Strandline predicts stronger returns, but slightly high start-up costs at Fungoni mineral sands project

Mineral sands developer Strandline is predicting stronger cashflows at its “Fungoni” project in Tanzania due to strengthening price forecasts.

Strandline (ASX:STA) today issued an updated feasibility study to include higher mineral sands price forecasts, published by data leader TZMI in August.

Revenue over the life of the mine increased from $237m to $260m, driven by the strengthening market outlook, Strandline told investors.

Construction and operating cost estimates were also revised upwards slightly, from about $42 million to $45 million.

Strandline said the cost increase was mainly due to “environmental and social re-baselining … to prepare for final compensation and resettlement activities following final investment decision (FID)”.

Azure Capital was appointed mid-September to lead the project financing process for the Fungoni project.

The shares were steady at 11c at 11.15am AEST.