Name and Location

Cyclone zircon project, Australia.

Client

Diatreme Resources.

Project Description

The Cyclone project is the largest undeveloped zircon project in the Eucla basin, which borders South Australia.

The results of a project enhancement and update study have reaffirmed the financial viability of the project.

The Cyclone mineral resource comprises 211-million tonnes at an average grade of 2.3% heavy minerals

(HMs). The probable ore reserve has been estimated at 140-million tonnes at an average grade of 2.5% HMs, representing a 75% conversion rate for contained HM tonnes.

The proposed mining method comprises overburden removal by truck and shovel, and ore mining by dozer push to in-pit traps and slurry pumping.      
Infrastructure requirements are minimal and will consist of a network of temporary haul roads, electricity andwater reticulation to the mining unit and a mobile slurry pipeline. The mining rate will be 1 300 t/h for 7 700 hours a year, providing a mining rate of ten-million tonnes a year.

Using a conventional wet concentrator plant (WCP) for mineral sands, primarily using spiral separation with secondary screening and classification to achieve high HM sands concentrate quality, has been proposed. A conventional mineral separation plant, using mainly magnetic and electrostatic separation with secondary screening and gravity separation to generate mineral products, has also been proposed.

Hot acid leach of the HMs is required to achieve optimal recovery and product quality, owing to the presence of coated grains.

This WCP location will be fixed for the life of the mine and has been selected to ensure the pumping distances for the feed and tailings are not excessive. Tailings storage facilities will be located north and south of the WCP to provide short tailings pumping distances in the early years of the mine. The WCP process will be a totally wet slurry process and will include screening and several stages of gravity separation, including spirals, classifier and shaking tables to concentrate the valuable HMs.

Most of the silica minerals, low-grade titanium and trash minerals will be rejected to tailings from the WCP. A high-grade mineral concentrate (98% HMs) will be produced containing zircon and valuable titanium minerals.

Net Present Value/Internal Rate of Return

The project has a projected net present value, at an 8% discount rate, of $121-million, an internal rate of return of 23% and payback of 2.8 years, based on an updated estimate of processing plant capital and operating costs, and shipping and diesel costs, with revenue streams adjusted for current product pricing.

Value

The capital cost of the project is estimated at $A161-million, compared with the previous estimate of $223-million.

Duration

Not stated.

Latest Developments

The Cyclone project has now been effectively derisked subject to the Western Australia Environment Minister

granting the environmental licence. The derisking process has mitigated key project risks identified in the

prefeasibility study and during the early stage of the definitive feasibility study (DFS). Diatreme can now

progress to completing the DFS.

Key Contracts and Suppliers

None stated.

On Budget and on Time?

Not stated.

Contact Details for Project Information

Diatreme Resources, tel +61 7 3832 5660 or email manager@diatreme.com.au.