Relative newcomer to the mineral sands scene MRG Metals (ASX: MRQ) has timed its entry into the space to take advantage of forecast increased consumption, with the company revealing metallurgical testwork on Koko Massava ore had generated a quality titanium dioxide product.
MRG cemented ownership of highly prospective tenements in Mozambique less than two years ago.
Speaking with Small Caps, MRG chairman Andrew Van Der Zwan said prior to picking up the mineral sands assets in southern Mozambique, the company had evaluated 170 different projects worldwide.
The appeal of the Corridor Central and Corridor South tenements was the success previous explorers had.
Western Mining was advancing the tenements prior to BHP’s (ASX: BHP) takeover.
When BHP acquired Western Mining, it focused on developing Olympic Dam in South Australia and the Mozambique tenements were left to “wither on the vine”, according to Mr Van Der Zwan.
MRG leaps into exploring Mozambique projects
Since locking-in the mineral sand tenements, MRG has been busy on the ground – exploring its new assets efficiently and cost effectively.
Mr Van Der Zwan noted the company had spent a mere US$1.2 million on advancing Koko Massava at Corridor Central and delivered a massive maiden resource of 1.42Bt at 5.2% total heavy mineral.
The resource was delivered in the June quarter and could potentially underpin a 100-year mine life.
Metallurgical testwork on a 100kg sample of Koko Massava ore delivered a “sizeable upgrade in ilmenite product”.
This was done via ultra-low temperature roasting to produce an upgraded ilmenite product containing 47.1% titanium with low impurities.
“We are confident further optimisation will deliver near 50% from Koko Massava material,” Mr Van Der Zwan said.
Finding the best-possible mineral sands deposit to mine
While Koko Massava has a huge resource and commercial potential, Mr Van Der Zwan said the company was looking for several factors when deciding what deposit to mine, including either a very high grade or a greater valuable mineral assemblage – or, ideally, both.
He added the company’s strategy was to shore up an operation with “exceptional economics” that can be profitable in any operating environment.
As such, Mr Van Der Zwan said the company was looking across all its many targets to “find the best possible potential mine”.
“Any one of the company’s targets could become the next mine,” he said.
A target Mr Van Der Zwan is excited to get busy exploring is the Linhuane tenement which is under application and previously explored by Rio Tinto (ASX: RIO).
Rio carried out shallow drilling which uncovered numerous 10m intervals with grades ranging between 5% THM and 25% THM.
With grades like that, Mr Van Der Zwan described the tenement as a “game changer” with “enormous potential”.
Meanwhile, the company is methodically exploring all of its targets across Corridor Central and Corridor South and gaining more knowledge of the mineralisation it is dealing with.
Recent metallurgical testwork on ore from Nhacutse in Corridor South revealed it contained up to 68.28% ilmenite/leucoxene, 2.17% rutile and 2.91% zircon.
Testwork at Koko Massava East also returned a high mineral assemblage of 50.45% ilmenite/leucoxene, 0.84% rutile and 1.93% zircon.
Other samples are under analysis from other targets to gauge both grade and mineral assemblage.
Auger drilling at Koko Massava during the June quarter continued to extend known shallow high-grade mineralisation.
Notable results have included 12m at 7.68% total heavy mineral from surface and 12m at 5.58% THM from surface.
These all ended in high-grade mineralisation.
Over at the Poiombo target at Corrido South, drilling has unearthed 36m at 7.09% THM from surface, including 6m at 16.59% THM from 24m.
Another hole intercepted 51m at 5.4% THM from surface, including 9m at 10.7% THM.
Infrastructure at project doorstep
MRG is hoping to take advantage of a nearby proposed multi-billion dollar Chongoene Development Corridor project which will comprise a 150Mtpa multipurpose deep water seaport.
This port will be only 10km from the southern boundary of Corridor South. The infrastructure project also includes a proposed track line that will run through or adjacent to MRG’s Corridor Central and Corridor South projects.
Mr Van Der Zwan said this was an “enormous advantage” for the company.
He added MRG had a small market cap of $7 million, but owned a project with “massive potential” and an existing 1.42Bt resource.
Despite the COVID-19 pinch, the outlook for mineral sand producers is positive with supply gaps expected to emerge.
Mr Van Der Zwan said the outlook for titanium minerals, in particular, was “very strong” with many analysts forecasting an ilmenite shortage in the next three-to-four years.