MZI Resources (ASX:MZI) says it’s now expecting to start commissioning the Keysbrook mineral sands project by the end of this month with a first shipment occurring before the end of 2015. As of at the end of September, the processing facilities at Keysbrook were 92.5% complete and continuous mining operations should commence from next week on.
The ramp-up of the Keysbrook project could be very interesting as this project could generate A$30M per year in free cash flow, making the company relatively undervalued. Granted, MZI will need approximately 3.5-4 years of full production to repay the debt associated with constructing Keysbrook. If the commissioning phase goes smooth and the aimed production rate is being met, there’s no reason why MZI Resources shouldn’t triple in the next 12-18 months.
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Disclosure: The author holds no position in MZI Resources but could initiate a speculative position at any given time. Please see our disclaimer for current positions.
