MRG Metals has further solidified its Corridor Sands heavy mineral sands project in Mozambique after a scoping study determined its net present value (NPV) to be $413 million.
IHC Mining completed a scoping study and preliminary economic assessment (PEA) for the Corridor Central and Corridor South projects, which incorporated conservative commodity pricing from independent consultant TZMI.
MRG chair Andrew Van Der Zwan said the study gave the board confidence of an exceptional, robust mine development opportunity at Corridor Sands.
“An NPV of $413M is indicated, which, given the current market capitalisation of MRG ($9 million), is highly exciting for MRG shareholders,” he said.
“This scoping study and PEA assumed mineral processing locally in the mining tenements to generate ilmenite, titanomagnetite and non-magnetic concentrates of the HMC (heavy mineral concentrate) prior to shipping.”
Van Der Zwan said as MRG progresses to the pre-feasibility stage of the project, it has already identified several opportunities to further improve the NPV of the project. This includes considering reduced capital expenditure via different on-site processing options, while further metallurgical test work of non-magnetic concentrate is required, with the goal to increase its currently low value per tonne contribution to the potential mine economics.
And that’s not all.
“The bulk sample utilised during the metallurgical study, scoping study and PEA was sourced from the Koko Massava deposit, which was the basis for the TZMI concentrate pricing,” Van Der Zwan said.
“However, mine start-up is planned at (the) Nhacutse/Poiombo (deposits) where comprehensive mineralogy results show a higher value mineral assemblage. Further metallurgical study of a Nhacutse/Poiombo bulk sample is planned to review concentrate pricing.”
Van Der Zwan said there was also the potential to incorporate new zones of very high valuable heavy mineral (VHM)/high total heavy mineral (THM), which are situated east of the existing Koko Massava and Nhacutse/Poiombo mineral resources and could also improve the NPV.
MRG has also secured the option to acquire the Jangamo heavy mineral sands project from Savannah Resources after signing a binding heads of agreement (HoA) with Savannah subsidiary AME East Africa.
MRG has been given an exclusive 45-day due diligence period to assess the Jangamo project.
If MRG chooses to proceed with the transaction, an option agreement will be executed, providing MRG a 16-month option period to make the acquisition.
Jangamo’s mining licence is well progressed and operations could commence as early as 2023 – a couple of years ahead of MRG’s Corridor Sands project – which would enable MRG to take advantage of the current favourable market conditions earlier.
MRG also sees Jangamo’s higher VHM potential as an attraction.