Empire Metals shares jump as Pitfield titanium resource hits 8.2B tonnes

Empire Metals (LSE: EEE) shares jumped 12% Wednesday after the junior unveiled an upgraded resource for its Pitfield project in Western Australia, which it says confirms the deposit as the world’s largest titanium resource.

The updated mineral resource estimate puts Pitfield at 8.16 billion tonnes grading 4.3% titanium dioxide, containing 349 million tonnes across the Thomas and Cosgrove deposits. The update also establishes Pitfield’s first measured resource, increasing confidence in the deposit as Empire advances mine planning and economic studies.

“The upgraded MRE, which underlines the sheer scale of this discovery, comes just weeks after we demonstrated an integrated flowsheet based on conventional processing steps to produce 99% pure titanium dioxide,” managing director Shaun Bunn said. “The high-grade weathered zone sits at surface and lends itself to simple, efficient mining methods.”

The upgrade gives Empire greater confidence in the scale and geological continuity of a deposit it aims to develop into a source of high-purity titanium dioxide for pigment and metal feedstock markets. The metal is also used in aerospace, defence and industrial applications.

The company’s next challenge is demonstrating that the enormous resource can underpin an economically viable operation using the processing route it has developed.

Resource confidence

Pitfield now contains 374 million measured tonnes grading 5.8% titanium dioxide for 21.6 million contained tonnes. Another 3.65 billion tonnes grading 4.3%, containing 154 million tonnes, sits in the indicated category, while 4.2 billion inferred tonnes grading 4.1% contain 173 million tonnes.

At Thomas, 43% of the resource is now measured and indicated, with the remainder inferred. Cosgrove has 51% in the indicated category and the balance inferred.

Empire said it envisions a conventional processing operation producing high-purity titanium dioxide in pigment and metal feedstock forms for global markets. The project has existing rail connections to ports serving markets in Asia, the United States, Europe and Saudi Arabia.

“We now have both halves of the equation: a titanium resource of exceptional scale and an integrated processing route designed to produce high-value products,” Bunn said.

Investors welcomed the update. Empire shares close at 51.20 pence in London trading Wednesday, giving the company a market capitalization of almost £388 million ($729 million).

Development test

The first measured resource represents an important step towards more detailed mine planning and economic work, but Pitfield remains a development-stage project. Empire must still translate its resource size, grades and processing results into an economic development plan.

The company’s recently demonstrated flowsheet produced titanium dioxide at 99% purity using conventional processing steps, according to Empire. The near-surface, higher-grade weathered material could also support relatively straightforward mining methods if subsequent studies confirm its technical and economic viability.

The combination gives Empire a substantially better-defined resource base as it moves towards the studies needed to determine how Pitfield might be developed at commercial scale.