Iluka Resources Releases Q3 FY2019 Review to the Market

Iluka Resources Limited (ASX: ILU), a company from the metals and mining sector, engaged in the production of mineral sands, announced its quarterly results for the period ended 31st March 2019.

During the period, the production of Zircon /Rutile /Synthetic Rutile was 154,000 tonnes, 17% lower than its previous quarter. This was majorly impacted by the planned SR2 kiln major maintenance outage. As a result, the kiln was offline for 45 days in the March quarter. However, the maintenance of the kiln was underway during the period and is completed now. The kiln is fully operational at present.

The Lanti’s dredge operations were successfully ceased by the end of February 2019 as planned. Irrespective, the production of Rutile was up quarter-on-quarter. Overall, the production was in line with the expectations and full year guidance metrics.

As per the expectation of the company, in the March quarter, the revenue and sales of Zircon /Rutile /Synthetic Rutile were lower than the December quarter. The sales of zircon in the first quarter was lower and remained consistent with the seasonal pattern. The production of zircon as compared to its previous quarter reported a fall of 6.5%. The production of Rutile was up by 9.9% in the March 2019 quarter; however, it was down by 9% as compared to its previous corresponding period. There was a significant fall in the production of Synthetic Rutile by 52.8%

The total mineral sand sales declined by 19% in the March 2019 quarter. The sales revenue of Zircon /Rutile /Synthetic Rutile declined by 22.5% to A$249.2 million as compared to its December 2018 quarter.

Cataby, Western Australia:

Cataby is a large chloride ilmenite-rich deposit, which lies 150 km north of Perth. The company received an approval for the mine development in December 2017, and the first production was scheduled in the first half of CY2019. The construction activities at the site are completed, and the commissioning of the Cataby mine is under process. The mine successfully made its first delivery heavy mineral concentrate to Capel in April 2019.

Ambrosia Mine Move, South Australia

In October 2018, the Board of Iluka approved funding of approximately $55 million to bring forward the mine move to the Ambrosia deposit to the fourth quarter of 2019. This was assessed as the best option to smoothen production from Jacinth-Ambrosia and partially balance the impact of declining grade over the operation’s remaining mine life.

The company expects that around $35 million worth of capital expenditure will be required for roads, earthworks, high voltage power, mining pipework and pumping infrastructure, as well as site infrastructure and buildings. In Q1 CY2019, the construction of the site infrastructure has begun, followed by the installation of power lines, field pipework and civil foundations.

All the supply, as well as the construction contract, are awarded, and the project is progressing ahead of scheduled completion in Q4 2019.

Lanti Dry and Gangama Mine Expansions, Sierra Leone:

The expansion projects are under progress and in line with the schedule. At present, 92% of the construction of the second Gangama concentrator is completed, and commissioning activities are expected to commence in May 2019.

Sembehun Mine, Sierra Leone:

The definitive feasibility study (DFS) is in stage 1 and continuing. The value optimisation studies are underway to find out the options around the timing, capacity, as well as sequence of mining and concentrating options across the Sembehun deposits.

Balranald, Murray Basin, New South Wales

A detailed program to understand the deposit mineralisation has been completed. The proposed trial has been designed to identify the economic feasibility for continuous mining and processing environment.

The stock of ILU is trading at A$9.135 (2:45 pm AEST, 15 April 2019), up by 0.5% as compared to its previous closing price. ILU holds a market capitalisation of A$3.84 billion and approximately 422.5 million outstanding shares.

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