(MENAFN - ProactiveInvestors - Australia) Image Resources (ASX:IMA) has upped the ante at the North Perth mineral sands project, receiving confirmation from the Western Australian Environmental Protection Authority that it will be assessed at the level of Public Environmental Review.
Recently, Image indicated it had secured commitments to a recent placement exceeding 6.5 million from its broker.
The funds to be raised, together with current working capital, would fund the North Basin project bankable feasibility study (BFS), on its Boonanarring and Atlas mineral sands project.
With this raising, Image will move closer toward the important milestone of delivering production in 2014.
Today's announcement on associated environmental and approvals work is part of that process.
In fact, Image had already anticipated assessment advice from the EPA and it was included in the scope of the feasibility study.
Environmental field work and related studies are slated to commence next week.
A bulk sample has been composited from drill samples to represent the mineralisation within the proposed mining outlines at Boonanarring.
This was delivered to the AML laboratories in Perth on 16th November, with testwork commencing this week.
Objective
The objective of the programme is to obtain information on the processing characteristics of the mineralisation. This will be used for the process flowsheet and plant design work which will commence in December 2012.
Equally importantly, the testwork will provide adequate quantities of final product grade Ilmenite which can be sent to potential customers to allow them to carry out their own acceptance testing.
This is a critical step towards commencement of discussions with future customers on off-take agreements and contributions to project funding.
Ilmenite Product attractive to customers
Image obtained preliminary indications of product quality from earlier testwork carried out in May this year. This indicated that Ilmenites from Boonanarring are expected to meet all the requirements that would make them comparably attractive to future customers.
Ilmenites with these characteristics demand a premium to current prices:
- 55% TiO2 (the range of world deposits is normally between 40% and 60% TiO2)
- Coarse grained
- Low calcium oxide levels (important in slag plant feed)
- Low niobium, vanadium and chrome level (important in pigment plant feed)
- Low Uranium and Thorium levels (important to all end users)
Analysis
There are plenty of catalysts ahead for Image including completion of the additional resource estimates at Boonanarring, commencement of process test work and preparation of marketing samples of zircon and ilmenite.
Image has a 10.5 Mt JORC Measured and Indicated Resource at Boonanarring as part of 52.9 Mt overall in the North Perth Basin.
Resource upgrades are expected to bring the Boonanarring deposit alone to 15-25 Mt. The North Perth Basin project contains a high grade resource, with the majority on cleared freehold farmland.
Infrastructure in the area is excellent with the Brand Highway, power and gas lines all crossing the project area.
Image plans to construct a 3.3 Mt per annum single mine and wet plant operation at Boonanarring with production to commence in 2014.
Image also holds a number of other major deposits in the North Perth Basin project with significant upside potential including at Atlas, Red Gully and Gingin South.
We consider that the share price has room to regain its upward climb with these milestones being attained.
