PERTH (miningweekly.com) – The share price of junior Indo Mines toppled slightly on Wednesday on news that its 70%-held Indonesian pig iron project was considered uneconomical.
The ASX-listed company told shareholders that a prefeasibility study into the technology option selected for the project had been completed, with the financial analysis indicting that the project was not economically viable, based on the current commodity prices and the cost inputs.
However, Indo said that the analysis indicated that the valuation was sensitive to capital cost and financing structure.
A previously completed feasibility study had indicated that the two-million-tonne-a-year pig iron project would require a capital investment of some $158.3-million, and would have an operating cost of $24.20/t.
Indo said on Wednesday that the company was evaluating various options to add value to the investment, including the ability to reduce capital costs and to enhance the financing structure, before committing to a bankable feasibility study.
The company would also seek to reduce its operating expenses while it explored the various possibilities.
In line with this, Indo would streamline its board of directors, and on Wednesday announced the resignation of Chris Catlow and Stacey Apostolou, effective immediately.
Indo shares were trading at a low of 3c a share on Wednesday.