PERTH (miningweekly.com) - A scoping study into ASX-listed Dragon Mining’s Pilbara project has delivered two development scenarios.

Under the early start scenario, the Pilbara project could support a production rate of two-million tons from the Rocklea deposit, with the ore set to be transported by 110 t multitrailer truck along public roads.

Under the second scenario, the Pilbara project would deliver some ten-million tons a year from the Rocklea and Nameless deposits, with the ore transported through third-party rail and port infrastructure.

Under the second scenario, production from the Rocklea deposit would start first, reaching full capacity when both Rocklea and Nameless were each producing five-million tons a year.

The first production case would require a capital investment of some A$46.1-million, while the second scenario would require a capital investment of some A$201.9-million.

Dragon Mining said on Friday that the study had concluded that the Pilbara project was both technically and economically viable, and had a robust business case. It would also deliver a significant financial return, even at its most basic configuration.

Subject to mining approval and the establishment of a suitable port facility for the early start-up scenario, Dragon Mining said that initial ore shipment from the Pilbara project could start as early as the second half of 2013.

“The scoping study confirms that our flagship Pilbara project has an extremely robust business case with the potential to deliver significant long-term economic benefits to our shareholders,” said MD Gang Xu.

He noted that during 2012, the company would continue to pursue the realisation of its early development objectives, focusing on issues relating to transportation, approval and financing.

“Our current major reverse circulation drilling programmes at Rocklea and Nameless are progressing well. We expect full results from the Rocklea drilling programme and new Joint Ore Reserves Committee estimates to be available by the end of the quarter,” he said.

The company has also already started a number of long-lead project-approval items, including environmental surveys, mining lease applications and port access negotiations.
 

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