Image Resources (ASX: IMA) is set to acquire a package of mineral sands tenements in Western Australia’s Eneabba mining district for $24 million cash, in a deal that may provide significant economies of scale for its existing Boonanarring and Atlas projects.
The deal with listed developer and explorer Sheffield Resources (ASX: SFX) will see Image pick up tenements contain an existing JORC 2012 resource of 211 million tonnes @ 3.0% total heavy minerals, for 6.3 million tonnes contained THM. Importantly, 68% of total resources are classified within the ‘indicated’ category.
“This acquisition provides the Company substantial opportunities for additional mine-life as well as production expansion potential”
Speaking on the acquisition, Image Resources Managing Director and CEO Patrick Mutz commented, “Image is pleased to have the opportunity to acquire a package of tenements that only rarely comes onto the market. Sheffield’s divestment decision coincides positively with Image’s desire to identify and secure potential development projects outside of its current portfolio, as a critical component of its growth strategy. This acquisition provides the Company substantial opportunities for additional mine-life as well as production expansion potential.”
The tenement package encompasses eight exploration licenses, three mining leases along with one retention license across eight project areas. The largest of these projects named Yandanooka, contains an MRE of 60 million tonnes @ 3.0% THM for 1.8 million tonnes of contained THM.
Image Resources notes that the sale is conditional upon receipt of regulation approval for the transfer of the retention license, along with approval of a third-party royalty holder, expected in early 2022. A series of other approvals covering acquisition of the mining licenses are also required, which are expected to take several months.
Mineralisation across all project areas is recoverable via dry mining methods using typical heavy mineral recovery technology already used at Image Resources’ Boonanarring wet concentrate plant.
The acquisition will see the company increase its total mineral resource tonnage, accessible by dry mining, by 234% and will more than double contained THM tonnage.
Importantly, the additional Eneabba mineral resources provide a considerable opportunity for the expansion or ore reserves, which could have a significant impact on life-of-mine and provide economies of scale for ore processing rates using existing infrastructure.
Images: Sheffield Resources Ltd
