PERTH (miningweekly.com) – A scoping study into the Pilbara iron-ore project, in Western Australia, has confirmed the viability of an opencut mining operation, ASX-listed Flinders Mines said on Tuesday.

The scoping study was based on the current mineral resource estimate of 1.4-billion tonnes, and indicated a production target of 615-million tonnes over the project’s mine life.

“Having now finalised the transaction agreement with BBIG, ready for the extraordinary general meeting shareholder vote in 2020, Flinders has now been able to complete a scoping study to enable the release of a production target statement for the Pilbara iron-ore project,” said chairperson Neil Warburton.

“The company believes it now has a reasonable basis for all of its assumptions, including finance, development, infrastructure and marketing and is the next step in bringing the Pilbara iron-ore project into potential production.”

Flinders in November of last year inked a binding agreement with BBIG for a farm-in and joint venture (JV) agreement over the Pilbara project. Under the terms of the agreement, BBIG will fund feasibility studies for the iron-ore project in return for an initial 10% voting interest in the JV vehicle.

Once a final investment decision is reached, BBIG and any prospective funding partners would fund the development and construction of the Pilbara project in return for a further 50% interest in the project, with Flinders either electing to continue to hold a 40% free-carried share in the project, or to convert its shareholding to an ongoing 2.5% gross revenue stream over the life of the mine.

While the Pilbara iron-ore project is being progressed, BBIG will continue the development of the Balla Balla infrastructure project, with the Pilbara project to become a foundation customer under a long-term infrastructure services agreement.

As part of the foundation customer status, a rebate for third party use of the infrastructure, and a post-Pilbara iron-ore mine life fee have been negotiated, enabling Flinders to share in the longer-term benefits of the infrastructure.