Mineral Commodities successfully commissioned its first project, the high grade Tormin mineral sands project in the Western Cape province of South Africa, within the A$16m budget set for January, 2014. The company reported a maiden profit of US$8.4m post tax for FY2014, it has recently announced our US$10.6m profit for FY2015, making Mineral Commodities one of the few mineral sands companies to be currently operating profitably, as previously stated in a recent report by Mirabaud.
Tormin’s exceptional grade ranks it as one of the, if not the, highest grade minerals sands deposit in the world. When production started the resource grade was 49.9% total heavy minerals, comprising 16.99% ilmenite, 3.77% zircon, 0.66% rutile and 30.90% garnet. Although the resource size is small, the beach is being actively replenished. Going forward, Mineral Commodities has secured access to the remaining areas of the mining lease, as well as having potential to process the offshore areas, resulting in the confidence to commit significant capital to a plant optimisation and expansion, as there is significantly more mineralised material than previously understood.
The Company was pleased to advise in 2015, that MSR has been granted a new prospecting right by the Department of Mineral Resources – South Africa (“DMR”). The awarded prospecting right represents an area of approximately 10,500 ha in size seaward from its current mining (Tormin mine) and prospecting areas.
The awarding of this right extends MSR’s prospecting area up to 10km offshore from its current mining area. The prospecting area is to be investigated for its offshore heavy mineral sand potential that is currently the source of replenishment taking place on the beach held under mining rights.
MSR has conducted a bathymetric and sub-bottom sea floor profiling geophysical survey over the surf zone area held under PR 10036. The survey, conducted by an independent firm, will provide detailed information that is to be used to plan an underwater exploration drill sampling campaign. This survey is in support of the aeromagnetic and radiometric aerial survey work done during 2014 by Xcalibur Geophysics. The 2014 survey identified off-shore heavy mineral sand exploration targets.
In conjunction with offshore bathymetric studies, the Company finalised the selection of a specialised offshore drilling and mining sampler contractor who will mobilise to site in the second quarter of 2016 to conduct resource drilling and sampling of the surf zone area i.e. the area between the low tide and the wave crest formation. The objective of this program is to achieve an offshore Inferred JORC resource.
In addition to the awarded rights, MSR has lodged a new prospecting permit application along the beach and surf zone north of its current mining operations. This application represents a target area of approximately 24km along the coastline. Historical exploration work by non-related parties has indicated the area is prospective for heavy mineral sand deposits. This application is subject to a full public participation process and an environmental impact assessment for bulk sampling as is required under South African legislation.
The above activities are indicative of the long term plans of MSR to extend the heavy mineral sand resource of its Tormin mining operation and underpin the economic viability of its current operations. It is our aim that these improvements will continue to improve the profitability of Tormin and continue to provide value to our shareholders, stakeholders, employees and wider community.
Xolobeni Mineral Sands Project
The Company holds the prospecting rights to four of the five blocks in the Xolobeni Mineral Sands Project. A Mining Right Application was accepted in April 2015 by the DMR and triggered the Public Participation Process for the Environmental Scoping Report Submission. The Public Participation Process resulted in the submission of the Environmental Scoping Report during the first half of 2015.
The Company made good progress throughout the year with its consultants to conduct all necessary baseline and technical studies to move the project through to the submission of an Environmental Impact Assessment (“EIA”) Report, which is required as part of the Mining Right Application process.
The Company is maintaining its efforts to conclude baseline studies within the regulatory timeframes.