PERTH (miningweekly.com) – ASX-listed Strandline Resources has inked three sales contracts over its Coburn mineral sands project, in Western Australia.

The agreements are forecast to have a combined value of some $400-million over the five-year period, based on the pricing structures contained within each.

The long-term offtake agreements represented around 66% of Coburn’s forecast revenue for the first five years of production, and covered all of the ilmenite, all of the zircon and a substantial portion of the finished zircon product to be produced at the project during that period.

Under the ilmenite sales contract, US-based titanium dioxide producer The Chemours Company would acquire all of the 110 000 t/y of ilmenite produced at Coburn over the first five years of production, with the ilmenite sales expected to generate between 20% to 24% of Coburn’s total revenues.

A separate agreement with Sanxiang Advanced Materials and Nanjing Rzisources International Trading Company, operating under a strategic partnership, accounted for all of the zircon concentrate to be produced at Coburn over the first five years of production.

The zircon concentrate sales are expected to generate some $200-million in revenue over a seven-year term, Strandline said on Monday, accounting for between 22% to 26% of the project’s total revenue.

Strandline has also inked an agreement with one of the world’s largest zircon consumers, Industrie Bitossi, over a substantial portion of the premium finished zircon product to be produced at Coburn, during the first five years of the project life.

The zircon sales covered in this agreement would generate some 18% of Coburn’s total forecast revenue for the time period, Strandline said.

“These contracts, with three leading global consumers, are huge endorsements of Coburn and underpin our plan to secure project funding,” said Strandline MD Luke Graham.

“With two-thirds of the project’s revenue now underwritten by offtake agreements and the remaining agreements well advanced, Strandline is advancing strongly towards development of this world-class project.”

A definitive feasibility study on Coburn has estimated that the A$257-million project would produce an average of 229 000 t/y of heavy mineral concentrate over an estimated mine life of more than 22 years, generating life-of-mine revenues of A$3.9-billion.

The project would produce 34 000 t/y of premium zircon, 54 000 t/y of zircon concentrate and 110 000 t/y of chloride ilmenite and a further 24 000 t/y of rutile.

The project’s mine life could be extended by a further 15 years based on the potential production targets already identified, making Coburn a generational project.

Graham said on Monday that offtake negotiations for the remaining revenue streams at Coburn were advancing well, including for the annual rutile production and for the rest of the premium finished zircon.