PERTH (miningweekly.com) – An updated definitive feasibility study (DFS) into the Fungoni heavy mineral sands project, in Tanzania, has improved project economics.

ASX-listed Strandline Resources on Thursday reported that the updated DFS estimated a pre-tax net present value of $48.7-million, up from the initial estimate of $42.9-million, with the pre-tax internal rate of return having increased from 56% to 61%.

The project’s life-of-mine (LoM) revenue has also increased from $168-million to $184-million, while LoM earnings before interest, taxes, depreciation and amortisation of $115-million, are up from $9-million.

Strandline MD Luke Graham told shareholders that Fungoni was set to continue benefiting from the forecast supply shortages in the global zircon and titanium dioxide market.

“With the ongoing tightening in the mineral sands market, Fungoni offers additional opportunities to grow reserves and mine life, resulting in increasing financial returns over time.”

The two-million-tonne-a-year Fungoni project is expected to produce 302 300 t of saleable mineral sands product and could be delivered over the six-year mine life.

Graham said that the modular relocatable infrastructure planned for Fungoni could also be re-used at the company’s other mineral sands assets.

Furthermore, increases in commodity pricing could also result in increases to the ore reserves, which could increase the mine life and enhance financial returns further, with Graham stating that the company would evaluate the additional value improvements following a final investment decision.

Following the recent approval of the Fungoni mining licence, Strandline is now progressing financing for the project, and has secured a binding offtake agreement for the ilmenite product from the Fungoni project, while also inking a fixed price engineering, procurement and construction contract to design and build the process plant.