Image Resources (ASX:IMA) had already started out as a miner with higher grades than your typical zircon mine, and now it thinks it may have “underestimated” those grades substantially.

Zircon is a found in mineral sands — old beach sands that also contain ilmenite and other minerals.

Its primary use is in the ceramics industry to make things like tiles and plates opaque.

But it also has a high melting point and is corrosion resistant, making it useful in the manufacturing process for foundry moulds, refractory bricks and molten metal moulds.

And it’s increasingly being used in new-age electronics, as well as engines and spacecraft.

China is the largest user of zircon, consuming almost half of global supply for its massive construction industry.



Image, which only recently started mining, revealed today that it had uncovered a section of “ultra-high-grade” ore at its Boonanarring mine in Western Australia that “could prove to be more valuable per tonne” than the high-quality heavy mineral concentrate it already produces.

Managing director Patrick Mutz told Stockhead that a typical mineral sands deposit contains about 10 per cent heavy minerals and about 3-4 per cent zircon.

The heavy mineral concentrate Image produces now typically contains 90-92 per cent heavy minerals and 30 per cent zircon.

A single grab sample taken from the top of the in-situ ore prior to mining returned results of 95 per cent heavy minerals and 70 per cent zircon.

But even before this new very high-grade find, Image already had a grade of 21 per cent heavy minerals and 7-8 per cent zircon.

“So it’s already a very high-grade mine and now what we’re finding is we may have underestimated both the heavy mineral grade and the zircon grade in it,” Mutz said.

“It’s unbelievable. That kind of material just doesn’t normally exist in the natural state,” he said.

“That’s higher than our current concentrate that we make, it’s just absolutely amazing, but we don’t know the extent of it.”


So what does it mean?

The great thing about higher grades is it means more material that can potentially be sold. And in this case, the higher-grade ore could also be sold as “direct shipping ore”.

DSO refers to minerals that require only simple crushing before they are exported, which keeps costs low.

Image has so far stockpiled 500 tonnes of the high-grade ore.

The company has decided to attack its new find with another drilling program, which could potentially boost the Boonanarring reserve.

A reserve is a discovery that is commercially mineable and determines just how long a life a mine will have.

Mutz said that prior to this latest “ultra-high-grade” find, in the first three months of this year, Image had been finding heavy mineral grades that were 75 per cent higher than expected.

“So, does that mean that the ore reserve is going to go up that much? Well we cannot say, we do not know, but it is certainly seeming it’s going to go up,” he said.

“It’s anybody’s guess right now as to how much.

“The next step is to determine the extent of this type of ultra-high-grade ore along strike, and its connection to the potential high-grade core currently being delineated.”

That is probably about 2-2.5 months away, Mutz noted.


The other players on the field

There are around 20 ASX-listed mineral sands companies.

Iluka Resources (ASX:ILU) is the largest in the field with a $3.7b market cap and has been in production for some time.

At the junior end of the market there is Broken Hill Prospecting (ASX:BPL), which has heavy mineral sands projects in the Murray Basin of south-east Australia.

Strandline Resources (ASX:STA) is advancing a mineral sands project in Tanzania called “Fungoni”, as well as its Coburn mineral sands project in Western Australia.

Earlier this year it locked in a US$26m loan with major African investment bank Nedbank CIB to fund development of the Fungoni project.

Diatreme Resources (ASX:DRX) is developing its flagship Cyclone zircon project in Western Australia.

The company says that in the future, premium quality zircon and titanium from its Cyclone project will be used to help jet turbines fly planes further and burn less fuel.

Base Resources (ASX:BSE) recently upgraded the resource for its Kwale North Dune deposit in Kenya to 171 million tonnes at an average heavy mineral grade of 1.5 per cent.

That equates to a contained resource of 2.6 million tonnes comprising 45 per cent ilmenite, 12 per cent rutile and 5 per cent zircon for that particular deposit.