Iluka Resources Limited

ILU Details
 
Quarterly production update: Total zircon/rutile/synthetic rutile (Z/R/SR) production in the second quarter was 221 thousand tons inclusive of Sierra Rutile, with 177 thousand tonnes from Iluka’s Australian and US operations. The Tutunup South mine in south-west Western Australia continued to be Iluka’s only Australian mine in operation. During the quarter, 160 thousand tons of heavy mineral concentrate (HMC) was produced and 348 thousand tons processed globally. This reflected the continued draw down of HMC from the Jacinth- Ambrosia mine (currently idle) and the Woornack, Rownack, and Pirro mine (mining completed 2015). The company has announced in June the planned restart of mining at Jacinth-Ambrosia from December 2017, following the substantial draw down of HMC inventory.
 

Revenue and Cash cost data; (Source: Company reports)
 
The company’s two mineral separation plants (MSP) at Narngulu (Western Australia) and Hamilton (Murray Basin) continued to operate as planned with the Hamilton plant scheduled to complete processing activities in October 2017, as previously announced. In addition, Iluka plans to undertake maintenance works at Narngulu in the second half for a period of two months. This will support further draw down of finished product inventories and reduce the length of future major maintenance outages. As a result, zircon and rutile production from Iluka’s Australian operations is expected to be first half weighted while quarterly variations in production levels reflect campaign timing of the plants across the quarters. First half zircon/rutile/synthetic rutile (Z/R/SR) production volumes were 36% (119 thousand tons) higher than the same period in 2016 at 453 thousand tons.Sierra Rutile contributed 82 thousand tons of Z/R production in the first half of 2017 Given the current mining progress, we give a “Hold” recommendation at the current market price of $9.14
 

ILU Daily chart; (Source: Thomson Reuters) 

Altura Mining Ltd

 
AJM Details
 
Completion of two binding offtake agreements: Altura Mining Ltd (ASX: AJM) has executed a Binding Offtake Agreement (BOA) with leading Chinese battery producer Shaanxi J&R Optimum Energy Co., Ltd (J&R Optimum Energy) and has revised the terms of the existing BOA with prominent Chinese based lithium and battery materials processor Lionergy Limited (Lionergy) to align both BOA’s.  Key terms of BOA with J&R Optimum Energy include supply of minimum of 100,000 dry metric tons (dmt) per annum of 6% grade spodumene concentrate (pro-rated), and first product sales to commence before 30 June 2018 with 5 years minimum contract period. Price is at minimum of US$550 dmt (FOB) for first three (3) years of BOA (based on Li20 content per dmt on 6% Li20), and maximum price of US$950 dmt (FOB) for first three (3) years of BOA. Key terms of BOA with Lionergy include same as J&R Optimum Energy with minimum supply of 100,000 dry metric tons (dmt) per annum of 6% grade spodumene concentrate (pro-rated), while first product sales to commence before 30 June 2018. Term of BOA for 5 years’ minimum contract period is based on financing for the development of the project on or before 31 August 2017 (or such later date as may be notified by Altura to J&R Optimum Energy).
 
The completion of the BOA’s marks a significant milestone for Altura and its offtake partners and provides support for the advanced development of Altura’s flagship Pilgangoora Lithium Project. The completion of the BOA’s will provide increased certainty and prospective financiers of the Project. Lionergy has significantly progressed the design and construction of a purpose-built lithium carbonate and hydroxide plant to accept the entire initial spodumene production from Pilgangoora. The new plant is expected to be operational by Q2 2018 to coincide with first shipments from Altura. We reiterate a “Buy” recommendation on the stock at the current price of $0.15
 

AJM Daily chart; (Source: Thomson Reuters)

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