Kenya’s minister of natural resources has officially approved a special mining lease for Tiomin Resources‘ (TIO-T) Kwale titanium-sands project, about 50 km south of the port city of Mombasa.
The 16-year lease, originally issued in mid-December 2002, after years of review, can be renewed for a further 10 years. The official approval followed a 90-day period of public scrutiny.
The lease gives the junior an exclusive right to mine and process Kwale’s heavy mineral sands. The project has already been given an environmental go ahead; a port facility at Shimoni has also been green-lighted.
A feasibility study completed in 2000 envisaged an open-pit operation producing 330,000 tonnes of ilmenite, 75,000 tonnes of rutile and 37,000 tonnes of zircon annually for the first 6 years. Cash flow was projected at US$40 million per year, resulting in a payback period of three years. Kwale’s total mine life is pegged at 13 years. The capital cost estimate is US$120 million.
Kwale is home to a resource of 200 million tonnes of mineral sands grading 2% ilmenite, 0.5% rutile and 0.3% zircon. The deposit, which comprises two large Pliocene aeolian dunes, is on a 4.5-sq.-km property about 10 km inland from the coast.
Tiomin intends to update the 2000 study to include state-of-the-art mineral separation technology. Construction is slated for 2004.
Looking ahead, Tiomin intends to develop the Kilifi and Mambrui titanium-bearing mineral sands deposits, which lie to the northeast. Extensive mineralization has also been outlined on the Vipingo exploration licence, in the same area.
Tiomin shares were trading 7, or 23% of value, higher at 37 in Toronto following the late-afternoon news on June 27.
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