Perth-based explorer Strandline Resources (ASX: STA) has spent the three months to December 2020 advancing a commercial debt facility to finance development of its flagship $260 million Coburn minerals sands project in WA.
In a quarterly report released today, the company confirmed it was in detailed discussions with shortlisted lenders regarding the proposed $100 million debt tranche, which will stand alongside a 15-year, $150 million loan under the Commonwealth Government’s Northern Australia Infrastructure Facility.
The NAIF was finalised during the quarter and will be drawn down in two stages – $130 million for the construction of Coburn’s core mine infrastructure; and $20 million to fund a northern access road linking the project to the nearby Denham community in Shark Bay.
During the quarter, Strandline advanced a number of contract packages in preparation for project development, including an access and services agreement with the Mid West Ports Authority which operates the Port of Geraldton; and an agreement with Contract Power Australia to build, own and operate purpose-designed infrastructure for the project based on a low cost, low emission solution utilising solar and battery technology.
The company appointed Woodside Energy (LNG Fuels and Power) Pty Ltd and EDL LNG Fuel to Power Pty Ltd for the joint venture supply of LNG to Coburn’s power generation facilities; and Primero Group as preferred contractor for detailed engineering, procurement, construction and commissioning of the project’s wet concentrate and mineral separation processing facilities.
Over the next three months, Strandline said it would progress debt funding and early works development activities for Coburn, award remaining construction contracts, and continue to review its strategic partner options.
The December quarter saw Strandline move forward with exploration and evaluation activities for its wholly-owned, high-margin Fungoni “starter” project in Tanzania, which is expected to pave the way for a series of major mineral sands opportunities in the region including development of the large-scale Tajiri project.
Discussions continued with the Republic of Tanzania for its share interest in Strandline’s Tanzanian project subsidiary Jacana Resources (T) Ltd, which owns and operates Fungoni.
Strandline also signed a $33 million project finance facility agreement with Nedbank CIB for Fungoni’s development, accounting for most of the project’s $45 million capital requirement (excluding financing costs).
Tajiri scoping study
At Tajiri, an engineering scoping study showed the high-grade project could generate strong financial returns over a 23-year mine life, targeting a pre-tax net present value of $268 million and a pre-tax internal rate of return around 36%.
The $163 million open-pit development is based on a JORC resource of 268 million tonnes at 3.3% total heavy mineral sands and will utilise conventional processing technology to produce high-value concentrates of ilmenite, HiTi (rutile-leucoxene), zircon, monazite and garnet.
Strandline said the Tajiri study provided a strong foundation to advance to the next phase of the project’s economic evaluation and permitting.