PERTH (miningweekly.com) – ASX-listed Carpentaria Resources has reached an agreement with Mitsui & Co that would drive the development of the Hawsons iron project, in New South Wales.
Carpentaria on Monday noted that the Japanese trading house will contribute A$5.4-million towards the cost of a bankable feasibility study (BFS), which is estimated to cost some A$27-million, for an option over two-million tonnes a year of the Hawsons super-grade product, for a 20-year period.
Mitsui could exercise the offtake option by contributing $60-million to the Hawsons construction funding.
Carpentaria MD Quentin Hill said that the Mitsui financing, which provided a nondilutive option for shareholders, was a major vote of confidence in the Hawsons project, as a high-quality iron-ore concentrate/pellet feed project.
“Importantly, the financing reduces the project’s financing risk and enhances its bankability combining binding investment grade offtake funding support. This model is highly beneficial to Carpentaria shareholders, as it avoids dilution, addresses key project delivery risks and adds significant value to the project,” said Hill.
“We have a clear plan for development that is on track and we will continue to pursue non dilutive arrangements where possible.”
The Hawsons BFS is targeted for completion within the next 12 to 15 months, with Hill saying the company will also accelerate discussions with offtakers and fund managers to secure the remaining BFS funding, and to develop Hawsons into a major new mine.
A July prefeasibility study (PFS) estimated that the 10-million-tonne-a-year operation would have a post-tax net present value of $867-million and an internal rate of return of 17.8%. Revenues of $881-million a year and average earnings before interest, taxes, deprecation and amortisation of $401-million a year were reported in the PFS.