HomeEast AfricaStrandline finalising funding and negotiations for Fungoni

Strandline finalising funding and negotiations for Fungoni

Strandline Resources has secured a binding offtake agreement for rutile product that will be produced at its Fungoni mineral sands project.

The agreement is with Industrial Minerals and Metals (IMMCO), an experienced
commodity trader and consumer of mineral sands based in Europe and Asia.

The Fungoni rutile is expected to achieve a premium specification making it suitable for high-end titanium applications.

Based on the pricing formulae contained in the agreement and the assumptions contained in the Fungoni DFS, the rutile production is expected to generate ~10% of Fungoni’s total revenue.

Importantly, this means that 100% of the forecast revenue is now secured under binding take-or-pay contracts for the entire life of the Fungoni mine.

The other project revenue is forecast to be from existing offtake agreements for zircon-monazite and ilmenite.

Fungoni’s high unit value orebody assemblage and low costs will underpin strong financial returns for Strandline Resources, with a fast payback period and a first quartile revenue-to-cost ratio of 2.7.

“Establishing this important offtake relationship with IMMCO achieves another key milestone for Strandline Resources, ensuring the company remains on track to commercialise what is the first in its pipeline of outstanding mineral sands assets in Tanzania,” comments Strandline Resources MD, Luke Graham.

“Having all products covered by binding contracts for the entire life of mine provides a strong endorsement of the Fungoni project and the high quality of zircon and titanium minerals to be produced.

“With the mining licence already received for the project, Strandline is now advancing project funding and finalising negotiations for key contracts necessary to execute the project,” he continues.

The Fungoni project is favourably located ~25 km from the Dar es Salaam port in Tanzania.

The DFS1, which was completed in October 2017, confirms the Fungoni project
will deliver strong financial returns, is capital-efficient and produces premium-quality titanium and zircon products, ideally positioned to capitalise from the growing mineral sands market.