JOHANNESBURG (miningweekly.com) – Metals developer Centrex Metals will write down the noncash carrying value of its South Australian iron-ore portfolio and shift its focus to the development of the Oxley potash project, in Western Australia.

The ASX-listed company on Wednesday said the recent volatility in spot and long-term forecast iron-ore prices had led to its decision to impair the noncash carrying value of its entire iron-ore portfolio asset base by A$17.4-million in the 2015 financial year.

The iron-ore exploration assets included Wilgerup, the Eyre Iron joint venture, Bungalow, the Middleback ranges tenements and Cockabindie & Cockabindie North.

“Centrex believes potential remains in its iron-ore assets over the long term; however, to allow the company to focus its activities on nearer-term development of the Oxley potash project, in Western Australia, along with metals exploration in New South Wales, consideration will be given towards options available to recoup value from its iron-ore portfolio,” the company said.

Centrex bought the Oxley project from fellow ASX-listed Sheffield Resources for A$2.5-million in March.

The company had now appointed Bureau Veritas Minerals to undertake initial bench scale roast testwork for the project over the next three months.

A 25 kg composite sample from previous drilling would be used to complete thermogravimetric analysis, roast tests and roast product water leaching analysis for blends of the Oxley ultrapotassic microsyenite with various salts.

Bureau Veritas would analyse the optimal conditions of individual salt blends to convert potassium into a leachable form for extraction from the potash feldspar that comprises up to 90% of the Oxley ultrapotassic microsyenite.

Amec Foster Wheeler, which was earlier this month appointed to undertake a technical literature review of processing route options to extract potassium from the potash feldspar, would oversee the testwork programme.

Further, Centrex had received approval from the Western Australian government to complete a single PQ diamond hole to provide a bulk metallurgical sample for subsequent larger-scale testwork, including pressure leach trials.

Meanwhile, engineering firm Clough was nearing completion of a conceptual study into the construction of a nitric acid plant at the Oxley site for the potential production of high-value potassium nitrate fertiliser.

The study, which would be completed in July, had taken into consideration the supply of ammonia for nitric production from existing third-party operations in Western Australia, as well as in-house production from a specialised small-scale plant.