Future looks golden for Chinese miner

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 24 Jul 2012   Posted by admin


PRIVATELY-owned development group Asia Iron Australia holds a portfolio of more than 703 square kilometres of tenements in WA’s Mid West region.
With the financial backing of its Chinese shareholders, the company is progressing its most advanced project, Extension Hill, with a draft implementation study for
Stage 1 recently completed.
Asia Iron is a subsidiary of Asia Iron Holdings, a Hong Kong company 60 per cent owned by Chongqing Chonggang Minerals Development Investment [which is a joint venture between Chongqing Iron and Steel (Group) Company and Chongqing Foreign Trade and Economic Cooperation Group] and 40 per cent owned by SINOM Investments.
Within its tenement holdings, Asia Iron has defined magnetite and thermal coal resources. In addition to Extension Hill, it is focussed on initial exploration activities
such as: greenfield and brownfield target generation; target testing (including field mapping, drill testing, development of logical geological models, refinement of targets and follow-up drilling); sampling programs to determine mineralogical, geological and geochemical properties of the ore; preliminary evaluation through
resource modelling; and estimation of the grade, tonnes and likely economic viability of the defined resources.
Extension Hill magnetite project In the Mount Gibson Ranges, 280km southeast of Geraldton and 375km north of Perth, Asia Iron’s Expansion Hill magnetite project has a total JORC-compliant inferred magnetite resource of 1.780 billion tonnes, with additional areas of the project still in exploration stage expected to provide
additional resources in the future.
The company has received federal and state approvals to allow the development of a 1bt open pit mine with a 10 million tonnes per annum magnetite concentrate
production rate.
The project configuration also includes an ore processing plant, concentrator and site infrastructure; slurry, gas and water supply pipelines; a filter plant, product storage and ship loading facilities in Geraldton; and a 330 kilovolt power transmission line.
Asia Iron reported in its project fact sheet that Extension Hill would be developed in two stages, with total development investment in the project of about $3 billion.
Pre-development site work is under way, including the construction of an accommodation village for 120 people. To date, Asia Iron has received environmental
approvals for the open pit mine and processing plant; site infrastructure and accommodation; the power line and borefield; a slurry pipeline transport, filtration and concentrate storage system in Geraldton; and export through the Port of Geraldton. These approvals are valid for 40 years, with the company reporting that its existing mining leases have sufficient ore to maintain the 10mtpa production rate for up to 300 years.
During the construction phase about 2000 people will be employed, with 500 required on staff when the mine begins operations. Asia Iron plans to export the first shipment of ore from the mine to China, via the Port of Geraldton, in 2014.
Meanwhile, the company reported that a 16,000m reverse circulation drilling program started at Extension Hill on February 17, targeting the northern strike extension of the ore body with the aim of proving up additional magnetite tonnage.
In a March project update, Asia Iron stated that it had received both Australian Foreign Investment Review Board and Chinese National Development and Reform Commission approval for the Extension Hill project.
The update confirmed that the project had proven and probable open pit ore reserves of 358mt and that pilot testing had been completed, including conventional multi-stage grading and magnetic separation, indicating that the composite mine mass recovery exceeded 42 per cent.
A number of support services had also been contracted for the Stage 1 development, with a water licence issued, power supply offers received, pipeline and power line corridor access options exercised, and a memorandum of understanding executed in regards to the Port of Geraldton.
Asia Iron reported in the update that it had developed an execution strategy for Stage 1. WorleyParsons, the project management consultant, had proposed an engineering, procurement and construction management model; however, this model was not preferred by Asia Iron, which instead confirmed that it would engage directly with prospective contractors and clients to establish a favoured design and construction package.
Financial modelling for the first stage had also been completed, with project scheduling and cost optimisation under way.
Looking ahead, the company reported that it would maintain a focus on achieving the first shipment of concentrate by December 2014. It would continue to undertake Stage 1 optimisation while also carrying out Stage 2 assessment (such as resource definition drilling) and preparation of the site for project readiness.
Mt Gibson gold project Asia Iron’s purchase of the Mount Gibson project was settled on March 13. The mine is 290km northeast of Perth, within the Yalgoo-Singleton Greenstone Belt in the southern Murchison Province. It was operated as a gold mine for 12 years from 1986, producing 870,000 ounces of gold from 16.5mt of ore at an average grade of 1.68 grams per tonne.
Asia Iron paid Legend Mining $6.8 million for the project, along with a $1.4 million repayment of term deposit monies that had been used to secure environmental bonds. While Legend had originally entered an agreement to sell the asset to Top Iron, Asia Iron, through its subsidiary Extension Hill Pty Ltd, chose to exercise its right of first refusal in January, thereby preventing this sale from proceeding.
At the time of writing, Asia Iron had not publicly reported its intentions for the project.

 

By Rachel Dally-Watkins


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