PERTH, Apr. 13, 2010 Dual-listed Mineral Deposits (MDL) on Tuesday reported that it planned to spinout its $400-million Grande C te mineral sands project, in Senegal, through an initial public offering (IPO).
"On account of the size of the Grande C te project and ongoing development potential at the company's Sabodala gold mine, the board of MDL has concluded that the interest of shareholders would be best met by spinning out the Grande C te project, and financing it external to MDL, through a separate IPO, MD Jeff Williams said.
The board of TSX- and ASX-listed MDL has now mandated management to appoint advisers to advance this initiative.
Company CFO Rick Sharp said that the IPO was most likely to take place on the ASX, and would ideally be done before the end of the year.
"It is undecided yet, but most likely the ASX. It really is early days and we are just starting along on that journey."
Sharp noted that while the capital expenditure for the Grande C te project was estimated to be around $400-million, a minimum of 50% of this would be funded through equity raised either directly from the IPO, or over time.
"We haven't decided upon that yet," he added.
The Grande C te project, which was set to come on line in 2013, would produce both zircon and ilmenite as the main products, with minor quantities of rutile and leucoxene. Previously, the focus was on the production of only zircon as the main output, but recent test work had demonstrated that with a revised circuit, a good quality ilmenite product could be produced in addition to the high-quality zircon expected.
The orebody size and characteristics of the Grande C te project provide for a large-scale, low-cost dredging operation using conventional technologies similar to MDL s previous operations.
Anticipated annual production, based on between 48-million tons and 50-million tons a year of dredge/floating concentrator throughput, is estimated to be between 75 000 t and 80 000 t of zircon, between 550 000 t and 600 000 t of ilmenite, 6 000 t of rutile, and 9 000 t of leucoxene.
Williams noted that from a market entry perspective, the projected timing of the project coming on stream in early 2013, is predicted to coincide with a shortfall in supply, compared with demand for both zircon and ilmenite.
Williams said that additional infill drilling is being undertaken in the Lompoul region of the mining concession, which is being used as the basis for development of a revised dredge path for the initial 14 years of operation.
Current expectations are for heavy mineral grades averaging between 1,7% and 1,8% over this period. The initial dredge path would cover an area representing about 40% of the mining concession.
Accordingly, a mine life of at least 25 years is supported by the resource.
"On account of the size of the Grande C te project and ongoing development potential at the company's Sabodala gold mine, the board of MDL has concluded that the interest of shareholders would be best met by spinning out the Grande C te project, and financing it external to MDL, through a separate IPO, MD Jeff Williams said.
The board of TSX- and ASX-listed MDL has now mandated management to appoint advisers to advance this initiative.
Company CFO Rick Sharp said that the IPO was most likely to take place on the ASX, and would ideally be done before the end of the year.
"It is undecided yet, but most likely the ASX. It really is early days and we are just starting along on that journey."
Sharp noted that while the capital expenditure for the Grande C te project was estimated to be around $400-million, a minimum of 50% of this would be funded through equity raised either directly from the IPO, or over time.
"We haven't decided upon that yet," he added.
The Grande C te project, which was set to come on line in 2013, would produce both zircon and ilmenite as the main products, with minor quantities of rutile and leucoxene. Previously, the focus was on the production of only zircon as the main output, but recent test work had demonstrated that with a revised circuit, a good quality ilmenite product could be produced in addition to the high-quality zircon expected.
The orebody size and characteristics of the Grande C te project provide for a large-scale, low-cost dredging operation using conventional technologies similar to MDL s previous operations.
Anticipated annual production, based on between 48-million tons and 50-million tons a year of dredge/floating concentrator throughput, is estimated to be between 75 000 t and 80 000 t of zircon, between 550 000 t and 600 000 t of ilmenite, 6 000 t of rutile, and 9 000 t of leucoxene.
Williams noted that from a market entry perspective, the projected timing of the project coming on stream in early 2013, is predicted to coincide with a shortfall in supply, compared with demand for both zircon and ilmenite.
Williams said that additional infill drilling is being undertaken in the Lompoul region of the mining concession, which is being used as the basis for development of a revised dredge path for the initial 14 years of operation.
Current expectations are for heavy mineral grades averaging between 1,7% and 1,8% over this period. The initial dredge path would cover an area representing about 40% of the mining concession.
Accordingly, a mine life of at least 25 years is supported by the resource.
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