Article from 'The Advertiser'(S. Aust) last week. Cheers John
'The Advertiser' Tuesday 18th September 2007 Mineral sands boom idyll Cameron England September 18, 2007 02:15am
AUSTRALIAN Zircon's mineral sands mine could hardly be better placed.
From the edge of the mine's tailings pit, chief executive Jim Wilton points out where the train line to Adelaide runs – just 100m or so from where the company's dry mineral separation plant will turn out the finished zircon, rutile and ilmenite concentrates.
The mine's location, at Mindarie, about 60km south of Loxton near the Victorian border, also helps with staff hiring and retention.
Adelaide-based Australian Zircon is currently commissioning its mining and processing equipment, and expects to be processing its first mineral sands concentrates within the month.
Mr Wilton joined the company last year, after 27 years in the resources and energy game, mainly in Queensland.
He will oversee a mine which expects to operate for at least 10 years – more likely 15 or more – shipping about 2000 tonnes of mineral sands concentrates per week.
The mine will employ about 70 people, and unlike most South Australia mines, they will be able to go home after each shift.
Mr Wilton said the rural, rather than remote location of the mine, was a selling point, and a major factor in the company having so far not had recruitment issues.
"We've got the majority of people on board now that we need to get the thing up and running," Mr Wilton said.
"We've started commissioning the front end of the plant and are still building the back end of the plant which is the separation facilities. That will keep on going for the rest of this month.
"But we expect that in a week's time we will produce some semi-processed material and by the end of the month we're expecting to have some final product."
The company will ship its product in containers through the Port Adelaide, adding: "(Rail operator Genesee & Wyoming) can look at shipping our product three times a week for the next 10 years, which is a good base-load business when you take into account the vagaries of the grain market."
Recently, the project received a boost when some Chinese customers said they were also interested in buying some low grade product which was previously thought to be waste.
"This is now of some attraction to some Chinese customers, so we're finding more saleable product per tonne of ore – it's not prime . . . but there's a margin for us," Mr Wilton said. Zircon, which sells for $US850-$US900 per tonne, will provide about two thirds of the revenue for the mine and is primarily used in ceramics production.
Mr Wilton said there was also plenty of exploration upside at the site.
"We've got a reserve base here of 60 million tonnes which is derived from a resource base of 170 million tonnes,"
"We really only proved up reserves to support a practicable mine operation.
"There's brownfields expansion potential . . . on top of that, we've got about 16,000sq/km of exploration acreage throughout the Murray Basin, which is a pretty large tract of land."
The company also has the right to earn up to 80 per cent of Austpac Resources's WIM 150 resource near Horsham in the southern Murray Basin.
"We've started a pre-feasibility study on that now . . . and we hope and expect that will lead to a bankable feasibility study next year, and at the completion of that we will have earn an 80 per cent interest."
The mining process is also relatively simple, with the mineral sands lying in bands just 15-25m below the surface.
Australian Zircon shares closed at xxc yesterday, up xxc.
