTH (miningweekly.com) – Mineral sands developer Strandline Resources has signed an offtake agreement with commodity trader Industrial Minerals and Metals (IMMCO) covering all the rutile to be produced at its Fungoni project, in Tanzania.
The sale price for the rutile is based on the prevailing US-dollar market price for premium welding grade rutile, Strandline said on Wednesday.
“Establishing this important offtake relationship with IMMCO achieves another key milestone for Strandline, ensuring the company remains on track to commercialise what is the first in its pipeline of outstanding mineral sands assets in Tanzania,” said MD Luke Graham.
With the rutile offtake contract now in place, Strandline now has binding take-or-pay contracts over all the forecast production at Fungoni, with Graham saying it provided a strong endorsement for the project, and the quality of the zircon and titanium minerals to be produced.
“With the mining license already received for the project, Standline is now advancing project funding and finalising negotiations for key contracts necessary to execute the project.”
The $30-million, two-million-tonne-a-year Fungoni project is expected to produce 302 300 t of saleable mineral sands product and could be delivered over the six-year mine life, generating life-of-mine revenues of $168.1-million.
The project’s net present value has been estimated at $42.9-million, and the internal rate of return at 56.2%, while life-of-mine all-in sustaining costs have been estimated at $71.2-million.