PERTH (miningweekly.com) – Mineral sands miner Iluka has unveiled details of the demerger of its Sierra Rutile operations, in Sierra Leone, creating two independent ASX-listed companies.

Iluka will continue to be a leading global supplier of critical minerals, while Sierra Rutile will be a West Africa-focused mineral sands producer and developer, with principal business activities including the operation of its existing Area 1 mine, and progressing the development of the globally significant Sembehun project.

The Area 1 operation is estimated to contain 541 000 t of contained rutile ore in reserves, and a mineral resource of 2.1-million tonnes of contained rutile, with the project expected to produce 144 000 t in the 2022 financial year at a unit cost of $892/t of rutile.

Iluka has been working to extend the mine life of Area 1 through the development of the Pejebu and Ndendemoia deposits.

Meanwhile, the Sembehun project is considered to be one of the largest and highest grade natural rutile deposits in the world. The prefeasibility study for the project has been completed and found that a capital investment of $337-million would be required for the project. Over the 13-year mine life at Sembehun, yearly rutile production will peak in year six of the operations, at 205 000 t, steadying to between 160 000 t/y and 190 000 t/y over the majority of the mine life, while ilmenite production is expected to remain at 75 000 t/y over the majority of the project’s life.  

Iluka has recommended that a definitive feasibility study be undertaken by the third quarter of 2022, to allow for a final investment decision in late 2023.

Under the demerger, Iluka shareholders will be entitled to receive one share in Sierra Rutile for each share held in Iluka on the record date. At the time of the demerger, Sierra Rutile will have 424.2-million shares on issue, and the company will trade under the ticker SRX.

The directors of Iluka have unanimously recommended voting in favour of the proposed demerger, after an independent expert concluded that the demerger would be in the best interest of Iluka shareholders.

Iluka shareholders are expected to vote on the demerger on July 22.

Iluka told shareholders on Monday that the demerger was the optimal pathway to reach Sierra Rutile’s potential and maximise value for shareholders, while simplifying Iluka’s structure, ensuring that management could focus on the core Australian asset, and a diversification into rare earths.

The demerged Sierra Rutile will be headed by Greg Martin, as independent chairperson, while Theuns de Bruyn will be appointed as MD and CEO. Martin Alciaturi will be appointed as FD, and Eben Lombard as COO.