iluka eucla project update

http://imagesignal.comsec.com.au/asxdata/20080221/pdf/00814049.pdf


a good read for DRX followers...

ILU is a billion dollar company ($1.1b), DRX is micro ($24m)

and Iluka say the Zircon and other HM at their Eucla discoveries will be the "cornerstone" of the company going forward. It will be a "core element of Iluka's cash flow and earnings!


So just how much is DRXs discovery really worth, if this is a company mover for a billion dollar business like Iluka, the biggest Zircon producer in the world.


Cyclone (DRX) will be comparible to Ambrosia (ILU) quite soon. It is the smaller of the 2 Iluka discoveries, the bigger being "Jacinth" so total for ILU, who are much further down the track are Totals 239mT / 4% HM.

[U]Ambrosia[/U] 86mT / HM Tonnes 2.5/ 3.0% HM/ Zircon 50% / Ilmenite 23% / Rutile 5%
[U]Cyclone[/U] 60mT / HM Tonnes 1.8/ 3.1% HM/ Zircon 41% / Leucoxene 42%/ Ilmenite 10% / Rutile 3%


Product Prices (current average)

Zircon AUD $833 per T
Rutile AUD $555 per T
Leucoxene AUD $422 per T
Ilmenite AUD $88 per T


If we look at the minerals assemblage of both per T in $$ value

Ambrosia (ILU) = Total $464.49 per T
Cyclone (DRX) = Total $544.22 per T


This is why DRX says Cyclone is attractive, it has the higher value Leucoxene in the mix giving a 17.1% per T extra value.

Given that this is only an "initial" resource from DRX, I think the upside from here is excellent.