Nontraditional sources of funding are being sought for the development of the best of the four major iron-ore assets that Cavalla Resources has acquired in Liberia from BHP Billiton.
Cavalla COO Fidel Jonah said last week that the company expected that the iron-ore pricing environment would be better in three years’ time, when its Goe Fantro project would begin making use of existing infrastructure to export from a functioning port 70 km away.
“We intend to have our product on the boat at $21/t to $22/t,” Jonah said of the current impe- ratives of low-cost production, low capital expen- diture and high-quality ore.
“Even at today’s low prices, it makes money,” he enthused in an interview with Creamer Media’s Mining Weekly.
Goe Fantro would be the focus of the company for the next two years, when the other assets acquired from BHP would be advanced at a slower pace.
Cavalla, which has to date been funding development off its own balance sheet, is currently investigating “nontraditional funding sources”, as well as development agency funding.
Goe Fantro would require a capital investment estimated at $240-million.
Badly impacted on by the Ebola virus, Liberia is now being viewed by development agencies as a country to be supported and the Goe Fantro project has been identified as one that has the potential to improve the Liberian economy.
Goe Fantro’s hematite will provide direct shipping ore (DSO).
Production of five-million tons a year of 58% to 62% iron over a 20-year life-of-mine is envi- saged.
Besides Goe Fantro, the other exploration areas acquired from BHP Billiton last year include Kitoma, St John River South and Toto, a Kitoma II exploration licence, and the right of first refusal over three additional exploration areas.
The 1.9-billion-ton Joint Ore Reserves Committee-compliant resource includes 132-million tons of 57%-iron DSO.
Historically, Liberia has been one of Africa’s largest iron-ore exporters and the prospective country is also hosting growing gold mining activity.
Cavalla is the wholly owned iron-ore holding company of Jonah Capital, chaired by Sir Sam Jonah.