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Fungoni in position to take advantage of low-price environment

FUNGONI EXPLORATION The Tanzania-based project will likely be fast-tracked through a definitive feasibility study to exploit the low-price environment

BIG IN ZIRCON The scoping study projects that Fungoni will produce 20 000t of nonmagnetic concentrate, grading 60% zircon and 10% rutile

11th March 2016

  

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The recently completed scoping study results for heavy minerals miner Strandline Resources’ Tanzania-based Fungoni project suggest that the company move immediately to conduct a definitive feasibility study (DFS) while also applying for the necessary environmental and land use approvals.

Strandline MD Tom Eadie agrees that expediting the DFS will be beneficial. The lowprice environment for mineral sands products, as well as the zircon-rich nature of the Fungoni deposit, informs Standlines’ belief that executing fasttracked production will allow the company to benefit from its contemporary’s, Iluka Resources’, suspension of production at JacinthAmbrosia (JA).

JA, which is located in South Australia, is the world’s largest zircon mine, and produced about 389 000 t of zircon last year. The suspension will start on April 16 and continue for a period of about 18 to 24 months, depending on market conditions.

The scoping study demonstrates the potential for a conventional dry mining, low capital expenditure mineral sands operation at Fungoni with a projected output of 20 000 t/y of nonmagnetic concentrate grading 60% zircon and 10% rutile.

The study, completed last year by Australian heavy mineral sands (HMS) specialist TZ Minerals International (TZMI) and engineering group Sedgman, was based on an indicated resource of 2.4-million tonnes of ore, containing 8.3% heavy minerals; 22% zircon, 4% rutile and 44% ilmenite.

Eadie says testwork indicates clean, coarse, easily separable mineral grains and confirms that the zircon, rutile and chloride ilmenite products are all of an “excellent quality and marketable, even in the current low commodity price environment”.

TZMI calculates that Fungoni will require $12.3-million to be developed and is expected to generate an average of $15.3-million a year, with an average operating cost of $8.1-million a year. Fungoni’s access to existing infrastructure, including port, road, power and water, will significantly reduce capital and operating expenditure.

Sedgman has presented Strandline with a modular processing plant design that allows for easily transportable and scalable operations, allowing the miner the flexibility to quickly and cheaply relocate the plant to future HMS operations on completion of mining at Fungoni.

The portability and scalability of the Sedgman plant – or any other plant recommended by the upcoming DFS – are key, says Strandline, because of Fungoni’s expected 3.5-year mine life. The ability to move the plant to a similar high-value deposit post Fungoni will help increase its economic contribution to Strandline.

Fungoni is the first of many potential projects with high-grade deposits offering a low-risk path to positive cash flow, Eadie emphasises, adding that, “its development is designed to be profitable and pay off [the cost of]the portable plant”.

“Positive cash flow is only one benefit of the Fungoni development. Valuable Tanzanian operating experience will be gained, both for Strandline and the Tanzanian authorities. In addition, markets and marketing expertise will be established, which will be invaluable for future larger developments.”

Further Exploration Potential
There are several other potential exploration projects in Tanzania that could be developed by Standline after Fungoni. These prospects include other zirconrich resources in the general Fungoni area, a high-grade mineralisation zone noted on Mafia Island and the high-grade mineralisation zones drilled at Tanga South and Madimba.

Within the Fungoni area, about 5 km north-west of the Fungoni project, Strandline recently completed an auger drill programme. Limited historic exploration identified anomalous HMS, which led to Strandline drilling an area 3.5 km long and 1.75 km wide using 500mspaced lines with holes 250 m apart.

A newly discovered anomaly extends 2 700 m in length and has a width of 250 m to 500 m, which is noteworthy because the footprint of the Fungoni project is 1 100 m long and 200 m wide.

Significant results from the most recent 2-m-deep auger holes include 2 m at a grade of 4.13% total heavy minerals (THM) and 2 m at 2.13% THM. Strandline is encouraged by the potential of the largely unexplored 30 km × 15 km coastal plain to the north and to the east of Fungoni for additional zones of mineralisation. Eadie adds that more sampling and mineralogical results will be compiled in the coming months.

Mafia Island, about 50 km south-east of Fungoni, also has the potential for small, high-grade resources that could make use of the mobile processing plant. Several zones of high-grade, outcropping mineralisation have been located on the island, though no formal drilling programme has been completed.

Strandline also recently completed an aircore drilling programme at Madimba, which is in southern Tanzania and has access to excellent power and port infrastructure at Mtwara. Eadie believes it is likely that a rapid development plan using mobile processing equipment will be implemented, noting that the assay results for Madimba are pending.

Additionally, two zones of significant mineralisation have been located in the Tanga South project, in northern Tanzania. Initial indications are that these prospects will most likely be of sufficient size to warrant a larger, longer-life development plan, as opposed to a smaller mobile plant. Resource studies have started for the Tajiri and Tajiri North prospects.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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