Great write Up in Resourse Rising Stars- Strandline Resources...

Great write Up in Resourse Rising Stars-
Strandline Resources
The market for junior resources companies turned for the better two years ago for a whole range of reasons.

But the upturn has not made the task of juniors with modest market caps raising the funds to get their projects in to production or to expand them any easier.

The answer has been to de-risk projects to the point where big licks of the required finance can be sourced by a sell-down of project equity and/or securing offtake agreements to bankroll a fund raising.

That is the point at which mineral sands developer Strandline (STA) has arrived at its big Coburn project in Western Australia.

Strandline has just released a definitive feasibility study in to the development which put the cost at $A207m-$A257m.

It is a big ask for a company trading at 10c for a $37m market cap, particularly as Strandline is also on the hunt for $US32m for its “starter’’ Fungoni mineral sands project in Tanzania.

But critically for Coburn, the DFS broke it down to two potential development pathways - $A207m for a project producing a heavy mineral concentrate, or $A257m for a project that would produce final products.

That necessarily expands the number of mineral sands processors and consumers that could become involved in Coburn’s development, said by the DFS to have a pre-tax NPV of $A551m and an internal rate of return of 32%.

It is something that Strandline managing director Like Graham made a passing reference to when announcing the DFS results.

“The ability to produce saleable products in both concentrate and final product form opens the door to a wide range of offtake and funding options for Coburn,’’ Graham said.

Progress by Strandline in securing funding/offtake for Coburn is obviously going to be a major re-rating event for the company which most analysts currently estimate is being valued on its Fungoni project alone.

Apart from the bigger net it can now cast with the HMC or final product route at Coburn, Strandline’s task of financing Coburn has been made all that much easier by the dramatic turnaround in mineral sands prices.

The world needs new developments in coming years to meet demand and while Strandline’s Tanzania interests have world-class potential, it will be Coburn’s Australian address that could make all the difference.