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NEWS

Sentiment high in sands game

Iluka is on the cusp of restarting its Jacinth-Ambrosia operation in South Australia

Astrong finish to 2017 has those in the posed new mine will produce about Iluka was poised to make an an-
mineral sands game primed for a big 200,000 tpa synthetic rutile, 50,000 tpa nouncement about the official restart of

year ahead. zircon and 30,000 tpa rutile over an 8.5- mining activities at Jacinth-Ambrosia at

With forecast increases in zircon year mine life. the time of print, having put the operation

and rutile prices for at least the first six Key financial estimates include a NPV on care-and-maintenance in April 2016.

months of 2018, the imminent restart of of $390 million, IRR of 36% and payback It comes as forecasters predict further

Iluka Resources Ltd’s Jacinth-Ambrosia within two years. tightening of the zircon market over the

operation in South Australia appears well Pre-execute contracts have been next 12 months following lower than an-

timed. awarded and tendering for the balance of ticipated supply last year.

Iluka’s confidence in the market also construction contracts is reportedly well Rutile prices jumped 7.5% during the

extends to its decision to approve de- advanced. December quarter and are tipped to

velopment of the Cataby project, about “The project ensures that our custom- break the $US800/t barrier this quarter.

150km north of Perth. ers will have continuity of synthetic rutile However, ilmenite prices softened to-

Board approval for Cataby was granted supply and also delivers significant eco- wards the end of the last quarter and

upon Iluka securing take-or-pay offtake nomic benefits to two separate regions are widely expected to continue tracking

agreements for at least 175,000 tpa of in Western Australia – Dandaragan and sideways for at least the next six months.
“synthetic rutile, about 85% of the com-
Capel,” O’Leary said. Base Resources Ltd benefitted from
pany’s production capacity at the
SR2 kiln in Capel. the strengthening minerals sands

“Iluka has worked closely with The outlook from here prices, including titanium pigment,
customers to secure offtake agree- continues to be positive with record revenue achieved from
ments for a significant proportion and I think that’s reflected its Kwale mine in Kenya during the
of the synthetic rutile production December quarter.

It allowed the Tim Carstens-led

associated with the Cataby pro- in Iluka’s recent decision to company to slash a further $US21
ject,” Iluka managing director Tom million off its net debt, which now

O’Leary said. proceed with Cataby. stands at $US65.6 million, with the
“Entering into these agreements company on track to wipe clear the

serves to underpin returns from remainder by year’s end.

the project and is consistent with Iluka’s “The construction period – with works Kwale’s strong operational perfor-

disciplined approach to the allocation of estimated to cost $250-275 million – will mance also prompted Base to lift its

capital and our objective to create and employ up to 250 workers at its peak. production guidance for zircon (was

deliver shareholder value.” Once in operation, the project will sus- 33,000-28,000t, now 35,000-40,000t)

First production from Cataby is slated tain a workforce of approximately 160 and ilmenite (was 420,000-450,000t,

for Q2 2019. Studies indicate the pro- people.” now 450,000-480,000t).

PAGE 20 FEBRUARY 2018 AUSTRALIA’S PAYDIRT