Strandline Resources completes DFS for Fungoni project in Tanzania
Strandline Resources has completed a definitive feasibility study (DFS) for the Fungoni heavy mineral sands project in Tanzania, confirming strong financial returns.
Based on the study, the company needs to incur an expenditure of $30m towards the development of the project, including mine infrastructure, port facilities, working capital, land access, and pre-production mining.
The DFS confirmed maiden ore reserve of 12.3Mt at 3.9% total heavy mineral (THM), with internal rate of return (IRR) of 56% and revenue-to-operating cost ratio of 2:7.
The project is expected to have pre-tax net present value (NPV) of $42.9m, revenue of $168m over the life of mine (LoM) and earnings before interest, tax, depreciation, and amortisation (EBITDA) of $98m.
Strandline Resources managing director Luke Graham said: "This DFS confirms that Fungoni is an outstanding project which will generate strong financial returns for Strandline shareholders and deliver significant socio-economic benefits for the people of Tanzania.
"The project has an exceptional high unit-value heavy mineral assemblage, is simple to mine, recovers +93% of the valuable mineral in the ground and produces a highly marketable product suite."
"The path to profitable production is short, based on proven low-cost execution strategies, the payback period and rates of return are very attractive, and there is potential to grow mine life and re-use the infrastructure on future Strandline projects."
The company has secured the environmental certificate for the project and is awaiting mining licence and land access approvals. It is planning to accelerate project execution planning activities and negotiate major contracts.
The project is expected to be a conventional open-pit dry mining operation, with multiple stages of advanced process beneficiation and mineral separation.
According to the DFS, construction, and commissioning of the project is estimated to be completed within a 12-month period.
Separately, the company made mineral sands discoveries at Bagamoyo tenement, located 40km north of Dar es Salaam in Tanzania.