Higher zircon grades and increasing demand for heavy mineral concentrate (HMC) has seen Image Resources ring its till, with a bottom-line boost of nearly $12.5 million revealed in its latest quarterly report.
The company also increased HMC production quarter on quarter by six per cent at its Boonanarring minerals sands project near the Western Australian town of Gingin.
Image says that because of the higher grades of the zircon it shipped and strong underlying commodity prices, its average HMC pricing jumped by 17 per cent for the past quarter. After finishing this year’s first quarter in the black to the tune of $5.25 million, it today reported a June quarter increase of $12.49 million.
It helped boost its cash on hand at the end of the quarter by $6.9 million, up to $62.5 million.
Management has welcomed the cash injection from shipping its remaining ore from stockpiles at Boonanarring and will now turn its main focus towards getting the various government approvals required to start at its new Atlas project.
The company has beefed up its production guidance after again coming in above the mark and with the shipping of more stockpiles to come, it has moved the dial of its previous guidance of 80,000 to 90,000 tonnes this calendar year up to 95,000 to 105,000 tonnes.
It is now working to navigate bureaucratic obstacles so it can begin production at its nearby Atlas project that holds a deposit of 5.5 million tonnes at 9.4 per cent total heavy minerals (THM). The company remains confident that once it receives all its permits it will be able to shift to production at its new project in about six months.
Image Resources managing director and chief executive officer Patrick Mutz said: ““We are pleased to report another successful and profitable quarter of operational results for the Boonanarring project. (Now) our focus is rapidly shifting to relocating our mining and processing operations to Atlas as soon as environmental, construction and operating permits are in hand. Our project development team continues to work diligently to minimise
permitting delays. Image’s growth and sustainability journey is well underway and we have an exciting pipeline of opportunities which should lead to exciting news flows across the next 12-months.”
Last month, the company tabled a prefeasibility study (PFS) on its proposed new Bidaminna mineral sands project in WA that estimates a total EBITDA for its contemplated 10.5-year mine life of $379 million.
Management will immediately move towards definitive feasibility studies and says it will cost $194 million to build the mine, which should yield a net present value of about the same figure. The PFS also revealed a maiden ore reserve estimate of 123 million tonnes of probable ore reserves at 1.8 per cent total heavy minerals.
Image’s 100 per cent-owned Bidaminna project is about 25km north-west of its Boonanarring high-grade, zircon-rich open-pit mine and wet concentrate plant. Management is now evaluating Bidaminna as a standalone greenfield mineral sands project amenable to low-cost dredge mining, with a floating wet concentration plant to recover saleable heavy mineral concentrate – as was the case at Boonanarring – or for separation into final products.
The company is continuing to progress a PFS on its Yandanooka deposit as a potential standalone dry mining operation that could benefit from some of the existing equipment at Boonanarring. The team is also pushing along with a PFS on the viability of a mineral separation plant at Boonanarring to take advantage of the project’s past infrastructure capital expenditure.
With its new Atlas project ready and waiting to go and its Yandanooka project looming on the horizon, Image appears to have a busy period on its hands. And as the price of zircon continues to go north, the cogs could start turning at Atlas just at the right time.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Steve Kaless
