Strandline Resources (ASX: STA) has taken another significant step towards bringing its Coburn mineral sands project into production, securing a binding offtake agreement for the substantial portion of the premium zircon product for the first five years of production.
The Agreement is with Industrie Bitossi s.p.a, one of the world’s largest zircon consumers, based primarily in the high-quality European ceramics market.
The zircon sales covered by the Agreement are expected to generate approximately 18% of Coburn’s forecast total revenue, based on the pricing structure contained in the Agreement..
With the zircon concentrate and ilmenite sales agreements also announced, Strandline now has ~66% of Coburn’s forecast revenue secured via binding offtake contracts.
The remaining Project revenue is expected to be from the balance of premium finished zircon and rutile product (representing ~34% of forecast revenue). Offtake agreements for these remaining products are advancing well.
Coburn’s forecast average annual production of premium finished zircon is 34,000 tonnes.
The zircon quality has been confirmed as a ceramic-grade specification (containing +66% ZrO2, good whiteness properties with low impurities) and will be used in the production of micronized zirconium silicate and downstream products, primarily used in ceramic applications.
As outlined in the Definitive Feasibility Study (DFS), Coburn’s high unit value orebody assemblage, long life and low costs underpin strong financial returns for Strandline, with a rapid payback period of 2.2 years from the start of production and a first quartile revenue-to-cost ratio of 2.2.
Strandline Managing Director Luke Graham said the signing of another long-term offtake agreement with an industry leader provides further endorsement of Coburn and the high quality of its mineral sands products.
“With two-thirds of the project’s revenue now underwritten by binding sales contracts, we are well on the way to securing funding and development of this world-class project.” Mr Graham said.
