Sierra Rutile, the AIM-listed producer of titanium feedstock industrial minerals, has decided to make a significant change in its expansion strategy with the fast-tracked development of a new project, the dry mining of the Gangama deposit.
The deposit is expected to have an average annual production profile of 83,400 tonnes of rutile, 46,000 tonnes of ilmenite and 9,500 tonnes of zircon concentrate over a life of six years, for an up-front capital cost of $103m over its 12 month construction period.
Given the nature of the desposit, the company has authorised management to proceed with detailed engineering work and a project implementation plan immediately. Site preparation activities have also been started.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Assuming full-scale construction of Gangama Dry Mining begins in the first quarter of 2013, SRL's production profile would be 185,000 tonnes of rutile in 2014 and 205,000 tonnes of rutile in 2015. Production in 2013 is expected to be 125,000.
Jan Castro, Chairman of the board, said: "The Gangama Dry Mining study has demonstrated the type of exceptional economics that can only be associated with world-class mining deposits. The SRL management team is to be commended for its continuing focus on maximizing value from its asset base.
"The substantially lower capex, superior economics, much shorter development time, and lower risk profile of Gangama Dry Mining clearly define it as SRL's next step, and the board is pleased to authorise management to move this forward on an expedited basis."
NR
