Tiomin forges ahead at Kwale

Armed with a positive feasibility study, Tiomin Resources (TIO-T) is seeking financing for its Kwale heavy mineral sands project, on the coast of Kenya.

According to South African-based LTA Process Engineering and Australian-based Ausenco, Kwale is capable of supporting 14 years of commercial production at a capital cost of US$137 million. Approximately 300,000 tonnes of ilmenite, 75,000 tonnes of rutile and 37,000 tonnes of zircon would be produced in the first six years.

Payback is anticipated in 3.5 years, and roughly US$47 million in cash flow would be generated annually, based on current commodity prices.

Resources at Kwale are divided among three adjacent deposits collectively containing 4 million tonnes of ilmenite, 1 million tonnes of rutile and 600,000 tonnes of premium zircon in 200 million tonnes of sand. Ilmenite and rutile are used primarily in the fabrication of pigments and titanium metal, whereas zircon is used in ceramic glazes and foundry applications.

Tiomin expects to receive all necessary environmental and mining permits by year-end. Construction would be begin shortly thereafter, followed by commercial production in late 2002.

Tiomin has retained Barclays Bank of London to help raise the necessary funds.

Pangea Goldfields (PGD-T) holds a 20% net profits royalty in the Kwale project.