PERTH (miningweekly.com) - Southern Africa-focused Deep Yellow has completed the scoping study for its Shiyela iron-ore project, in Namibia, with results indicating the potential for a financially robust operation.

Based on an openpit mine delivering some eight-million tons of ore a year, to produce two-million tons a year of concentrate, the scoping study found that the Shiyela project would require a capital investment of some $467-million.

The study was based on a maiden inferred mineral resource of 78.7-million tons, at 18.88% iron.

“The results of the scoping study have demonstrated the potential for the Shiyela iron project. The addition of the hematite fraction to produce a blend product has enhanced overall project economics and given us the confidence, subject to funding, to continue conducting testwork that will add value to the project,” said Deep Yellow MD Greg Cochran.

He noted that the company recognised the potential for some improvement in capital costs at the project, in particular for infrastructure, where Deep Yellow has made some conservative assumptions for power and water, to ensure the project could provide its own supply.

Subject to the availability of funding, a feasibility study would now be conducted to incorporate the results of metallurgical testwork being done on the ore material. The study, which would also require additional resource drilling and a programme of reverse circulation and diamond drilling to target lateral and depth extensions, will be planned in 2012.

Cochran said that in addition, the geophysical signature of the main zone of the magnetic anomalies that host the project, would also be drilled to outline additional resource potential.

Further discussions would also be held to secure power and water supply, as well as port access.

At the end of last year, Deep Yellow submitted a mining licence application to the Namibian Ministry of Mines and Energy for the Shiyela project, and it was expected that further engagement with the regulators would be required in the coming months.

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