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Strandline locks in last Coburn offtake deal

A YEAR after securing the bulk of its offtake agreements, and three weeks after starting development of its Coburn mineral sands mine in Western Australia, Strandline Resources has tied off one dangling thread.

100% of offtake has been locked in

100% of offtake has been locked in

It has signed a last, binding zircon offtake contract for a premium zircon project with European raw material supplier to the ceramics, glass and refractory industries Mario Pilato, finalising deals for 100% of the production from Coburn.
 
Mario Pilato is expected to take 10,000 tonnes per annum for an initial two years, with the sales price will reference the prevailing US dollar price, and is expected to generate 8-9% of Coburn's annual revenue. 
 
Strandline's now six offtake contracts with major American, European, and Asian customers are largely pre-sold, with production of the first heavy mineral concentrate scheduled for late 2022.
 
Coburn is expected to generate annual revenues of around A$200 million and EBITDA of $104 million, for a total of $4.4 billion in revenue over the 22 year life based on current reserves.
 
The $338 million project is fully funded to first production following a $122 million equity raise priced at 20.5c per share and US$60 million bond issue in March. 
 
The Australian taxpayer is chipping in a A$150 million loan from the $5 billion Northern Australia Infrastructure Facility. 
 
The $130 million engineering, procurement and construction contract being undertaken by NRW Holding's Primero Group commenced earlier this month, following the final investment decision. 
 
The development, near Shark Bay, will use the Port of Geraldton to export its mix of materials.
 
Strandline shares closed yesterday at A19.5c, valuing the company at $217 million. Morgans has an add recommendation and 47c price target.

 

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