PERTH (miningweekly.com) – A prefeasibility study (PFS) into ASX-listed Equatorial Resources’ Mayoko-Moussondji iron project, in the Republic of Congo, has revealed that the project could produce 2.5-million tonnes a year, over an initial eight-and-a-half-year mine life.
The PFS estimated that the project would require a capital injection of about $181.16-million and would have an operating cost of $39.93/t.
“The results confirm that even in a low iron-ore price environment, Mayoko-Moussondji will operate at a healthy operating margin and generate robust cash flows,” said Equatorial MD and CEO John Welborn.
The project was expected to deliver an average earning before interest, taxes, depreciation and amortisation of around $89-million a year at steady-state production, with the project tagged to have a net present value of $115-million and an internal rate of return of 25.1%.
The PFS was based on the staged development of a 2.5-million-tonne-a-year hematite fines product operation, starting with a production rate of one-million tonnes during the first year of operations and ramping up to full production by the fourth year of operation.
The study was based solely on an indicated mineral resource of 55-million tonnes, grading 39.3% iron, which currently comprised only 30% of the total hematite mineral resource with significant upside to increase mine life with the conversion of the existing inferred mineral resource into indicated resource with additional drilling.
The project currently had an ore reserve estimate of some 38.5-million tonnes, grading 42% iron.
Welborn said on Tuesday that the PFS had successfully defined Equatorial’s preferred mining and processing plans, scale, throughput rate, initial project life and infrastructure requirements to support the intended production profile.
He noted that the positive economic fundamentals now provided Equatorial with a platform to advance discussions and negotiations with potential strategic partners and financiers before starting project development.