JOHANNESBURG (miningweekly.com) – A recently completed scoping study at the Mutamba heavy minerals mine, in Mozambique, has shown that the mine is capable of sustaining a 30-year mine life, based on a resource of 451-million tonnes at 6% total heavy minerals with relatively modest capital requirements.

Being developed in conjunction with Rio Tinto, Savannah Resources has the right to earn up to a 51% interest in the project, subject to key milestones being met, and by delivering the scoping study, Savannah has earned a 20% interest.

Savannah CEO David Archer said the scoping study outlined the potential for a long-life, robust project at a time of increasing demand for titanium feedstocks and strong price growth.

“Mutamba is a tier-one deposit that is well placed to provide a long-term, reliable supply of ilmenite, zircon and rutile,” he noted, adding that the project was projected to have a pre-tax net present value of $244-million and a four-year payback period.

First production is being targeted for 2020, with average production of 456 000 t/y of ilmenite and 118 000 t/y of nonmagnetic concentrate.

The mine is expected to need preproduction capital expenditure (capex) of $152-million, plus $74-million of contingency, engineering, procurement, construction management and spares, with identified opportunities that may reduce capex by about 35%.
 
“Our conceptual mine plan is based on well known, long established mining and processing techniques and is enhanced by the very complementary infrastructure setting, comprising local roads, power, telecommunications, an international airport and the nearby Port of Inhambane.

“Mutamba could be a major industrial development for the region and, with an anticipated final labour complement of 332 people and over 1 000 indirect jobs expected to be created, we are targeting 95% local participation once the operations become established.  The project could also provide strong capital flows into Mozambique and will be an additional element in the country’s growing levels of foreign direct investment,” said Archer.

Savannah can now earn a further 15% stake in the project by completing a prefeasibility study.