Image Resources sells higher than expected heavy mineral concentrate inventory from Boonanarring

With production advancing ahead of schedule, Image Resources (ASX: IMA) sold 70,000 tonnes of heavy mineral concentrate during the June quarter from its recently commissioned wholly-owned Boonanarring mineral sands project in Western Australia.

Located 80km north of Perth in the North Perth Basin, Boonanarring was commissioned late last year, with first revenue received in January.

Since then, the mine has exceeded Image’s expectations, with the March quarter’s performance revealing higher revenue and lower costs than anticipated.

This was partially due to “substantially” higher than expected feed grade in March, with the company revealing the grade was about 19% heavy minerals compared to the predicted 7.4% heavy minerals.

The June quarter is proving just as successful for Image, with the company securing sales agreements in May for the 70,000t of heavy mineral concentrate.

Offtake partner Shantou Natfort Zirconium and Titanium purchased 20,000t of the material, with the shipment departing Australia on 22 May.

Meanwhile, Hainan Wensheng High-Tech Materials took charge of the remaining heavy mineral concentrate with 30,000t shipped mid-last month and a further 20,000t making its way to the offtake partner on 30 June.

“Accelerating the sale and shipping of three months of heavy mineral concentrate production inventory in only six weeks was a real challenge,” Image managing director Patrick Mutz said.

“However, we accomplished our goal thanks to the efficient cooperation of our trucking contractor (Qube Bulk) our shopping broker and shipping agent (Braemar and WA Mercantile Services) and the diligent planning and organising skills of Image’s operations and sales team.”

Mr Mutz added the offtake partners had also “quickly” committed to the sales agreements and provided letters of credit in a timely manner to secure each shipment.

A further 20,000t of heavy mineral concentrate is scheduled to be delivered to Natfort in July.

Image said it was continuing to evaluate offers it had received from other potential buyers of Boonanarring concentrate.

However, the company noted sales to potential parties outside of the current offtake agreements remain contingent on Image securing expanded export authority, which it has applied for.

During the March quarter, the average heavy mineral feed grade at Boonanarring was 1.7 times higher than forecast.

This put heavy mineral concentrate production a month ahead of the 2019 schedule.

During May and June, Image mined more “ultra-high-grade ore” from the zone, which has been found to extend to the south of the deposit.

Since April, drilling to define the high-grade core at the deposit has been ongoing with an updated ore reserve due to be published in the current quarter.

Directors scoops up more Image shares

As Boonanarring continues to outperform expectations, non-executive director Li Huang Cheng has been buying up shares in Image in recent weeks.

In the last week of May, Mr Cheng scooped up 2 million shares on market for $462,500 ($0.231 per share). He followed this up in early June with a further 1.3 million share purchase for $301,800 ($0.232/share) and another purchase in mid-June of 1 million shares for $240,000 ($0.24/share).

This morning’s news spurred Image’s share price up more than 8% to reach $0.26.