Strandline Resources : Macmahon appointed as Preferred Mining Contractor for Coburn

Strandline Resources (ASX: STA) is pleased to announce that it has taken another key step towards development of its Coburn mineral sands project in Western Australia by selecting Macmahon Holdings (ASX: MAH) as the preferred contractor to provide mining services for the Project.

The parties have signed an early contractor involvement agreement (ECI Agreement) for early works associated with contract mining services. Under the ECI Agreement, the parties will work exclusively over the coming months to further optimise the mining solution and conclude contract documentation

The scope of the mining services contract will include mining of ore at a rate of 23.4Mtpa, overburden removal, pit backfill and land recontouring, transfer of concentrate from the Wet Concentrator Plant (WCP) to the Mineral Separation Plant (MSP) and general mining-related earthworks. The contract mining term is expected to cover the first five years of Coburn's production.

Coburn is a world-class long-life mineral sands deposit hosting exceptional zircon and titanium mineral sands products. The mining method is conventional open pit dry mining in free-dig sand with in-pit tailings deposition, progressive backfill and rehabilitation.

Macmahon's experience in large bulk materials handling and mining, including dozer push operations, means it is well credentialled to meet Coburn's mining requirements. Macmahon's solution provides Strandline with a long-term safe, reliable and highly efficient mining solution for Coburn. The financial terms of the mining contract will utilise an alliancing-style commercial framework based on the mine plan, methodologies and productivity estimate assumptions contained in the Coburn Definitive Feasibility Study (DFS), released Apr-2019.

The Coburn DFS shows the Project will generate strong financial returns with a pre-tax NPV of A$551m (USD:AUD 0.72, 8% discount rate), an IRR of 32%, Life of Mine EBITDA of A$1.9b over the initial 22.5 years (average annual EBITDA of A$86 million) and an attractive revenue-to-operating cost ratio of 2.2, based on TZMI's commodity price forecast. Strandline Managing Director Luke Graham said the agreement with a highly reputable mining contractor in Macmahon forms a key part of Strandline's strategy to prepare for near-term development.

'We are pleased to establish this relationship with Macmahon and look forward to further optimising the mining solution and contract documentation in readiness for development,' Mr Graham said.

'Coburn has a world-scale inventory, it is in a Tier-1 location, we have binding offtake agreements in place with top-shelf customers, reputable contractors on board developing solutions and project funding discussions progressing strongly.'

ABOUT MACMAHON

Macmahon's surface mining business has more than 50 years' experience in bulk and selective mining operations. Headquartered in Perth, with offices in Brisbane, Adelaide and Jakarta, Macmahon provides services throughout Australia and to large mines in Indonesia and South Africa across a range of commodities. With a commitment to providing end to end services, Macmahon has built a reputation for successful project delivery and along the way has achieved award winning results in safety, indigenous engagement, employment and training. The company won the 2019 WA Mentally Healthy Award for its Strong Minds, Strong Mines program, and has been recognised for its commitment to indigenous training and employment.

ABOUT STRANDLINE

Strandline Resources Limited (ASX: STA) is an emerging heavy mineral sands (HMS) developer with a growing portfolio of 100%-owned development assets located in Western Australia and within the world's major zircon and titanium producing corridor in South East Africa. Strandline's strategy is to develop and operate high margin, expandable mining assets with market differentiation and global relevance. Strandline's project portfolio contains high quality assets which offer a range of development options and timelines, geographic diversity and scalability. They include two zircon-titanium rich, 'development ready' projects, being the Fungoni Project in Tanzania and the large Coburn Project in Western Australia, as well as a series of titanium dominated exploration targets spread along the highly prospective Tanzanian coastline, including the advanced and large scale Tajiri Project in northern Tanzania.

Contact:

Luke Graham

Tel: [phone]

Email: [e-mail]

FORWARD LOOKING STATEMENTS

This report contains certain forward looking statements. Forward looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside of the control of Strandline. These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay, approvals and cost estimates. Actual values, results or events may be materially different to those contained in this announcement. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements. Any forward looking statements in this announcement reflect the views of Strandline only at the date of this announcement. Subject to any continuing obligations under applicable laws and ASX Listing Rules, Strandline does not undertake any obligation to update or revise any information or any of the forward looking statements in this announcement to reflect changes in events, conditions or circumstances on which any forward looking statements is based.

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