ASX-listed mineral sands-focused mining company Image Resources has announced that construction progress remains on track to start the commissioning and first heavy mineral concentrate (HMC) production in the first quarter of 2025 at its 100%-owned Atlas mineral sands project located 170 km north of Perth, in the Dandaragan Shire.

Following the bush fire that passed through the Atlas project area during the final week of November 2024, construction crews returned to the site to resume all site development activities.

Despite the lost time for emergency evacuation of the site, construction progressed rapidly during December and served to renew confidence in achieving the original goal of early-stage commissioning and first HMC production before the end of March 2025, the company said.

Image Resources also initiated drawdown of funds from the $20-million HMC prepayment facility arranged with its long-standing HMC offtake partner Shantou Natfort Zirconium and Titanium (Natfort), that was announced on October 24, 2024.

Prepayment facility funds will be used to cover working capital requirements, including corporate costs and pre-revenue Atlas operating costs.

In late December, $5-million of drawdown funds were received. The balance is anticipated to be received in the first quarter of 2025 as construction winds down.

"Despite the loss of nearly a week of construction time due to site evacuation during the November bush fire, we remain optimistic of achieving our goal of first HMC production at Atlas before the end of the first quarter of 2025," said Image Resources MD and CEO Patrick Mutz.

Further, even though construction at Atlas was delayed by more than 12-months owing to permitting delays, the company maintained its commitment for capital costs for Atlas to be largely self-funded from cash reserves from Boonanarring.

However, to maintain a sufficient cash buffer going forward, Image had started the drawdown of working capital funds from the $20-million HMC prepayment facility arranged through its offtake partner Natfort.

"Accessing the working capital facility provides the funding necessary to achieve first revenue at Atlas, which is anticipated to be in early second quarter of 2025," Mutz highlighted.

RISK MINIMISATION

Allowing Natfort to share the provision of the funding under the facility will minimise the risk of a single funding provider, after the execution of the $20-million HMC prepayment facility arrangement in October.

As such, 50% of the $20-million funding obligation under the prepayment facility, as well as the associated 50% of HMC offtake from the Atlas project, was shifted to Billion Sunny Investment, which is an independent third-party financing entity incorporated in Cayman Islands.

The shared participation in the prepayment facility funding was approved on the basis that it was on the same terms and conditions as the Natfort prepayment facility, the company added.

Repayment of the prepayment facility principal amounts will be made by the delivery of about 25% of each bulk shipment of HMC at no cost, while 75% of each shipment will be sold at market prices.

The term of the prepayment facility is 12-months from drawdown.

HMC will be sold/delivered to the HMC buyers in alternating shipments for processing by separation by their nominated mineral separation plant operators in China.

The $10-million funding under the shared prepayment facility arrangement with Sunny Investment was received by Image on January 7, 2025. The outstanding balance of $5-million under the Natfort prepayment facility is anticipated to be received in first quarter of 2025.