The government of Greenland has granted dual-listed Bluejay Mining an exploitation licence for the Dundas ilmenite project, allowing the company to progress towards procurement, construction and ilmenite production.
The licence, which is valid for 30 years, grants Dundas the right to the ilmenite resource.
"The extendable 30-year licence allows us to now implement the initial 440 000 tonnes ilmenite concentrate per annum operation and we anticipate reaching a commercial agreement very soon with a large multinational commodities group for Dundas product, allowing us to move further forward towards production,” said CEO Rod McIllree.
"The ilmenite product market is very robust currently with a clear and strong upward price trend forecast to continue for several years to come. This tightening of supply and increasing price forecasts provides a perfect platform to now bring online one of the world's great deposits of titanium,” he added.
The current prefeasibility study (PFS) mine life is 11 years and is comprised of an onshore mineral reserve of 67-million tonnes within a Joint Ore Reserve Committee-compliant indicated mineral resource of 117-million tonnes.
Bluejay is completing an optimisation study, which should enhance the economics of the project. The PFS for Dundas was established on a small portion of the identified mineralisation and should eventually allow for many decades of mine life to be added.
The current capital expenditure is estimated at $245-million. Optimisation of the ore sorting and magnetic separation should reduce the estimate, analysts at SP Angel said in a note.
The analysts also forecast that the optimisation study could reduce operating costs to under $100/t. The PFS estimated costs $6.7/t for the mine and a total of $112.8/t of ilmenite concentrate.
“Bluejay’s timing is immaculate given industry concern over the next generation of ilmenite projects. It is also possible that some production might start ahead of the major project construction due to ongoing demand for feedstock,” said SP Angel.
Shares in Bluejay surged 14% to a 52-week high of 13.97p a share on Monday.