Tiomin announces positive prefeasibility on its heavy mineral

A 2-part prefeasibility study has confirmed the viability of Tiomin Resources’ (ME) heavy mineral sands project on Quebec’s North Shore.

The first part studied the establishment of a mining and mineral separation plant at Natashquan, together with storage and wharf facilities. It is estimated the operation would run year-round and that concentrate production would total 476,000 tonnes of magnetite, 190,000 tonnes of ilmenite (titanium), 8,000 tonnes of zircon and 33,000 tonnes of garnet. (As the garnet market is small, Tiomin expects that only 5,000 tonnes can be sold).

The cost of mining and milling heavy mineral concentrate is estimated at US$14.50 per tonne, which would be the second-lowest cost in the world after Quebec Iron and Titanium, a unit of London-based RTZ. The mine life is expected to be well over 50 years.

The second part of the study examined the economic viability of adding value to the magnetite and ilmenite by converting them into direct reduction iron (DRI) and synthetic rutile, respectively.

The study envisaged Sept Isle, Que., as the site of the upgrading facilities. Annual pretax profit at these operations is calculated at $55 million with a 13% internal rate of return and an 8-year payback period.

Were the upgrading facilities established in a cheap natural gas environment (such as Trinidad, the Middle East or the Far East), a dramatic rise in profits would result. If based in the Middle East, for example, overall profitability would be $77 million with a 22% internal rate of return and a 5-year capital payback.

Tiomin’s directors have approved the next stage of development, which will include:

* ore reserve definition for the first 10-20 years of production; * a pilot plant for producing synthetic rutile; and

* location studies for synthetic rutile and DRI plants.

In addition, the company is examining market outlets for its products and is seeking partners, mainly in the iron and titanium dioxide industries.