Image Resources Confirms Continuation of High-Grade Boonanarring Core

THE DRILL SERGEANT: Image Resources (ASX: IMA) declared that close-spaced infill drilling has provided further confirmation of the continuation of the very high-grade core within the eastern strand in Block A of the company’s 100 per cent-owned, high-grade, zircon-rich Boonanarring mineral sands project located north of Perth in the North Perth Basin in Western Australia.

The announcement follows previous releases, including the first in July 2019, of a high-grade core in the eastern strand at Boonanarring from assay results from early stage drilling in Block C (the project’s current mining block) and a second announcement in September of secondary confirmation from assay results from drilling in Block B.

The latest assay results come from the next stage of drilling that was undertaken at Block A, which the company claims to have confirmed the continuation of the high-grade core over the full length (1.4km) of Block A.

The total length of the high-grade core has now been shown to stretch over 5.4 kilometres within Blocks A, B and C, with Block C currently being mined.

Image Resources said these results are part of a larger drilling program designed to re-assess the Mineral Resources and Ore Reserves at Boonanarring.

The full drilling program includes close-spaced, infill drilling to delineate the full extent of the high-grade core in the eastern strand across Blocks A, B, C and D.

Things have been busy at Boonanarring since Image got serious with the project by kicking off the open-cut mine and associated processing facility in April 2018.

The company completed construction and project commissioning ‘on-budget’ and ‘on-schedule’ with production commencing in December 2018.

After just two months of operation production of heavy metal concentrate (HMC) was ramped-up to exceed the long-term steady-state forecast production level of 20,000 tonnes HMC per month.

In March, Image determined the Ore Reserve ore grade had been understated, based on actual mined and processed ore grades and resultant HMC production levels leading the company to realise that the eastern strand of the Boonanarring deposit contains a very high-grade core that was not adequately delineated by the standard drill spacing of 20 metres.

A subsequent close-spaced drilling program (5 metre) commenced in April and continued through July, the results from which will be used to reassess the Mineral Resources and Ore Reserves estimates.

At the end of June 2019, the actual ore grade for the half year was 43 per cent higher than forecast based on the Ore Reserve.

Updated Mineral Resources and Ore Reserves estimates and an update of overall project economics are anticipated to be announced in the October quarter 2019.

Image’s first shipment of HMC product, culminating in its receipt of first revenue, came in January 2019.

Since then, more bulk shipments of HMC of nominally 20,000 tonnes have departed the Bunbury Port at the rate of roughly one per month.

The Boonanarring deposit is rich in zircon,which is one of the most valuable of the four heavy minerals contained in the HMC product.

The company is further encouraged by global zircon production being forecast to be lower than market demand for the next three years, making zircon prices relatively buoyant.

Image sees the combination of these factors to represent more than 80 per cent of its near-term total revenue.

The company is well-placed to take advantage of the upswing with market-based offtake agreements for 100 per cent of production for the life of the mine, with key zircon processing and manufacturing companies in China, which consumes more than half the world’s production of zircon.

Image has now completed two full quarters of active mining and production and at the end of June 2019 is profitable and cashflow positive.

For the first half of 2019 the company reported HMC production at 138 per cent of budget, operating costs of only 76 per cent of budget, EBITDA of 127 per cent of budget and provisional net profit after tax of 157 per cent of budget.

In July the company published updated market guidance and increased its forecast EBITDA from $40 to $50 million to $55 to $65 million for CY2019.

Image is actively drilling to delineate additional Mineral Resources for conversion to Ore Reserves at
Boonanarring with the goal of adding mine life.

Image Resources was eager to point out that Boonanarring is only one of a number of 100 per cent-owned mineral sand deposits in the company’s portfolio in the region, and that it is currently actively exploring and will be looking to develop one or more additional operating centres in the coming years.