Wednesday, September 23, 2009

Matilda Moving Forward


Matilda Zircon Limited (ASX: MZI) today announced a significant step forward which could substantially increase its current small Kalimantan zircon operations by entering into a Memorandum of Understanding with local Indonesian group PT Makmur Santosa Energi (PT MSE).

The MOU sets out the principal guidelines, rights and obligations to govern the relationship going forward.  Ultimately Matilda and MSE will jointly own and operate mining projects in Kalimantan.

PT MSE is an Indonesian mining company with various mining interests located in Kalimantan having strong commercial and government relationships.

The first project will involve four zircon rich KP’s (equivalent to Australian mining tenements) and cover a total of some 15,000 hectares in central Kalimantan.

Initial indications show potentially some 9 to 12 million tonnes of zircon sands capable of providing processed zircon oxide in excess of 65% together with good gold credits.  

Matilda will immediately commence staged due diligence studies covering various aspects including geological, land tenement issues, legal, technical, operating and marketing areas.

Kalimantan zircon is renowned to be amongst the world’s best quality particularly with very low iron, low uranium and thorium.

TZMI (an independent mineral sands global consulting and publishing group) has indicated that if processed correctly final zircon product from Kalimantan can be amongst the highest quality in the market.

Should due diligence prove successful it would be proposed to relocate the existing production facility from Sampit to central Kalimantan and commence production 2nd quarter next year at an initial rate of 12,000 tonnes per year and doubling the capacity within 12 months.

The current commodity price for zircon is around USD$900/tonne and projected to increase in 2010 to above USD$1,000/tonne.  It would be expected that operating costs would be in the order of USD$450/tonne and capital costs of AUD$6m. 

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