Discovered in 2007, the project is located along the Barton shoreline within the Wanna Lakes area of the northern Eucla Basin, 25 kilometres from Western Australia’s state border with South Australia and 220km north of the transcontinental railway.
The Cyclone deposit occurs within adjoining tenements M69/141 (Cyclone), held by wholly owned subsidiary, Lost Sands Pty Ltd and R69/1, (Cyclone Extended), held by Diatreme Resources.
Following the acquisition of the Cyclone Extended Heavy Mineral Resource, Cyclone’s JORC Mineral Resource (Measured and Indicated) has been estimated at comprising 211 million tonnes at 2.3% heavy minerals (HM) (1% cut-off grade), containing 4.8 million tonnes HM (refer ASX announcement 9 April 2015). This includes a Measured Resource of 156Mt at 2.4% HM and an Indicated Resource of 55Mt at 1.8% HM (both at 1% HM cut-off grade).
In January 2017, Diatreme updated the Cyclone Mineral Resource estimate to 203Mt at 2.3% HM (1% HM cut-off grade) containing 4.70Mt of HM (refer ASX announcement 27 April 2017).
In November 2014, Western Australia’s Department of Mines and Petroleum granted a Mining Lease for the project (ML69/141), which followed the signing of a Project Agreement with the traditional owners, the Pila Nguru Spinifex People. In January 2017, the project received final ministerial consent, allowing for the development of a mineral sands mine and associated infrastructure.
In January 2018, Diatreme signed Cooperation and Consulting Services agreements with leading mining services company China ENFI Engineering Corporation (ENFI), for the completion of Cyclone’s definitive feasibility study (DFS). ENFI, which is backed by one of the world’s largest mining groups, China Minmetals, also agreed to use its network within China’s state-owned enterprise and banking sectors to assist in sourcing potential project investors, offtakers and project debt funding.
In November 2018, Diatreme released a positive definitive feasibility study (DFS) for the Cyclone project which highlighted the potential for the asset to be a profitable new WA zircon mine.
The results included an estimated net present value (NPV) of A$113m, an internal rate of return of 27% (after tax) and capital payback within the first 2.7 years of an estimated mine life of 13.2 years. The capital cost was slashed to A$135m, considerably lower than the previous estimate of A$161m. The results were based on life of mine production of 1.94Mt of heavy mineral concentrate (HMC), containing 936kt zircon and producing 772kt of zircon final product.
In August 2019, Diatreme signed a Memorandum of Understanding with China's Hunan Rare Earth Industry Group (HRE) for potential life of mine offtake of HMC product and potential investment into the project. An Expression of Interest was also received from MCC International Corporation Ltd (MCC), part of the leading China Minmetals Group, for the provision of engineering, procurement and construction services, in addition to sourcing suitable project finance to facilitate investment.
Cyclone's potential to deliver value has also been boosted by the identification of a potential additional product, the strategic rare metal hafnium (HFO2), within the zircon component of the HMC. Global demand for hafnium is on the rise amid supply constraints following Japan's post-Fukushima nuclear plant shutdowns, with Diatreme working with HRE and other potential development partners to further explore this opportunity.
Diatreme has continued to engage with a range of parties to unlock shareholder value from the Cyclone Zircon Project. Talks are advancing and the Company anticipates a number of opportunities for Cyclone’s development, with both domestic and international interest in this high-grade zircon project.
The Company will keep the market fully informed when talks potentially transition to a more formally documented process. In addition, the Company is now also reviewing the potential for use of a separated company vehicle for the purposes of a potential asset “spin out” to a newly listed company shell should market conditions facilitate support for this.
The Cyclone deposit occurs within adjoining tenements M69/141 (Cyclone), held by wholly owned subsidiary, Lost Sands Pty Ltd and R69/1, (Cyclone Extended), held by Diatreme Resources.
Following the acquisition of the Cyclone Extended Heavy Mineral Resource, Cyclone’s JORC Mineral Resource (Measured and Indicated) has been estimated at comprising 211 million tonnes at 2.3% heavy minerals (HM) (1% cut-off grade), containing 4.8 million tonnes HM (refer ASX announcement 9 April 2015). This includes a Measured Resource of 156Mt at 2.4% HM and an Indicated Resource of 55Mt at 1.8% HM (both at 1% HM cut-off grade).
In January 2017, Diatreme updated the Cyclone Mineral Resource estimate to 203Mt at 2.3% HM (1% HM cut-off grade) containing 4.70Mt of HM (refer ASX announcement 27 April 2017).
In November 2014, Western Australia’s Department of Mines and Petroleum granted a Mining Lease for the project (ML69/141), which followed the signing of a Project Agreement with the traditional owners, the Pila Nguru Spinifex People. In January 2017, the project received final ministerial consent, allowing for the development of a mineral sands mine and associated infrastructure.
