MZI says Feasibility Study shows Keysbrook will generate outstanding returns

THE BOURSE WHISPERER: MZI Resources (ASX: MZI) has received the results of a Feasibility Study for the Keysbrook mineral sands project, located in Western Australia.

The Feasibility Study has demonstrated the Keysbrook project to have strong economics.

Highlights if the study include:

–    Mine life of 7.2 years with potential to extend to up to 11 years (based on Mineral Resource conversion rates, further approvals and land access arrangements);

–    Project Net Present Value estimated at $133 million (post tax) using midpoint TZMI price forecasts and assuming a 7.2 year mine life;

–    Initial Rate of Return of approximately 71 per cent with a payback period of less than 15 months;

–    Project capital cost of $53.6 million, total development costs of $64.3 million and operating costs of $34.1 million per annum; and

–    Average mining rate of 4.5 million tonnes per annum (dry) of ore, producing an average 91,000 tonnes per annum (dry) of mineral sands products comprising:

–    26,000tpa (dry) of leucoxene 70 per annum titanium oxide product;

–    36,200tpa (dry) of leucoxene 88 per cent titanium oxide product; and

–    28,700tpa of zircon concentrate.

The company said the study made a compelling case for developing Keysbrook, putting the project on track for first product sales in the March quarter 2014.

“The findings of this study provide a strong platform for MZI to move to the next phase of project development,” MZI Resources chief executive officer Trevor Matthews said in the company’s announcement to the Australian Securities Exchange.

“This will see the company continue detailed design and engineering work as well as increase its financing activities as part of the plan to complete construction next year.”

Keysbrook is located approximately 70 kilometres south of Perth.


Keysbrook location. Source: Company announcement


The project comprises heavy mineral sands contained in degraded dunes within the Bassendean Formation.

Mineral Resources currently stand at 49.1 million tonnes at 2.6 per cent heavy minerals.

MZI indicated the project is characterised by its high leucoxene content and claim that once in operation will be one of the world’s largest producers of the premium Leucoxene 88 (comprising 88 per cent titanium dioxide) product.