Mineral sands producer Image Resources has wrapped up most of the acreage in its deal to bolt a sought-after package of tenements onto its Mid West WA minerals sands business. The deal adds further expansion opportunities to the company’s development plans for its Atlas and Bidaminna deposits.
In November Image announced the $24 million acquisition of the “Eneabba Tenements” from Sheffield Resources, that comprised eight exploration licences, or “Els” three mining leases, or “MLs” and one retention licence, or “RL” across eight project areas. The company said this would add 211 million tonnes of mineral resources at 3.0 per cent total heavy minerals, or “THM” for 6.3 million tonnes of contained THM to its inventory.
Image said all transactions apart from the three MLs have been completed with a $23 million cash payment. The MLs remain pending and require Foreign Investment Review Board and third-party approvals.
The company said it expected to complete the final acquisitions this quarter and will involve a further payment of $1 million in cash. The deal is funded from Image’s current war chest of around $50 million, according to its latest quarterly financial report.
All tenements within the agreement are located in the historic mineral sands mining district of Eneabba in Western Australia and within the footprint of Image’s existing operation. Eneabba is located only 275 kilometres north of Perth.
According to the company, mineralisation across all the Eneabba tenements is accessible by dry mining methods and amenable to typical heavy mineral recovery processing technology including the wet concentration plant currently used at its Boonanarring project north of Perth.
Given the convenient proximity of the newly acquired tenements to Image’s existing projects, it expects the expanded mineral resources to provide the basis for potential new production centres, expanded production rates and extended mine life beyond its current portfolio of projects.
Image is currently mining mineral sands at its Boonanarring project and according to the company, the strategic acquisition opens up many new possibilities for the expansion or progression of mining through its various project areas.
The deal boosts Image’s total mineral resource accessible by dry mining by 234 per cent and more than doubles its total tonnes of contained THM.
Image Resources Managing Director and CEO, Patrick Mutz said: “Acquiring the Eneabba Tenements satisfies one of the components of Image’s growth strategy, being the acquisition of additional Mineral Resources outside of our current portfolio for future mining opportunities.”
“We will now expand our project development activities to include a new potential mining centre in addition to our plans for operations at Atlas and Bidaminna.”
The purchase does not change the company’s current development plan for its 100 per cent owned Atlas deposit slated for production early in 2023 when it expects the Boonanarring project to cease production.
Image is also continuing to drive through a feasibility study for its 100 per cent owned Bidaminna project that it says may run as a stand-alone project in parallel with Atlas.
At around $0.23, Image is trading at highs not seen since early 2020 and investors will be hoping by bolting on the Eneabba tenement package, more profitable tonnes will flow through the company’s Mid West processing centres.
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By Matt Birney
