JOHANNESBURG (miningweekly.com) – Aim-listed iron-ore and manganese development company Ferrex on Wednesday announced that a desktop study at its Mebaga direct shipping ore (DSO) iron-ore project in northern Gabon had indicated that there was significant potential for low operating costs.
The desktop study included two operational scenarios, namely a one-million tonnes DSO a year and a three-million tonnes DSO a year scenario.
"We are encouraged by the results of this desktop study which, with a free-on-board cost of between $41/t and $45/t for both operational scenarios, demonstrates the significant potential for low operating costs.
“Importantly, independent marketing agents have confirmed that Mebaga's ore, which has low levels of silica, alumina and phosphor, should be sold at a premium to the 62% iron benchmark price.
“When the low capital expenditure estimations are coupled with a premium benchmark DSO price and the fact that we will use a large amount of existing infrastructure, the potential returns for Mebaga look very exciting,” Ferrex MD Dave Reeves said.
Meanwhile, the study also found that the project had a significant benefit as the closest DSO project to the Libreville port in the Belinga Super Group area.
Reeves added that the company was now focused on closing a new funding option for the project and intended to start drilling in the next dry season, which would be December this year or January 2015.
“This drill programme will be followed by a more in-depth scoping study that will investigate the operating costs in more detail and define the capital costs associated with the project,” Reeves concluded.