Cove Resources (ASX: CVE) has delivered an independent Scoping Study over the Koivu Titanium Project in Finland which could position Cove as a significant, long-term supplier of quality Titanium concentrate into European markets.
The project, which Cove recently acquired for €9 million (A$11.2 million) has confirmed the ability to produce titanium concentrate at 250,000 tpa and magnetite at 48,000 tpa plus apatite.
The company has now been removed from a trading halt.
The study indicates a NPV of US$131 million and an IRR of 32% (pre-tax, 10% real discount rate, 100% equity, direct and indirect capital costs plus 35% capital expenditure contingency), with a estimated direct capital expenditure of US$57.6 million.
Another outcome is the annual operating margin of A$28.63 million, with operating costs of $110.50 per tonne of Ilmenite Concentrate after magnetite by-product credits.
Importantly - the results confirm the technical and financial viability for the proposed development of the project, and demonstrate existing resources can support a 1.6M tpa operation over a 20 year operational life.
Results also show the ability to produce titanium concentrate at 250,000 tpa and magnetite at 48,000 tpa plus apatite.
Cove has the potential to start production in 2015, and become an international supplier of high quality titanium pigment feedstock to European plants - with significant freight advantages into the European market.
Koivu hosts five titanium deposits with a combined JORC Indicated and Inferred Resources of 68.7 million tonnes at 7.5% titanium dioxide (TiO2), which equates to over 5 million tonnes of contained TiO2.
Worth noting is also the potential to expand the titanium resource through drilling as the current JORC compliant ore bodies remain open at depth. The Pera Lyly and Riutta deposits also provide options to increase the resources by proceeding to JORC estimates.
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