Image Resources has expanded its mineral sands portfolio by purchasing a tenements package from Sheffield Resources in the Eneabba mining district in Western Australia for $24 million.
Boasting an estimated mineral resource of 211 million tonnes at 3 per cent total heavy minerals (THM), amounting to 6.3 million tonnes contained THM, the package spans eight exploration licenses, three mining leases and one retention licence.
The largest project, Yandanooka, contains an estimated mineral resource of 60 million tonnes at 3 percent THM, amounting to 1.8 million tonnes of THM.
Image will acquire the tenements package from Sheffield for $24 million in cash, paid out from the company’s existing cash reserves (approximately $50 million at the end of the September quarter).
“Image is pleased to have the opportunity to acquire a package of tenements that only rarely comes onto the market,” Image managing director and chief executive officer Patrick Mutz said.
“Sheffield’s divestment decision coincides positively with Image’s desire to identify and secure potential development projects outside of its current portfolio, as a critical component of its growth strategy.”
The acquisition sees Image expand its mineral resource base currently represented by ventures such as the Boonanarring mineral sands project in WA, the Atlas development project located 90 kilometres north of Boonanarring and the Bidaminna project also in WA’s Mid West.
Sheffield will look to use the cash proceeds from the transaction towards a $10 million obligation it has with its Kimberley Mineral Sands joint venture – the company representing the prospective Thunderbird mineral sands project in WA.
Sheffield executive chairman Bruce Griffin said the transaction positions the company strongly as it looks to develop Thunderbird.
“Sheffield is very pleased to have realised meaningful value for our non-core Eneabba project, consistent with Sheffield’s strategy of focussing on our core Thunderbird asset,” he said.
“It is particularly pleasing to be able to divest Eneabba to Image given the strong alignment of these assets to their growth strategy.”
The sale of the Eneabba tenements is conditional upon obtaining the necessary regulatory approvals, as well as acquiring the approval of a third-party royalty holder to the proposed transaction. These conditions are expected to be satisfied in early 2022.