A scoping study over Savannah Resources Plc's Mozambique-based Mutamba mineral sands joint venture with Rio Tinto estimated a pretax net present value, discounted at 10%, of US$154 million and an internal rate of return of 19%.
The study is based on an average annual production of 456,000 tonnes of ilmenite and 118,000 tonnes of nonmagnetic concentrate from 2020, assuming prices of US$185 per tonne of ilmenite and US$250 per tonne of nonmagnetic concentrate, as well as a resource of 451 million tonnes grading 6% total heavy mineral.
Preproduction CapEx is pegged at US$152 million, plus US$74 million for contingency. Payback for the project is expected in five years.
Revenue over an initial mine life of 30 years is forecast at US$3.53 billion, and cash operating costs are set to total US$2.16 billion.
Savannah's stake in the Mutamba consortium increased to 20% upon delivery of the scoping study and could go up to 35% once the prefeasibility study has been delivered.