- Savannah Resources has announced completion of the Mutamba Scoping Study, which concluded there was potential for a financially robust, long-life mineral sands project that was anticipated to provide excellent life of mine financial returns with relatively modest capital requirements.

The Mutamba Mineral Sands Project was being developed by Savannah and Rio Tinto as part of a consortium agreement between the two parties.

Savannah had the right to earn up to a 51% interest in the project, subject to key milestones being met, and by delivering the scoping study Savannah now holds a 20% interest.

CEO David Archer said the results of the study outlined the potential for a long-life, robust project at a time of increasing demand for titanium feedstocks and strong price growth.

"Mutamba is a tier one deposit that is well placed to provide a long-term, reliable supply of ilmenite, zircon and rutile," he said.

"With high-grades at surface, the Project shows potential strong returns over a 30-year mine life. Our Management Case One shows that the Project has a Pre-tax NPV of US$244m and a four year pay-back."


- Initial mine life ('LOM') of 30 years based on a resource of 451Mt at 6.0% total heavy minerals ('THM') (based on a conceptual mine plan utilising 33% indicated resource and 67% inferred resource);

- Targeting first production in 2020 with average annual production of 456,000t of ilmenite and 118,000t of non-magnetic concentrate;

- US$4.23 billion LOM revenue forecast based on Management Case Two (base case revenue of US$3.53 billion forecast);

- Pre-production capital expenditure of US$152 million plus US$74 million of contingency, EPCM (Engineering, Procurement, Construction Management) and spares, with identified opportunities that may reduce capital expenditure (based on conceptual estimate +/-35%);

- Modelled production of 15Mtpa will be mined at LOM strip ratio (waste/ore) of essentially zero (2:451);

- Considerable upside potential remains through refining costings and further resource drilling; and

- Delivery of Scoping Study increases Savannah's interest in the Mutamba Consortium to 20%.

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