EXPLORATION & DEVELOPMENT

Titanium Sands illuminates promising ilmenite numbers

AFTER almost a decade, Titanium Sands has presented what it sees as a promising scoping study for a Sri Lankan mineral sands mine capable of carving a niche in the global ilmenite space.

Mannar Island has rail access

Mannar Island has rail access

The company says the Mannar Island project could start life with dredging operations target a 10km by 1km high-grade zone from which higher-quality ilmenite can be recovered that should "find a ready market with titanium slag and sulphate route pigment producers" in Asia and the Middle East.
 
Minor credits would come from other minerals such as rutile, zircon and garnet.
 
TSL will need A$122 million in capital costs, including $66.5 million in pre-production capex, to support the initial 20-year mine life that, based on the 82 million tonne at 6.03% total heavy mineral sub-resource, has a net present value of $545 million and an internal rate of return of 52%.
 
Payback of around two years is based on expected annual net revenue of $64 million based on a $635/t ilmenite-leucoxene price.
 

Development confidence

 
Managing director Dr James Searle said the successful 4Mtpa scoping study gave the company confidence to examine options for a second or third dredge in more definitive studies that could increase throughput to 12Mpta using the larger 187Mt at 5.3% THM resource that is yet to be closed off.
 
Depending on financing, approvals, and market conditions, TSL could start construction in 2024 and be operating from 2025.
 
The resource starts at surface, and is generally down to just 10m below surface.
 
Dredging would be continuous, and would be progressively followed by topsoil rehabilitation to allow annual establishment of plantation agriculture and natural vegetation protection zones to be owned by the local community.
 
The dredge would feed a floating wet concentration plant and centrally located mineral separation plant.
 
TSL has been talking to offtake and strategic partners for several years, and is hopeful of getting Mannar Island to the starting line given demand for ilmenite is growing, and groups such as the World Bank are keen to help kick-start politically troubled Sri Lanka's economy.
 

Second project 

 
The company must be pretty confident. 
 
Having circled Mannar since 2014, and aquired the project in 2018, it recently added a second project on Sri Lanka's north-east coast signing a binding agreement to acquire a 19sq.km exploration from Colombo Stock Exchange-listed pigments and coatings importer JAT Holdings.
 
The terms are based on staged payments of shares plus US$1.2 million.
 
TSL ended the march quarter with A$187,000 cash, but subsequently secured a $700,000 short-term loan from its two largest shareholders.
 
The cash-strapped company has flagged a need to raise at least another $2 million to meet its minimum obligations. 
 
The stock has traded at 0.7-2c over the past year and was off 9% today at 1c, valuing it at $14 million. 

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A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

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