(MENAFN - ProactiveInvestors - Australia) MZI Resources (ASX:MZI) has commenced detailed engineering and design at its advanced zircon / leucoxene rich mineral sands project at Keysbrook in Western Australia.
This follows a Feasibility study which found Keysbrook would have a very high rate of project return of 71% and payback period of less than 15 months.
So advanced is Keysbrook, that MZI plans to start construction at Keysbrook in early 2013 and commence operations in late 2013.
Mining is planned to continue at Keysbrook for potentially 11 years.
MZI has appointed of MSP Engineering to conduct the next phase of front-end engineering and design work (FEED) in preparation for the commencement of construction.
MZI chief executive Trevor Matthews said that with the Feasibility Study completed, the key pieces of the Keysbrook project were coming together rapidly.
"By conducting the FEED work in parallel with the financing and commercial negotiations, including tenders for major plant, equipment and key construction and operations contracts, we will be well-placed to start construction early next year," Matthews said.
MSP, which prepared the engineering and capital cost report for the recently released Feasibility Study on Keysbrook, will undertake the FEED work at the same time as MZI advances funding and commercial negotiations.
This will ensure the Project remains on track for commissioning in the December Quarter of 2013.
The Keysbrook zircon / leucoxene rich mineral sands project at Keysbrook in the south west of Western Australia.
The two shires over which the deposit is situated have given the project Development Approvals and Extractive Industry Licences.
These follow the Environmental Approval previously granted by the Western Australian Minister for Environment.
MZI intends to fund Keysbrook through the combination of cash on hand and a project debt facility.
The Company's cash position was boosted recently by the US11.2 million sale of its third shipment of high value zircon-rutile Heavy Mineral Concentrate from the Lethbridge South mine in the Tiwi Islands.
MZI expects a fourth and final shipment from Lethbridge South early in the March Quarter of 2013.
In addition to this, fellow WA mineral sands group Doral Pty Ltd has an option to acquire 250 million shares in MZI for 2.3c a share which would inject a further 5.75 million cash into MZI.
MZI had 4 million cash at 30 September 2012.