A preliminary economic assessment (PEA) of IMX Resources’ Mt Woods magnetite project in South Australia has delivered “highly favourable” results, demonstrating the potential for a viable near-term development at a cost of $295
In a statement, IMX Resources managing director Neil Meadows said the company believed Mt Woods was a unique opportunity in the Australian magnetite industry, as the infrastructure required to develop the project was already in place and being used by IMX’s existing Cairn Hill mine.
“As a consequence, unlike most pre-development and current Australian magnetite projects, Mt Woods does not require large-scale capital investment and is not reliant on third parties for new infrastructure in order to develop a potentially economically viable project,” Mr Meadows said.
“The existing rail and port infrastructure, along with the availability of grid power at Prominent Hill which could be reticulated to the project site at a modest capital cost, provides the back bone of the key infrastructure.”
Mr Meadows said combined with the relatively coarse grind size producing high-grade magnetite concentrate, these factors resulted in a capital intensity that was an order of magnitude lower than that typically associated with magnetite
“This allows for a smaller scale project to be developed cost-effectively, while maintaining optionality for a larger scale development.”
The Mt Woods Snaefell deposit has an inferred mineral resource of 569 million tonnes, grading 21.1 per cent iron at a cut-off grade of 18 per cent.
A base case development option of a 2.5 million tonne per annum mine, exported through Port Adelaide, would provide a mine life of more than 25 years.
Larger production rates of 4.7mtpa and 9.4mtpa were also investigated as part of the PEA.
“IMX’s proven development and operational experience in the region at our successful Cairn Hill mine has allowed the estimation of operating costs with a high degree of confidence. Together with the reduced risk and complexity of
project development, the potential project returns are strong at long-term forecast benchmark prices,” Mr Meadows said. Commissioned in 2010, Cairn Hill produces 1.7mtpa of premium quality magnetite-copper direct shipping ore product.
IMX reported that information from the PEA study would be used to support the partnering process with corporate advisor Azure Capital, which began early this year.
Production from Mt Woods is expected to start in 2016 following the completion of more detailed evaluation, financing and construction.