AIM-listed Savannah Resources, through its consortium agreement with international mining and metals company Rio Tinto, aims to develop one of the largest accumulations of heavy minerals sands in Africa.
The partners have already defined a 4.4 Bt mineral sands resource that could support the development of a large scale mine able to produce up to 600 000 tpa of heavy mineral sands product as early as 2020 says CEO David Archer.
The consortium between Savannah and Rio Tinto became operative in October 2016, and combines Savannah’s Jangamo project with Rio Tinto’s adjacent Mutamba project, which includes three deposit areas – Jangamo, Dongane and Ravene – as well as the Chilubane deposit, which is located 180 km to the south west of the Mutamba project.
As per the agreement, Savannah is the operator of the project and may earn up to a 51% interest in the combined project as it moves towards production through scoping, pre-feasibility and feasibility studies, while Rio Tinto will be providing all its existing camp, facilities and associated equipment.
The consortium agreement between the parties includes an offtake agreement on commercial terms for the sale of 100% of production to Rio Tinto or an affiliate of Rio Tinto.
Mutamba’s total 4.4 Bt mineral resource, which grades at 3.9% total heavy minerals (THM), comprises both indicated and inferred category material containing ilmenite, rutile and zircon.
This includes a high-grade portion of 92 Mt grading at 6.2% THM, which was defined at Ravene. “Importantly, significant potential remains to expand the resource beyond its current boundaries, which will be the focus of future exploration activities,” states Archer.
“Based on the prospectivity of the area and the significant resource potential defined to date, we are confident that there is excellent potential to establish the Mutamba project as a leading HMS producer,” Archer highlights.
“Savannah’s overall objective is to build, together with Rio Tinto, a commercial mineral sands presence in Mozambique, delivering, via Rio Tinto’s offtake, a stable supply of titanium feedstock to global markets,” he highlights.
The main strategy for the company this year is the completion of the pre-feasibility study (PFS) and the granting of its three mining lease applications, covering a total area of 417.32 km².
Mineral sands expert TZMI was appointed to complete this phase of the work.
“The PFS is targeted for completion in early 2019 and will be a major milestone for the company as it will further define the commercial potential of Mutamba whilst also resulting in Savannah earning a 35% interest in the Mutamba consortium,” he notes.
“Besides work on the PFS, in August 2017 construction of a pilot plant commenced.
“We have developed a 20 tpa pilot plant at our project site at Jangamo, which was completed on time and on budget in December 2017.
“The plant will be producing bulk samples for metallurgical test work and analysis. We have a very active programme of resource evaluation and economic studies,” he comments.
The Mutamba project has the potential for the definition of a large orebody able to sustain a significant mining operation.
The mineralisation is amenable to dry mining and dredge mining in parts, with ilmenite being the dominant heavy mineral present.
“The objective is therefore to convert an exploration tenement into a fully granted mining lease which is a prerequisite to a mine development,” Archer explains.
Stage one of the Mutamba PFS is well advanced and includes a gap analysis, options review, project planning and budget finalisation for stage two of the PFS.
Planning by TZMI has been undertaken over the recent months as the consortium prepares to enter into stage 2 of the PFS. A sequenced approach to the PFS has been developed that will ensure that reports and studies build on each other.
The first of these studies have been identified and preparations underway for their roll out. Once complete, these studies will inform and lead the remaining work required to complete the PFS.
The first set of studies includes:
- Mining methods analysis and strategic scheduling;
- Tailings design and storage options;
- Metallurgical test work programme, the results of which will help inform the engineering design;
- Port options study; and
- Hydrology study to update, calibrate and validate the existing models.
Further, Archer comments that leading Mozambique environmental consultants IMPACTO and ERM was awarded the contract to conduct environmental studies for the project.
“The environmental studies are a key requirement for the lodging of a mining concession for any potential development.”
Savannah is planning on moving onto a full feasibility study in 2019 with hope for a final investment decision towards the end of that same year.
Archer adds that’s construction will commence at Mutamba by 2020 and first production is expected in late 2020 or early 2021.