JOHANNESBURG (miningweekly.com) – Iron-ore miner Grange Resources and its joint venture (JV) partner SRT Australia on Friday announced the appointment of PCF Capital Group to assist with finding strategic investors for the Southdown magnetite project, near Wellstead, Western Australia.

Gange CEO Honglin Zhao stated Southdown was becoming increasingly relevant as steel markets continued to demand premium iron-ore products. He added that, given its iron content, Southdown’s concentrate product would be one of the highest-grade in the seaborne market.

“The appointment of PCF Capital will allow interested parties to formally convey their interest in the project,” said Zhao.

The Grange release emphasised that the project, located 90 km from the Port of Albany, would deliver a high-grade magnetite concentrate of 69.5% iron.

Southdown has over 1.2-billion tonnes of mineral resources, including ore reserves of 388-million tonnes.

It could produce 10-milllion tonnes of high-grade, quality magnetite concentrate at 69.5% iron, a year over a life of about 14 years – as demonstrated in the definitive feasibility completed in 2012. The project also has most of the regulatory and environmental approvals in place.

The initial capital expenditure is estimated at A$2.89-billion including engineering, procurement and construction management, owner’s costs and contingency of A$535-million. Operating costs are estimated at A$58.5/t of concentrate delivered at the ships rail in Albany, excluding royalties.

The majority of the land required for the project site, slurry and water pipe lines has been secured.  Further, Grange stated that the Aboriginal heritage concerns have been addressed with “minor” follow up work in progress.

The remaining Commonwealth Environment Protection and Biodiversity Conservation approval for the mine site, desalination plant, slurry pipeline and port facilities is progressing with the formal assessment commencing within the next few months.

The project, “offers the potential for steel groups to enter into long-term offtake agreements with a view to ensuring a secure continuum of iron-ore concentrate supply.”

The Grange release noted that a master schedule has been developed, with first ore on ship anticipated 27 months from final investment decision.