According to Quinn, Ticor’s lack of sex appeal may also be due to investor ignorance about the unfashionable mineral sands sector. “If you look at our PE (price to earnings ratio), it is very low compared to almost any other stock,” Quinn said. “We’ve now had four consecutive good half year results and are about to have another one. So why is it that people aren’t paying attention? There are only a couple of listed companies around in the sector, so I don’t think people understand it (the sector).”

Ironically, Ticor’s cause has probably been helped a little by the onset of Iluka Resources. “Iluka is now up in the $1 billion-type range and have forced analysts to follow them. And because of that, they begin to learn about mineral sands, and are starting to take a bit of interest in us.”

"There are prospects available in the US, Canada, the Ukraine, India and Africa. We're just doing our homework at present. There is no pressure on us to make a decision, though I wouldn't rule out an acquisition in the near-term." - Ticor's managing director, Pat Quinn.

 

It may also be a smart time to grow in mineral sands, as many pundits are predicting better times ahead for titanium products.
“The US dollar price of pigments should strengthen considerably in the next 12 months,” said David Moore, a researcher for Perth-based consultancy group TZ Minerals International.

Moore said many pigment plants around the globe were either at or approaching their capacity. “There has to be some movement in prices to justify the installation of new capacity,” he said.

Quinn agrees with the bullish outlook. “The pigment price is still relatively low, but is showing signs of moving up. The good news is that demand is very strong, and there aren’t any new plants about to come on stream to increase supply. So the outlook is pretty healthy for pigment.”

Ticor is well positioned to respond to any major demand increases. The company recently bedded down an expansion of its Cooljarloo mine 180km north of Perth in WA, which is designed to boost production of heavy minerals concentrate from 500,000 tonnes per annum up to 800,000tpa in 2000.

The sands are further processed at a mineral separation plant and synthetic rutile plant at Chandala, also north of Perth. About half of the synthetic rutile produced goes to the pigment plant at Kwinana, with the remainder exported.

The “value-added” pigment product is the key revenue generator for Ticor. The Kwinana plant has gradually been expanded over the years to its current level of around 86,000tpa. Some analysts suggest Ticor is keen to expand the plant more dramatically, but is hindered by the preferences of its 50% partner, Kerr McGee of the US.

The Tiwest dredge and concentrator at the Cooljarloo operation ... Ticor recently completed an expansion at the mine, which would result in production of heavy minerals concentrate rising from 500,000 tonnes per annum to 800,000tpa in 2000.

 

“They are in the lap of the gods with Kerr-McGee, and they are following their own global strategy,” one analyst commented.

Quinn concedes that Ticor at one stage had a “naive” goal of converting 100% of the synthetic rutile into pigment, but denies Kerr McGee has held up any aspirations.

He points out the plant was originally rated at only 51,000tpa and the joint venture is now planning to lift that capacity to 95,000tpa by the end of next year at a “relatively modest capital cost”

“We’re looking to carry out the expansions in line with the pigment market. The last thing we want to do is oversupply the market and create a major price fall.”

Meanwhile, Ticor is quietly pursuing a new exploration joint venture on leases south of Cooljarloo with Iluka.

“By the end of this year we’ll decide whether there is something worthwhile,” Quinn said. “We have large leases ourselves which gives us 400 million tonnes-plus of ore. So we’ve got 20 years-plus in our own backyard.

But we are trying to keep another 20 years ahead, given we’ve
got all these processing plants downstream. So we are interested in seeing if we can identify some more, which will enable us to produce a little harder.”