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Savannah Resources’ wholly-owned subsidiary, AME East Africa, has formed a joint venture (JV) with Rio Tinto International to develop a large-scale heavy mineral sands project in Mozambique, South Africa.
Savannah’s Jangamo licence will be combined with Rio Tinto’s Mutamba titanium mine and its adjacent Dongane and Chilubane projects to form a combined prospect called Mutamba/Jangamo project.
The JV will be operated by Savannah with an initial 10% interest in the combined project, which may increase to up to 51% as the project moves through various stages by undertaking scoping studies, and pre-feasibility and feasibility studies.
Rio-Tinto may enter the off-take sales contract and purchase 100% of the production of heavy mineral concentrate (HMC) from any of the mines.
The scoping study for the project is expected to commence in November 2016 and is scheduled for completion by early-2017.
The Mutamba/Jangamo project, which includes Mutamba, Dongane and Jangamo prospects, is located approximately 450km away from Maputo, the capital city of Mozambique, and 40km from the ports of Inhambane and Maxixie.
The prospects cover a total area of approximately 602km²; including licence numbers 562L, comprised of the Chilubane mine (141km²) in Gaza Province; 566L, made up of the Dongane mine (163.6km²) in Inhambane Province; 1336L, comprised of the Mutamba prospect (118.8km²) in Inhambane Province; and exploration licence 3617L, including the Jangamo exploration project (180km²) in the same province.
Rio Tinto affiliate signed an agreement with the Mozambique Government and received exclusive rights to explore the areas.
The four areas have similar mineralisation, with large parts comprised of prograding, siliciclastic sediments that host heavy mineral deposits. The heavy minerals are formed from the Limpopo River over a long period and are present along ancient and current coast lines.
Eight large, separate mineralised bodies have been identified during the drilling, which suggests the mines have a combined potential to host between 140 million tonnes (Mt) and 170Mt of ilmenite content, as well as a further 10Mt-15Mt of zircon and rutile.
The project is expected to hold 65Mt of inferred mineral resource at 4.2% total heavy minerals at 2.5% grading alone at Savannah’s Jangamo exploration project. Rio Tinto’s Mutamba and Dongane prospects, together with Chilubane mine have an exploration target of 7 billion tonnes (Bt) to 12.0Bt at a grade ranging from 3% to 4.5% THM.
Conventional dry mining methods are well suited to mine the project. Feed from the mine will be fed to a conventional heavy mineral separation circuit, where the mineral products such as ilmenite, a dominant heavy mineral; rutile; and zircon will be extracted.
Rio Tinto’s existing infrastructure, including the camp and equipment, will be used for the combined project, which can also access the existing roads, grid power, water and port infrastructure easily.
The Mutamba and Jangamo projects have the potential to contain a large ore body that can sustain significant mining operations for more than 20 years.
Savannah plans to identify high-grade strandline deposits of a significant size to support the first stage development of the joint development project.
The company currently expects a mineable inventory of 200Mt at 7% THM for the initial mine development to produce approximately 600 thousand tonnes per annum (ktpa) of ilmenite and 40ktpa of rutile plus zircon concentrate.
The development objectives, the company believes, can be met only by consolidating the Mutamba and Jangamo projects and hence it was considered as a sensible strategy to form a consortium that enables aggregation of the mineral reserves.