In January 2018, Diatreme signed Cooperation and Consulting Services agreements with leading mining services company China ENFI Engineering Corporation (ENFI), for the completion of Cyclone’s definitive feasibility study (DFS). ENFI, which is backed by one of the world’s largest mining groups, China Minmetals, also agreed to use its network within China’s state-owned enterprise and banking sectors to assist in sourcing potential project investors, offtakers and project debt funding.
In November 2018, Diatreme released a positive definitive feasibility study (DFS) for the Cyclone project which highlighted the potential for the asset to be a profitable new WA zircon mine.
The results included an estimated net present value (NPV) of A$113m, an internal rate of return of 27% (after tax) and capital payback within the first 2.7 years of an estimated mine life of 13.2 years. The capital cost was slashed to A$135m, considerably lower than the previous estimate of A$161m. The results were based on life of mine production of 1.94Mt of heavy mineral concentrate (HMC), containing 936kt zircon and producing 772kt of zircon final product.
In August 2019, Diatreme signed a Memorandum of Understanding with China's Hunan Rare Earth Industry Group (HRE) for potential life of mine offtake of HMC product and potential investment into the project. An Expression of Interest was also received from MCC International Corporation Ltd (MCC), part of the leading China Minmetals Group, for the provision of engineering, procurement and construction services, in addition to sourcing suitable project finance to facilitate investment.
Cyclone's potential to deliver value has also been boosted by the identification of a potential additional product, the strategic rare metal hafnium (HFO2), within the zircon component of the HMC. Global demand for hafnium is on the rise amid supply constraints following Japan's post-Fukushima nuclear plant shutdowns, with Diatreme working with HRE and other potential development partners to further explore this opportunity.
Diatreme has continued to engage with a range of parties to unlock shareholder value from the Cyclone Zircon Project. Talks are advancing and the Company anticipates a number of opportunities for Cyclone’s development, with both domestic and international interest in this high-grade zircon project.
The Company will keep the market fully informed when talks potentially transition to a more formally documented process. In addition, the Company is now also reviewing the potential for use of a separated company vehicle for the purposes of a potential asset “spin out” to a newly listed company shell should market conditions facilitate support for this.
introduction
dEfinitive feasIbility study results
As the Cyclone mineralisation occurs within a preserved Tertiary (ca 35 Ma) beach shoreline environment overlain by a thin unit of red Quaternary aeolian dune sands, all exploration has been completed using NQ Air Core drilling. The Cyclone Deposit was discovered by DRX in 2007, with a widely spaced resource delineation program subsequently completed. A small program of check drilling was carried out in 2008 which highlighted that lower grade mineralisation in the weathered profile was not recognised during the 2007 drilling program. A follow-up drilling and sampling program was completed in 2009 to provide complete coverage across the mineralisation. Infill drilling was carried out in December 2010, focussing on the proposed start-up area.
Additional infill drilling was carried out in 2011 in conjunction with drilling for bulk sample collection. Several small programs were completed in the second half of 2011 for infill and edge definition purposes, including southern extensions of the nearshore resource. A final program of infill drilling was completed in 2012 for edge definition of strand mineralisation and further bulk sample collection.
A total of 1,379 holes for 55,834m of drilling have been completed over the Cyclone Deposit within DRX tenure.
The majority of Cyclone has been drilled at 50m hole spacing and drill lines are generally 150m apart with some lines spaced at 300-500m.
All drill holes are vertical and all samples collected at 1.5m intervals. The majority of samples were collected through rotary splitter with some whole samples collected and used in bulk sample test work. The grade of heavy minerals for each sample was initially estimated by panning and visual estimation.
All samples were submitted to Regional Exploration Management Pty Ltd preparation laboratory for sample preparation, drying, wet sieving at 2mm and 53 micron and later to Diamantina Laboratories for heavy mineral separation by TBE (2.92 2.96 sg). Mineralogical assemblage determined by QEMSCAN® (with routine XRF confirmation) overselected sample composite intervals and incorporated in to the geological database.
Additional infill drilling was carried out in 2011 in conjunction with drilling for bulk sample collection. Several small programs were completed in the second half of 2011 for infill and edge definition purposes, including southern extensions of the nearshore resource. A final program of infill drilling was completed in 2012 for edge definition of strand mineralisation and further bulk sample collection.
A total of 1,379 holes for 55,834m of drilling have been completed over the Cyclone Deposit within DRX tenure.
The majority of Cyclone has been drilled at 50m hole spacing and drill lines are generally 150m apart with some lines spaced at 300-500m.
All drill holes are vertical and all samples collected at 1.5m intervals. The majority of samples were collected through rotary splitter with some whole samples collected and used in bulk sample test work. The grade of heavy minerals for each sample was initially estimated by panning and visual estimation.
