Image Resources could begin TiO2 feedstock mining in 18 months

By John Ollett
Published: Tuesday, 23 July 2013

Australian company to use dry mining; operating cost of A$655m

Australian junior miner Image Resourcescould produce up to 89,000 tpa ilmenite, 5,400 tpa leucoxene, 9,000 tpa rutile and 32,400 tpa zircon over 10 years from its Atlas and Boonanarring deposits in the Perth Basin, Western Australia.

The project will use conventional dry open pit mining techniques and wet concentration for a total operating cost of Australian dollar (A) $655m ($605.8m*), according to its recently released feasibility study.

“The feasibility study has established a strong basis for Image to secure offtake partners and funding for the projects,” said Peter Davies, managing director of Image.

The mining would begin at the Boonanarring deposit and move to Atlas in 2021, which would require a three-month transfer period.

Testwork has indicated that 40% of the ilmenite from Boonanarring and 100% of the ilmenite from Atlas is suitable for synthetic rutile production or chloride pigment production.

The balance is suitable for slag furnace or sulphate-route pigment plant feed.

“Given the unusually high zircon grades, especially at Boonanarring, the project is expected to be more robust than almost all other undeveloped mineral sands projects in a low zircon pricing environment,” the company said.

The zircon produced at Atlas is expected to be high quality, while opportunity exists at Boonanarring to enhance project economics by upgrading the zircon produced from that deposit.

To reach the 2015 deadline, Image outlined, the company hopes to obtain approvals to commence work on site in July 2014.

“In order to be ready to start site construction at that time, detailed engineering will need to commence in February 2014, in turn requiring project finance arrangements and key land access agreements to be in place by that time,” the company said.

“This leaves opportunity to commence options studies in September 2013 and if required, to complete a final bankable feasibility study in January 2014,” it added.


The schedule that the company has set allows from now until January 2014 to complete fund raising and arrange offtakes agreements.

For fund raising, the study has shown that the project will have a maximum negative cashflow of A$64.1m in the Q2 2015, which allows for all project expenditures and working capital.

No detailed analysis has been carried out of project financing options but the company has received expressions of interest for offtake agreements, equity investment and build-own-transfer lease arrangements.

Image’s main focus for now will be to “secure finance to expedite the project,” said Davies.

Project economics

The economic analysis for the project has given it a payback period of 22 months, a pre-tax net present value (NPV) of A$145m (at 8%), a pre-tax internal rate of return (IRR) of 57.4% and operating cashflow after capital and after tax of A$185m.

These figures were all determined using long-term product prices of $400/tonne for leucoxene and $1,500/tonne for rutile across both deposits.

Ilmenite prices differed slightly and were estimated at $260/tonne for the Boonanarring deposit and at $272/tonne for the Atlas deposit, where mining will move to in 2021.

For zircon, prices were estimated at $1,250/tonne for the Boonanarring deposit and at $1,410/tonne for the Atlas deposit.

These prices are slightly higher than current prices (see the IM prices database).


* Conversion made July 2013