Strandline Resources secures Primero for $135m EPC contract at Coburn mineral sands project
NRW Holdings subsidiary Primero will manage engineering, procurement and construction of Strandline Resources’ concentration and mineral separation plants for Coburn including all associated circuits.
Final preparations for the construction of Strandline Resources’ (ASX: STA) $260 million Coburn mineral sands project in Western Australia are advancing, with the appointment of engineering consultant Primero Group to design and build the core processing plant infrastructure.
The $135 million contract will see Primero, a subsidiary of NRW Holdings (ASX: NWH), manage all engineering, procurement and construction (EPC) facets of Coburn’s wet concentration plant (WCP), mineral separation plant (MSP) and associated circuits, based 240km north of an established mineral sands export port at Geraldton.
Primero will work under a subcontract arrangement with specialist engineer Mineral Technologies (a subsidiary of Downer Group), integrating design and technology to deliver a turnkey solution.
Strandline managing director Luke Graham said the appointment marked another key step in bringing Coburn closer to production.
“The successful award of this project demonstrates the technical ability and expanding capacity of the [Primero] group to deliver projects of this scale and importance in the minerals processing sector,” he said.
Primero’s contract is scheduled for completion by the end of 2022.
Processing plants
Coburn’s WCP is designed to beneficiate heavy minerals (such as ilmenite, leucoxene, rutile, zircon and monazite) and reject non-valuable, lighter minerals through multiple stages of high-capacity gravity separation and classification.
The rich heavy mineral concentrate produced from the plant will be transported to the MSP and stockpiled for further processing.
The MSP design comprises conventional electrostatic separation, gravity and magnetic fractionation to recover a range of premium-quality final products, including chloride ilmenite, rutile, premium zircon and zircon concentrate.
The WCP’s infrastructure can be easily relocated and Mr Graham said there are plans to move it several times during the project’s life as the mine advances along the orebody.
Project funding
Primero’s appointment follows the completion of funding required to develop the world-class Coburn project through to production and cashflow.
The funding structure includes $150 million debt financing from the Northern Australian Infrastructure Facility (NAIF), an $80 million US bond issue, and proceeds from a $122 million equity raising staged in March.
High-margin project
Coburn is forecast to be a high-margin project delivering more than $100 million in annual EBITDA (earnings before interest, taxes, depreciation and amortisation) over an initial 22 year mine life.
The assumptions are based on the project’s updated definitive feasibility study released in June which reported it could generate even stronger financial returns than originally forecast.
Strandline has binding offtake contracts in place for 95% of Coburn’s forecast mineral sands production over the first five years of operation.