Assuming the following prices and annual production throughput/distribution (best case scenario for Kwale given recent price hikes in the industry + max production throughput), these are the weighted average prices and revenue :
Kwale deposit (Kenya) :
Ilmenite : 500.000 t @ 200 US$/t
Rutile : 95.000 t @ 1100 US$/t
Zircon : 40.000 t @ 1580 US$/t
Average Weighted Price : 420 US$/t
Annual Revenue : 265 Million US$
Ranobe Toliara deposit (Madagascar) :
Ilmenite : 500.000 t @ 200 US$/t
Rutile : 20.000 t @ 1100 US$/t
Zircon : 40.000 t @ 1580 US$/t
Average Weighted Price : 330 US$/t
Annual Revenue : 185 Million US$
Give the low Rutile distribution for Toliara (2% VS 13% for Kwale) and similar Zircon Distribution (6%), the only way I see Toliara being competitive/economically profitable compared to Kwale is either :
1/ Costs of production for Toliara should be much lower (6.2% HM grade VS 4.3% HM Grade but could the difference in grade translate to much lower costs ? and by how much ?)
2/ Production throughput for Toliara should be much higher (given the deposit seems much bigger : 850 MT @ 6.2% for Toliara VS 150 Mt @ 4.3% for Kawle, it is possible to either increase annual production or bet on a much longer mine life (20 years ?)). But could the logistics/infrastructure/port in Madagascar support such a big project ?
BSE Price at posting:
28.5¢ Sentiment: Buy Disclosure: Not Held
(20min delay)
