PERTH, May 27, 2010 ASX-listed explorer Diatreme Resources has started a prefeasibility study on its Cyclone heavy minerals deposit, in Western Australia, it reported on Thursday.
The company plans to complete the study by early 2011, chairperson Anthony Fawdon told shareholders on Thursday.
In September, Diatreme reported a revised Joint Ore Reserve Committee-compliant resource for the Cyclone project, lifting the resource estimate to 98,4-million tons, at a grade of 2,9% heavy minerals.
Fawdon said that since then, further mineralisation of apparent similar size and quality to the underlying mineralisation, had been identified in the overburden. This overburden mineralisation was being incorporated into the current resource.
"The scoping study results, released earlier this year, boosted our plans for a new zircon mine at the Eucla basin. The study showed the potential for Cyclone to be made into a profitable mine, producing around 280 000 t of concentrate each year, at a mining rate of nine-million tons a year.
"It also forecast an average annual profit of A$50-million for ten years, with projected capital expenditure of A$311-million," Fawdon said.
The ASX-listed explorer was now in discussions with offshore groups regarding funding arrangements for Cyclone.
"As we advance through 2010, the company is continuing discussions with international industry groups with a view to cofunding the development process of the Wanna heavy mineral sands project, which encompasses the zircon rich Cyclone deposit. Any development in this region of Western Australia would include the Cyclone resource and satellite resources feeding into a central mining operation," Fawdon said.
"It is a primary aim of your company to see the Cyclone deposit develop into a profitable mining operation, starting in 2014," he told shareholders.
