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Iluka Resources approves Cataby mineral sands project at Perth Basin

Iluka Resources Ltd. approved the development of its Cataby mineral sands deposit, part of its Perth Basin property in Western Australia, after entering take-or-pay off-take agreements for at least 175,000 tonnes of synthetic rutile per year.

The company noted in its Dec. 12 statement that the off-take agreements represent 85% of its synthetic rutile production for at least four years.

The open pit development has a net present value of A$390 million, using a 10% discount rate, with a 36% internal rate of return and a two-year payback period.

Construction will cost A$250 million to A$275 million and take 18 months to complete, with initial production anticipated by June 2019.

Cataby is expected to produce about 370,000 tonnes per year of chloride ilmenite, which will be processed into about 200,000 tonnes of synthetic rutile per year at Iluka's kiln in Capel. Cash costs are pegged at A$700/tonne.

The operation will also produce 50,000 t/y of zircon and 30,000 t/y of rutile over an 8.5-year mine life, with a potential four-year extension subject to accessibility of additional reserves.

Cataby hosts proven and probable reserves totaling 120 million tonnes grading 5.7% heavy minerals, while the development plan comprises 80 million tonnes grading 6.6% heavy minerals. The heavy mineral assemblage comprises about 60% ilmenite, 9% zircon and 4% rutile.