Photo by: Reuters
PERTH (miningweekly.com) – Junior iron-ore developer Tawana Resources is instituting a number of cost-cutting measures in the development of its Mofe Creek project, in Liberia, as iron-ore prices tumbled to a five-year low.
The ASX-listed company said on Tuesday that it had adopted a tight fiscal regime to manage Mofe Creek’s financial affairs, with all value-accretion tasks and opportunities being advanced to ensure that the project continued to progress at an optimal pace, in preparation for a potential recovery of the iron-ore price, and the restart of full site-based activities.
Tawana suspended all nonessential field activities in August this year, in response to an outbreak of the Ebola virus.
All staff and personnel with outstanding leave have been placed on mandatory leave or temporary redundancy, Tawana said on Tuesday, to minimise cash-burn. However, the company said that this was done with the intent of maintaining their skills and intellectual property for the future development programme.
Tawana would also make several organisational changes in the coming months to ensure that it was effectively resourced to advance the project from a prefeasibility study (PFS) stage into an operational mine.
Furthermore, a refinement of the financial model for the Mofe Creek project would be undertaken once the processing plant PFS design details were finalised, and the refined capital and operating cost have been determined.
This model and technical data would form the basis for negotiating strategic offtake agreements, and the appropriate structuring of the project’s financing, reflective of the market conditions, the company said.
The results of the PFS were expected to be available in the second quarter of 2015, following the completion of the current resources infill and step-out drilling programme, along with the advancement of the mineral development agreement and the environmental- and social-impact assessment.
The Mofe Creek scoping study had estimated that the project could deliver between 1.2-million and 1.5-million tons a year of iron-ore, for a start-up capital of $53-million.