Iluka completes SRL merger

PERTH (miningweekly.com) – ASX-listed Iluka Resources has completed the acquisition of Sierra Rutile for A$375-million.

The completion of the merger followed on from German regulatory approval in November and Iluka negating fears over the geotechnical risks at the Sierra Rutile tailings dams, in Sierra Leone.

Iluka has now assumed Sierra Rutile’s net debt of about A$80-million, and is in the process of making arrangements to have this repaid from its own facilities.

“The Sierra Rutile merger extends Iluka’s resource base and provides access to a major global source of rutile,” Iluka MD and CEO Tom O’Leary said on Thursday.

“Iluka believes that the combination of the experience and capabilities of Sierra Rutile personnel with Iluka’s mineral sands operational and technical experience, gained across multiple orebodies and processing facilities over many years, will enhance the operational performance of Sierra Rutile.”

Sierra Rutile is a large, long-life rutile mining and processing operation with material expansion options.

O’Leary said that Iluka would continue with the evaluation of the development options for the project through definitive feasibility studies on each option. Subject to this evaluation and market conditions, Iluka planned to commit progressively to exploration opportunities that could see a significant increase in rutile production and a material improvement in unit costs of production.

Iluka will be spending some $60-million over the next two years on operational and safety performance improvement measures at Sierra Rutile, subject to developing detailed plans and obtaining any necessary regulatory approvals, as well as the company’s normal capital expenditure approval.

The initial focus will be on upgrading safety systems.