Ahead of finalising project funding, Strandline Resources (ASX: STA) has secured access to a port on Western Australia’s coast that will enable it to export 100% of the mineral sands products produced at its Coburn project.
The WA-based explorer inked the binding port access and services agreement with Mid West Ports Authority, which operates the Port of Geraldton about 420km north of Perth and 240km south of the Coburn project.
The deal allows Strandline to export about 230,000 tonnes per annum of mineral sands product, including heavy mineral concentrate, premium zircon (finished), zircon concentrate, chloride-grade ilmenite and rutile, over an initial 10-year term.
Today’s news is another step towards finalising funding for the Coburn project and follows other key supply, construction and offtake contracts.
Earlier this month, Strandline selected Perth-based Contract Power to build, own and operate a 32-Megawatt hybrid power plant, to be situated near the mineral separation plant at Coburn.
A day later, it announced the appointment of the Woodside-EDL joint venture to supply liquefied natural gas to the power plant.
Port access deal
Under the binding deal, Mid West Ports Authority will provide access to the port facilities and manage the loading of Coburn’s products into vessels on a campaign basis.
The agreement is subject to customary conditions precedent for a port services agreement, as well as Strandline making a final investment decision relating to Coburn’s development.
According to Strandline, the Port of Geraldton is regarded as a well-established and reliable mineral export port and its proximity to Coburn makes it an “efficient and cost-effective port solution”.
Strandline managing director Luke Graham said establishing this port deal provides the company with long-term certainty to export its mineral sands products and represents another strong endorsement of the Coburn project.
“Coburn is a world-class critical minerals project and benefits greatly from its proximity to established infrastructure and mining services in the Mid West region of Western Australia,” he said.
“Coburn’s technical and financial quality is reflected in the top-shelf calibre of our suppliers, contractors and our customers, as well as the $150 million loan facility secured with Northern Australia Infrastructure Fund (NAIF), which has conducted extensive due diligence on the project.”
Offtake deals already in place
Earlier this year, Strandline signed multiple binding offtake contracts for zircon and ilmenite with world-leading consumers across Europe, the United States and China.
The combined deals are estimated to cover about 72% of Coburn’s forecast revenue with the remaining high value products of rutile and premium zircon retained to sell in the spot market.
An updated definitive feasibility study released in June indicated a development cost of $260 million is needed to bring the Coburn project online, after which it is forecast to generate annual earnings before interest, tax, depreciation and amortisation of $104 million.
The project is expected to produce 222,000tpa of heavy minerals over an estimated 22.5-year mine life.