The company confirmed today it had acquired property through the takeover of all the issued share capital in Sri Lankan company PKD Resources after setting in motion a due diligence process in the area last August.
The package of five exploration licences hosts at least six mineralised zones - two of which have been drilled - near the city of Puttalam in the country's North Western province.
Exploration by RGC and Consolidated Rutile in the 1990s defined a 689 million tonne resource grading 8.2% HM for 56Mt of HM using a lower cut-off of 3%.
It includes 37Mt of ilmenite, 2Mt of rutile and 1.9Mt of zircon in red-orange sand, which forms a 2-60m thick sequence over portions of a coastal plain.
Iluka's mineral rights to the exploration tenements are restricted to 40% under Sri Lankan law but may be extended to 100% if the government deems the project of strategic status and in the national interest to develop.
Under Sri Lankan government policy, an application for strategic status for the Puttalam deposits will require some form of downstream processing before a mining licence is granted.
Iluka said it intended to start feasibility work shortly and would progress the appointment of a project development team as well as continuing engagement with local officials to secure necessary approvals.
After supervising laboratory work on the drill samples received to date, Iluka said the mineralogy and metallurgy of the area was well understood and the resources were ideally suited to low-cost open cut mining operations.
The acquisition represents an attempt to advance Iluka's strategy to augment its traditional chloride titanium dioxide business model of supplying high-grade feedstocks to the chloride pigment market, with the capability to also serve the sulphate pigment market in China.
"While subject to feasibility study work and all necessary Sri Lankan regulatory and Iluka approvals, it is expected that the deposit located on the tenements may deliver a capital-efficient, financially attractive investment opportunity for shareholders," the company said.