PERTH (miningweekly.com) – ASX-listed Sheffield Resources has struck a A$24-million deal with fellow-listed Image Resources to divest of its Eneabba mineral sands project, in Western Australia.
A cash consideration of A$23-million will be payable subject to customary conditions associated with the transfer of exploration tenements, and the A$1-million balance is payable subject to the transfer of mining tenements, Foreign Investment Review Board (FIRB) approval and other customary conditions.
The transaction is expected to close in early 2022.
“Sheffield is very pleased to have realised meaningful value for our noncore Eneabba project, consistent with Sheffield’s strategy of focusing on our core Thunderbird asset. It is particularly pleasing to be able to divest Eneabba to Image given the strong alignment of these assets to their growth strategy,” said executive chairperson Bruce Griffin on Monday.
Cash proceeds from the transaction will be applied toward Sheffield’s A$10-million obligation to Kimberley Mineral Sands (KMS) payable within 60 days following a final investment decision for the Thunderbird mineral sands project, as well as general corporate
Eneabba contains a mineral resource estimate of 211-million tonnes, at 3% total heavy minerals, for 6.3-million tonnes of contained total heavy minerals. The package consists of eight exploration licences, three mining leases and one retention licence, covering eight project areas.
Image Resources MD and CEO Patrick Mutz told shareholders that the company was pleased to have the opportunity to acquire a package of tenements that only rarely came onto the market.
“Sheffield’s divestment decision coincides positively with Image’s desire to identify and secure potential development projects outside of its current portfolio, as a critical component of its growth strategy. This acquisition provides the company substantial opportunities for additional mine-life as well as production expansion potential,” he said.
He told shareholders that the strategic acquisition provided a substantially larger Mineral Resources base for potential new production centres, expanded production rates and extended mine life beyond Image’s current portfolio of projects.
The company noted that the acquisition of the Eneabba tenements did not change Image’s current development plans for its 100%-owned Atlas deposit, which was slated for production following the cessation of production at Boonanarring, likely in the first quarter of 2023.
Similarly, the feasibility study being conducted on Image’s Bidaminna project is continuing in anticipation of commencement of project development planning following positive feasibility study results, as a standalone project operated in parallel with Atlas.
Initial plans for projects associated with the Eneabba tenements are for potential operations of a single larger or two smaller projects in parallel with potential operations at Bidaminna and Atlas. These plans are being formulated in conjunction with the development of the annual budget for 2022 and will likely include securing land access, pre-development drilling and data collection to support heritage requirements, infrastructure planning and environmental permitting for at least one of the key projects.