BlueJay Mining PLC (LON:JAY) has upgraded the resource for its Dundas Ilmenite project in Greenland.
The AIM-listed firm said in December that the updated JORC compliant mineral resource for the project was now 101mln tonnes at 7.1% ilmenite (in-situ), with higher grade portions at various cut off grades of 31.2mln tonnes at 10.7% ilmenite using a 3.5% cut off and 16mln tonnes at 12.9% ilmenite using a 4.5% cut off.
Ilmenite is the primary ore of titanium, a metal needed to make a number of high-performance alloys, while most of the ilmenite mined worldwide is used to manufacture titanium dioxide which is used in pigmentation, whiting, and polishing.
The new resource, which covered the Moriusaq area of the project, would replace a previous 2018 resource model and is expected to add positively to project economics ahead of the completion of an optimised pre-feasibility study (PFS).
The company also said the results “clearly” indicated “the strong possibility of a large and long-life operation with obvious expansion potential”.
Roderick McIllree, chief executive of BlueJay, said the company expected that resource updates for two other areas of the project, Iterlak and Iterlak East, would “add significant additional tonnage” to the project's estimates.
The Interlak area estimates are expected to be updated in the first quarter of 2019, with an application for an exploitation license to be lodged in the same year.
The firm is already in offtake discussions for the whole ilmenite production at Dundas after a previous resource update in April 2018 increased the project’s estimate by 400% to 96mln tonnes at 6.9% ilmenite.
PFS expected in Q1 2019
The upgraded resource estimate comes as the firm prepares for the publication of the PFS for Dundas in the first quarter of 2019.
That is later than it originally anticipated but the PFS will include a number of engineering optimisations currently being worked on. Parts of the study will be released as they are completed but the full report will be in 2019, said the junior.
“Highest concentration of in-situ ilmenite” globally, says CEO
McIllree also says that Dundas has a distinction of having “the highest concentration of in-situ ilmenite of any mineral sands project globally” thanks in part to its geological characteristics.
“This would have been a hard rock mine…But the slow grind of the glaciers has effectively mechanically mined the material for us. Tide and wind and rain have then deposited what is a finished product on the beach over time. Its saved us the front end capex of setting up a mine there which helps a lot.”
READ: Bluejay Mining updates on environmental and social impact assessments as pre-feasibility study continues at Dundas
That glacial grind has had significant consequences for the economics of production at Dundas, with McIllree saying the firm has “dodged anywhere between US$200-400mln in capex, mother nature has done our mining and concentrating for us”.
If Bluejay has the onward advance of glaciers to thank for the quality of the product at Dundas, it also has their retreat to thank for revealing the extent of the opportunity.
“Historically the project was only recognised as a small local occurrence,” says McIllree.
“But then the ice and snow melted, revealing a much larger occurrence. In 2015 we undertook a work programme that demonstrated the project could be globally significant. There are quite remarkable concentrations of the material across thirty kilometres.”
For those worried about the costs of operating in remote Greenland, McIllree offers reassurance aplenty. For one thing, there’s that initial capex dodge. But more tangibly, the project is situated near Greenland’s closest equivalent to an infrastructure hub, not far from two ports, two airports and the town of Qaanaaq, home to around 650 locals, all keen for an additional industry to start.
Even the mine camp has come pre-packaged: Bluejay has simply moved into a town that was abandoned following a change in local wildlife migratory patterns, providing a platform for accelerated implementation.
BlueJay can also count several heavyweight institutional investors among its shareholders, including HSBC, ING Bank, and FTSE 100 insurance group Prudential.
The three institutions hold stakes of around 8%, 4.9%, and 12.1% respectively.
With shares trading at about 13.9p as of 2 January 2019, BlueJay carries a market cap of around £116.4mln.