MZI Resources Ltd makes record $9.8M mineral sands shipment
Date
6/30/2016 6:38:20 AM
(MENAFN- ProactiveInvestors - Australia) The M.V. Thor Infinity being loaded with Keysbrook leucoxene
MZI Resources Ltd (ASX:MZI) has made a record 15,250 tonne shipment of the mineral sands from its flagship Keysbrook project, 70 kilometres south of Perth in Western Australia.
Sale proceeds from the shipment totalling $9.8 million have been recorded for the June quarter with payment to be received in July.
Product sales to date have been in zircon and L70, this is the first shipment to contain the higher grade leucoxene product, L88, representing a milestone for MZI.
Keysbrook will be the world’s biggest primary producer of leucoxene, a titanium bearing mineral.
Trevor Matthews, managing director, commented: “The commencement of sales of our premium L88 product is a very important milestone for Keysbrook in this early stage of its operational life.
“Our continued progress is particularly encouraging coming amid signs of improving global demand for titanium dioxide feedstocks from both traditional end-users and new emerging sectors that bode well for prices in the medium and long term.”
Product sales update
Sales of all products since shipments commenced in late December 2015 now total 31,400 tonnes, generating total sales revenue of $18.2 million.
June quarter product sales total circa 19,000 tonnes.
The record bulk shipment from the Port of Bunbury comprises the maiden cargo of premium L88 totalling approximately 8,250 tonnes, and a second cargo of L70 totalling approximately 7,000 tonnes.
Analysis
The maiden shipment of L88 is a significant milestone for MZI and bodes well for strong June quarter sales figures.
The Keysbrook project represents the largest, single-project leucoxene producer in the world. It is a long life asset with significant potential for expansion.
MZI is a globally competitive low cost heavy mineral sands producer with the majority of expected production committed under long term contracts.
The company is in discussions with multiple parties for uncommitted volumes.
MZI recently restructured a US$37.5 million senior debt facility providing improved financial flexibility through a term extension by 27 months and the lowering of quarterly repayments.
MZI is covered by three brokers being Argonaut, Bell Potter and Patersons Securities. All brokers have a Buy rating on the stock and price targets ranging from $0.45 to $0.70 per share.
With the stock currently trading at $0.27 per share, this represents an upside of up to 160% to the broker price targets. <
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