Strandline Resources have conducted a definitive feasibility study (DFS) for the Fungoni heavy mineral sands project in Tanzania and have concluded with results of a strong financial performance.

 

The study has shown that the company will need to invest $30m in developing projects, while investments are also lacking in working capital, mine infrastructure, land access, port facilities and also in pre-production mining.

 

The DFS confirmed a maiden ore reserve of 12.3Mt at 3.9% total heavy mineral (THM), with an internal rate of return (IRR) of 56% and revenue-to-operating cost ratio of 2:7.

 

The project will be worth $42.9m before taxes, with computed revenue of $168m over the course of its operation. Earnings of around $98m are expected before interest, tax, depreciation, and amortization (EBITDA).

 

Strandline Resources Managing Director, Luke Graham confirmed his backing of the project by calling Fungoni an ‘amazing project’ which will deliver great results financially for Strandline shareholders while also providing socio-economic benefits to the people of Tanzania.

 

Fungoni has a high single unit value, heavy mineral assemblage and is very simple to mine. Over 93 percent of the valuable mineral in the ground is available and the final product is also highly marketable.

 

 "The path to profitable production is short, based on proven low-cost execution strategies, there is potential to grow mine life and re-use the infrastructure on future Strandline projects, and the payback period and rates of return are very attractive."

 

An environmental certification has already been attained, but the company continues to wait on mining licenses and land access approvals. The plan is to win major contracts and hasten project execution planning activities.

 

The project will be an open pit convention dry mining operation, with a series of stages, advanced beneficiation and also mineral separation.  

 

The DFS estimates that the construction and commissioning of the project will take no more than 12 months. 

 

The company has also simultaneously made mineral sand discoveries at the Bagamoyo tenement, located some 40 km north of Dar-es-Salaam in Tanzania.