LICENCES FOR HEAVY SANDS COMBINED

The London-based company Pathfinder Minerals has announced that the Mozambican Ministry of Mineral Resources has notified it that the Ministry intends to combine into one licence the two separate licences currently held by Pathfinder in the central province of Zambezia.Both licenses concern titanium bearing mineral sands. One is for exploration and research at Moebase, and this licence will now mirror exactly the terms of the 25 year Mining concession at Naburi that was granted in 2004.Taken together, the two licenses, which were once held by subsidiaries of BHB-Billiton, cover 32,780 hectares of land. Results of a scoping study, released in mid-May, showed that between them Moebase and Naburi could be expected to produce 1.245 million tonnes of ilmenite (iron titanium oxide), 24,000 tonnes of rutile (the most common form of titanium dioxide) and 65,000 tonns of zircon (zirconium silicate) a year. These are the same minerals currently being produced by the Irish company Kenmare Resources at its dredge mine in Moma district, in the neighbouring province of Nampula.The scoping study put estimated annual revenue from Moebase-Naburi at 246.5 million US dollars. This is based on prices of 125 dollars per tonne of ilmenite, 677 dollars per tonne of rutile, and 1,148 dollars a tonne of zircon.Pathfinder notes that the commodity prices used in the study are well below forecast market prices for the three minerals. Hence, by the time mining starts, potential revenue could be considerably larger.The capital cost of developing the mine is put at 533 million dollars. The study gave the mine an estimated life of 30 years and put the Internal Rate of Return at 18.8 per cent.The study, undertaken by engineering consultants URS/Scott Wilson, was based on historical geological information from BHP-Billiton.Pathfinder has announced that it intends to carry out “a confirmatory drilling and metallurgical test work programme to allow conversion of the historic mineral resource into a current estimate. This will enhance the Company's understanding of the mineral resource potential, the process flowsheet, final product qualities and confirm the prospect of economically producing saleable product streams”.According to the company’s Chief Executive Office, Nick Trew, the Ministry’s decision to unify the two licences “enables Pathfinder Minerals to move forward with certainty of tenure on this world class asset”.