Strandline gets binding offtake for Fungoni

STRANDLINE Resources has signed a binding take-or-pay offtake agreement with China’s largest integrated mineral sands processor, paving the way for finalisation of funding for the ASX-listed company’s Fungoni development in Tanzania.
Strandline gets binding offtake for Fungoni Strandline gets binding offtake for Fungoni Strandline gets binding offtake for Fungoni Strandline gets binding offtake for Fungoni Strandline gets binding offtake for Fungoni

Michael Quinn

The offtake agreement with Hainan Wensheng High-Tech Materials Co covers the zircon-monazite production, which is expected to represent 62% of the revenue from the project.

Strandline claimed offtake agreements for the project's other products, chloride ilmenite (representing about 28% of revenue), and rutile (10%), "are well advanced".

Fungoni is pegged as having a "first quartile revenue-to-cost ratio of 2.7". 

A feasibility study completed in October 2017 estimated a capital cost of US$30 million, and a net present value of $43 million.

Revenue over the life-of-mine was put at $168 million and earnings at $98 million (on an EBITDA basis).

The project is expected to take 12 months to bring into production once financing is secured.

Strandline has other emerging mineral sands prospects in Tanzania, and the "development ready" Coburn project in Western Australia.

Shares in Strandline were up 12% to 19c in morning trade, capitalising the company at $51 million.

The stock has tripled in value since October.

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