Savannah Resources has completed the scoping study at its Mutamba mineral sands project in Mozambique.
The study revealed that the Mutamba has the potential to be financially robust and long life mineral sands project, which is expected to offer better life of mine financial returns with relatively modest capital requirements.
The project is being developed by Savannah and Rio Tinto under a consortium agreement. Savannah holds the right to acquire 51% interest in the project based on the achievement of key milestones.
Currently, Savannah owns 20% interest in the Mutamba mineral sands project
The study said the project has an initial mine life (LOM) of 30 years based on a resource of 451Mt at 6.0% total heavy minerals (THM).
Mutamba project is expected to start the production in 2020 with average annual production of 456,000t of ilmenite and 118,000t of non-magnetic concentrate.
Based on management case two, the project is expected to generate revenue of about $4.23bn, and is expected to have pre-production capital expenditure of $152m.
Savannah has selected TZMI to carry out the study on the development of Mutamba, helping to gather the detailed information, including technical and economic feasibility of the project.
Situated in the Inhambane province of Mozambique, the project’s scoping study is characterised by large scale operation, conventional heavy minerals processing flowsheet, favorable infrastructure setting and logistics and others.
Savannah CEO David Archer said: "The results of the Scoping Study outline the potential for a long life, robust project at a time of increasing demand for titanium feedstocks and strong price growth.
“Mutamba is a tier one deposit that is well placed to provide a long-term, reliable supply of ilmenite, zircon and rutile.”