All samples were submitted to Regional Exploration Management Pty Ltd preparation laboratory for sample preparation, drying, wet sieving at 2mm and 53 micron and later to Diamantina Laboratories for heavy mineral separation by TBE (2.92 2.96 sg). Mineralogical assemblage determined by QEMSCAN® (with routine XRF confirmation) overselected sample composite intervals and incorporated in to the geological database.
exploration overview
Cyclone’s Mineral Resource was reported in 2017 as comprising 203 million tonnes (Mt) at 2.3% heavy minerals (HM) (1.0% HM cut-off grade), containing 4.7Mt HM.
cyclone resource
Notes
- Rounding may generate differences in last decimal place
- A constant SG of 1.7 has been used to derive material tonnes
- Slime refers to material typically <53um
- OS refers to material typically >2mm
- Mineral Assemblage derived from QEMSCAN analysis
- Leucoxene (Leuc) – Ti-oxides containing 85 – 95% TiO2, HiTi - Ti-oxides containing 70 - 85% TiO2,Altered Ilmenite (Alt Ilm) - Ti-oxides containing <70% TiO2, Si-bearing Ti-Oxide (Si TiOx) – Ti-oxidescontaining >10% silica rich Ti minerals.
- “Strand”, “Beach” and “Nearshore” represent differing geological domains based upon varyingsediment grain size and sorting (i.e. depositional environment), mineralogy and HM grade.
The Cyclone Deposit is made up of a number of mineralised strand systems which are interpreted to represent Tertiary beach placer deposits with associated overlying dunal and underlying near shore deposits. Quaternary cover overlies the deposit, and a shallow weathering profile with calcrete and ferruginous induration has developed in the overburden material, with the mineralised sands being free flowing with very little induration (rock) and low slimes contents which are favourable to conventional mining techniques.
Mineralisation occurs within bimodal near-shore fine sands, higher grade beach strandlines, homogenous beach sands, and overlying aeolian dune sands. A schematic stratigraphic column for Cyclone is presented below.
The mineralisation displays a very high value mineral assemblage and is dominated by zircon (31% of the HM) and a range of weathered / altered titanium bearing minerals (42% of the HM), with HiTi (70 85% TiO2) being the most abundant. Siliceous Ti-oxides (>10% SiO2) make up around 22% of the HM, but levels of other "trash" (i.e. low value) HM are very low.
Mineralisation occurs within bimodal near-shore fine sands, higher grade beach strandlines, homogenous beach sands, and overlying aeolian dune sands. A schematic stratigraphic column for Cyclone is presented below.
The mineralisation displays a very high value mineral assemblage and is dominated by zircon (31% of the HM) and a range of weathered / altered titanium bearing minerals (42% of the HM), with HiTi (70 85% TiO2) being the most abundant. Siliceous Ti-oxides (>10% SiO2) make up around 22% of the HM, but levels of other "trash" (i.e. low value) HM are very low.
regional geology
The Probable Ore Reserve estimate for the Cyclone Project was upgraded in 2016, being reported as 138 million tonnes (Mt) at 2.6% heavy minerals (HM), including 0.72% zircon, containing 3.5 Mt of HM, including 1 Mt of zircon.
The Ore Reserve was based upon mine planning parameters developed for the Cyclone Prefeasibility Study (refer ASX announcement 20 Mar 2012), with appropriate recognition of subsequent metallurgical testwork and process flowsheet development undertaken by independent consultants Mineral Technologies.
The Ore Reserve was classified as Probable based on the accuracy of the cost estimate (PFS quality) and additional work required for the marketing of Cyclone HMC in China. However, 90% of the Ore Reserve was derived from the Measured Resource, and there is a high level of confidence in the other modifying factors applied.
The Probable Ore Reserve represents a 75% conversion rate for contained HM tonnes. The pit design includes 83 Mbcm of overburden with a strip ratio of 1:1. The strip ratio is considerably lower in the early years of the mine operation.
The Ore Reserve was based upon mine planning parameters developed for the Cyclone Prefeasibility Study (refer ASX announcement 20 Mar 2012), with appropriate recognition of subsequent metallurgical testwork and process flowsheet development undertaken by independent consultants Mineral Technologies.
The Ore Reserve was classified as Probable based on the accuracy of the cost estimate (PFS quality) and additional work required for the marketing of Cyclone HMC in China. However, 90% of the Ore Reserve was derived from the Measured Resource, and there is a high level of confidence in the other modifying factors applied.
The Probable Ore Reserve represents a 75% conversion rate for contained HM tonnes. The pit design includes 83 Mbcm of overburden with a strip ratio of 1:1. The strip ratio is considerably lower in the early years of the mine operation.
ore reserve
- Rounding may generate differences in last decimal place
- A constant SG of 1.7 has been used to derive material tonnes
- Slime refers to material typically <53um
- OS refers to oversize material typically >2mm
- Mineral Assemblage derived from QEMSCAN analysis
- Leucoxene (Leuc) – Ti-oxides containing 85 – 95% TiO2, HiTi - Ti-oxides containing 70 - 85% TiO2, Altered Ilmenite (Alt Ilm), - Ti-oxides containing <70% TiO2, Si-bearing Ti-Oxide (Si TiOx) – Ti-oxides containing >10% silica rich Ti minerals.
- Resources are inclusive of Reserves
