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- Mineral sands miner Image Resources (IMA) has suffered some secondary effects of the COVID-19 pandemic, but remains well placed to deliver on its 2020 sales guidance
- Image delivered 25,000 wet tonnes of heavy mineral concentrate (HMC) in April as planned, but downstream softening of demand through May saw that figure drop to 10,000 tonnes
- The company remains buoyant, however, about its prospects through June and July as preliminary discussions for proposed sales with off-take partner Natfort, as well as other new clients, give some hope of a rapid rebound
- Expansion exploration efforts at Boonanarring have also continued largely unabated, with new western extensions now being evaluated
- The company will be hoping sales do return to levels to match its strong production levels so it can continue to stay afloat through the demand downturn
- Image Resources closed 9 per cent lower on Wednesday, with shares priced at 15 cents each
Mineral sands miner Image Resources (IMA) has suffered some secondary effects of the COVID-19 pandemic, but remains well placed to deliver on its sales guidance.
HMC sales
Image delivered 25,000 wet tonnes of heavy mineral concentrate (HMC) in April as planned, but downstream softening of demand through May saw that figure drop to 10,000 tonnes.
The company remains buoyant, however, about its prospects through June and July as preliminary discussions for proposed sales with off-take partner Natfort, as well as other new clients, give some hope of a rapid rebound.
2020 sales guidance remains unchanged at this point, with the company believing it will still hit its target of 300,000 to 330,000 tonnes, though sales volumes are expected to be weighted towards the second half of the year.
Despite the optimism, the company does stress it will remain agile amid the global uncertainties, and there may yet be revisions to the guidance as the situation unfolds.
Operations and exploration
IMA’s operations have been only minimally impacted by COVID-19 restrictions, and the company has continued work at its Boonanarring project mostly unhindered.
In fact, the current quarter is tracking strongly against the record production posted in the March quarter.
Managing Director and CEO Patrick Mutz says the company is lucky to have been able to navigate the crisis largely unaffected.
“Image is fortunate to have been spared any significant negative effects on production and exploration activities from the Coronavirus, thanks to the swift actions taken by the Commonwealth and State governments and regulators, and the positive actions of Image employees and contractors abiding by the various restrictions and protocols at work and in their personal daily routines,” he stated.
“Local travel restrictions are already being relaxed, our corporate office staff have returned to working from the office and we are looking forward to working in a new normal,” Patrick continued.
Expansion exploration efforts at Boonanarring have also continued largely unabated, with the company now aiming to add two years of new ore reserves before the end of December 2020, while also setting a target to add new mineral resources by September.
Apart from previously announced extensions to the north and south at Boonanarring, new areas of mineralisation to the west are now also being further
evaluated, and are hoped to form part of the potential upgrades.
The bottom line
The company completed the third of seven debt repayments, with the US$7.7 million principal and interest payment leaving US$26.3 million left in outstanding principal balance.
The quarterly repayments are due to be finalised in May 2021. IMA had sought alternative arrangements to service the debt but was unable to secure a deal with its lenders, so the process has been shelved.
The company will be hoping sales do return to levels to match its strong production levels through the pandemic crisis so it can continue to service its obligations and stay afloat through the demand downturn.
Image Resources closed 9 per cent lower on Wednesday, with shares priced at 15 cents each.
