PERTH (miningweekly.com) – The Foreign Investment Review Board (FIRB) has approved a transaction between junior Image Resources and mineral sands miner Murray Zircon, which could see Image move its Boonanarring mineral sands project into production in 2016.

A memorandum of understanding (MoU) signed by the companies in April covered the acquisition by Image of a wet plant, as well as certain ancillary equipment, which would be operated by Murray Zircon for a period of three years.

Murray Zircon would provide an in-pit mine slurry unit, pipelines and booster pump skids, poles and wires, a complete primary concentration plant and heavy mineral concentrate dewatering equipment, as well as maintenance equipment and critical spares.

Image noted that preliminary indications were that the ore processing equipment would be of the right capacity and processing capability to accommodate Boonanarring ore with only minor adjustments.

It was estimated that the total value of the plant and equipment was some A$20-million.

At the completion of the transaction, Murray Zircon would be issued with a 42% shareholding in Image and, if a decision to mine was reached within a two-year period, the company’s shareholding in Image would increase to 47%.

Further, Murray Zircon would provide Image with a purchase option over its mineral separation plant at the Mindari mineral sands project, in South Australia, which was redeveloped in 2012.

Meanwhile, in exchange for taking 90% of all zircon products produced at Boonanarring, at market price, Murray Zircon’s parent company Guandong Orient Zirconia would provide an $8-million downstream working capital facility.

Murray Zircon would also provide a A$4-million short-term loan following the completion of the transaction. Image would only have to repay the loan if production at Boonanarring started within three years.

Image told shareholders on Friday that the FIRB approval was an important step for the company leading to the start of production at Boonanarring.

The transaction was still subject to shareholder approval.