Listed project developer Bluejay Mining on Thursday published the results of its prefeasibility study (PFS) for its Dundas asset, in Greenland, which the company says is the world’s highest-grade mineral sands ilmenite project.

The base case of the study is considered only a “starting point” and is built on the current 67.1-million-tonne resource at a grade of 3.45% titanium oxide. It does not include the May resource increase to 117-million tonnes or any future resources defined in the exploration target of between 300-million and 530-million tonnes.

The base case, which will likely be improved, returned a positive 32.8% internal rate of return and a $83.1-million net present value.

CEO Roderick McIllree said that the base case had proven Dundas as a viable and economically mineable deposit.

The capital cost has been estimated at $245-million, inclusive of mining, processing, storage of dried finished product and a near shore direct ship loading facility, which would increase ilmenite production from 300 000 t/y to 440 000 t/y, as well as balance sheet management to account for shipping windows.

Bluejay said that it inflated the capital expenditure (capex) by about 20% to account for additional Greenland costs necessary to ensure viable and safe operations. The company has also taken a conservative approach and said it was confident that it would be able to reduce the capex estimate.

A conservative approach was also used for the operating costs, with 20% additional inflation, which Bluejay said could be reduced, particularly with a larger-scale project.

The PFS includes an upside case, which is based on exploiting the current indicated and inferred mineral resources.

“To truly understand Dundas’ worth, one must also look at the value it could add to higher-grade finished products, because of the potential for blending with lower quality feedstocks,” McIllree added.

Project finance discussions have started with European funding agencies. Given the project’s European jurisdiction, it would be able to benefit from a competitive cost of capital and access to export credit grant benefits.

Bluejay aims to start site construction works in June next year, with mining and processing of ore starting in September 2021, followed by the first product shipment in October that year.