Strandline Resources has secured an offtake agreement with Spain-based Chilches Materials for the Coburn mineral sands project in Western Australia.
The agreement covers around 7000 tonnes a year of premium zircon product for the first five years of Coburn’s production.
Chilches Materials has a core business of processing premium zircon sand. It will use zircon product produced from Coburn to fabricate ceramic opacifiers and in refractory applications.
The offtake is expected to provide around 6 to 8 per cent of Coburn’s forecast total revenue.
Strandline now has around 72 per cent of Coburn’s forecast revenue secured via offtake contracts, with the existing agreements valued at $US475 million ($680 million) over five years.
“With over 70 per cent of the project’s revenue now underwritten by binding sales contracts with major customers and a significant portion of the development funding secured via the NAIF (Northern Australia Infrastructure Facility) loan, Strandline is advancing strongly towards development of this world-class project,” Strandline managing director Luke Graham said.
NAIF has committed to provide $150 million loan facility for the development of the Coburn project, covering more than half of Strandline’s $260 million capital requirement at Coburn.
Strandline is estimated to produce 34,000 tonnes of premium finished zircon a year, in addition to 54,000 tonnes of zircon concentrate, 110,000 tonnes of chloride ilmenite and 24,000 tonnes of rutile.
The Coburn project is construction-ready, with key approvals in place including mining lease, environmental permit and native title agreement.
Strandline aims to reach a final development decision this year.