Image Resources says it has successfully navigated another challenging quarter at its wholly-owned Boonanarring mineral sands project, 80km north of Perth in WA. According to the company, the average realised price per tonne of its heavy mineral concentrate set a new quarterly record despite lower production and sales over the previous period.
Image recently posted some bumper financials for the 2021calendar year, including a net profit after tax of $19.4 million and a closing cash position of $79.8 million
The robust cashflow prompted management to share its earnings with its followers through the company’s second annual dividend of a $0.02 fully franked share payment yesterday.
Remarkably, the move to pay investors follows a mere three years of mining operations at Boonanarring.
Over the quarter, Image also finalised the acquisition of a brace of mineral sands tenements as part of a strategic expansion play, that when combined with its current assets has significantly boosted its current mineral resources and set up a strong pipeline of future activity.
The acquisition of a bundle of tenements in the old Eneabba mining zone in Mid West WA almost tripled the company's mining mineral resources to roughly 300 million tonnes.
Image also picked up the McCalls mineral sands project in WA and says the deal has added another important asset to its portfolio.
Importantly, both purchases were done with cash reserves totalling $35 million.
Management says as of March 31 this year it had a closing cash balance of $49 million with no debt following the Eneabba and McCalls transactions.
Rising commodity prices during the quarter helped drive Image’s fortunes with the average benchmark for zircon jumping 12 per cent on January 1 and ilmenite moving 2.5 per cent in February
The benchmark market price for zircon then increased a further 1 per cent to US$2120 per tonne on April 1, 2022.
The price of the commodity has been on a tear in recent times increasing by more than 45 per cent since the 2021 calendar year.
Furthermore, since the start of 2021, the benchmark price for ilmenite has increased by over 58 per cent with rutile increasing by around 54 per cent.
In Q4 2021, the company achieved record high pricing for its heavy mineral concentrate due to continued demand for zircon, ilmenite and rutile in China.
Image says the elevated prices were down to both a rise in the overall price of the commodities and importantly increased demand for its particular heavy mineral concentrate.
Management is currently concentrating on permitting and development at its Atlas project, 90km north of Boonanarring.
The company is looking to kick off preparations for transferring mine and ore processing activities at the venture following the depletion of accessible ore reserves at Boonanarring, which is scheduled for Q1 2023.
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By Matt Birney
