Image Resources has produced an extraordinary set of quarterly numbers from its Boonanarring mineral sands mine 80kms north of Perth. Realised prices and production are up, costs are down, debt has been paid back early and the company’s coffers have swelled by nearly $30 million. Margins have more than doubled from $190 per tonne to $500 per tonne and $19 million in dividends was paid to shareholders during 2021.
Image was also successful in a tender process to purchase an extensive tenement package in the Eneabba mining district last year that cost $24 million and further consolidated the company as a leading producer and explorer in the WA heavy mineral sands space.
The company reported high demand for its mineral sands commodities for the quarter and ongoing limited global supply which continued to push prices higher for zircon and ilmenite, two of the key products from the company’s Boonanarring mine.
In an extraordinary quinella, realised prices for heavy mineral concentrate, or “HMC increased” 43 per cent over the previous quarter to $904 per tonne and C1 costs of production also dropped by 43 per cent for the quarter.
In an effort to control costs, Image is now generating 25 per cent of its annual electricity needs from solar power.
Cash held at the end of December 2021 was $79.8 million, up $29.5 million or 59 per cent over the previous quarter’s end.
Quarter on quarter production of HMC rose 83 per cent to 67,700 tonnes bringing the 2021 calendar year production of 295,900 tonnes, in line with guidance for the period. Average mined grade for the quarter was 7.8 per cent heavy minerals of which 22.7 per cent was zirconium dioxide and 31.6 per cent titanium dioxide. Annual average grade for 2021 was 9 per cent heavy minerals.
Concentrate grades held relatively steady throughout the year to average 93.5 per cent heavy minerals.
Zircon prices for the 2021 calendar year were up 40 per cent whilst ilmenite went up over 50 per cent over the same period. Interestingly, shipping costs reduced in the December quarter to $65 per tonne from $75 a tonne.
The company has a strategy of moving to its Atlas deposit after Boonanarring and is working hard to develop a second mine to increase overall production.
At its King-Erayinia and Madoonia Downs gold project 135km southeast of Kalgoorlie, the company reported high-grade gold over a 400m long zone within a much larger mineralised zone. Exploration is continuing.
By any measure Image has turned out a successful quarter however the most profound change can be found in the all important bottom line.
The Patrick Mutz run company reported net cash from its operations for the quarter of $32.9m, more than double the previous quarter’s operational bottom line of $14.4m.
With costs down, production up and a burgeoning bottom line, Image has a big opportunity before it as it enters into 2022.
Curiously, significant Image shareholder, Murray Zircon Pty Ltd lodged a 249D notice with the company this week to remove Mutz and his fellow directors Robert Besley and Chaodian Chen.
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