EXCHANGING HANDS Cavalla Resources bought the Goe Fantro iron-ore project from BHP Billiton
Iron-ore mining company Cavalla Resources has started work on its newly acquired Liberia-based iron-ore project, Goe Fantro, which is scheduled to be brought into production by 2018.
The company notes on its website that the Goe Fantro 2016/2017 work programme will consist of infill drilling of the Goe and Firestone ranges to enable the resource to be upgraded to the indicated or measured resource classification.
In addition, metallurgical studies, density measurements and environmental and social studies will be expedited to complete a scoping study and, subsequently, a prefeasibility/feasibility study. Initial exploration activities will include further drilling of about 2 000 m at Goe Fantro. The drilling programme will seek to define the distribution and extent of any potential mineralisation.
“Liberia, which was historically the largest exporter of iron-ore in Africa and the fifth-largest iron-ore producer globally, is described as one of the last underexplored regions in the world. “The country is hugely prospective for minerals exploration and production, hosting several world-class iron-ore deposits as well as diamonds and gold, with possible offshore deposits of crude oil,” notes Cavalla.
The Geo Fantro start date is in line with scoping studies conducted by Cavalla, which also indicate a capital cost of between $160-million and $230-million to produce five-million tons a year of iron-ore, grading at 58% to 62% iron at an estimated operating cost of $22/t over a 20-year life-of-mine.
Cavalla, the exclusive iron-ore holding company of mining and mineral resources investment company Jonah Capital, intends to develop the other assets connected to the project in a phased approach.
Cavalla completed the acquisition of exclusive rights granted over four exploration areas from diversified major BHP Billiton in October. These include Goe Fantro, Kitoma, St John River South and Toto, as well as a further exploration licence, Kitoma II, as well as the right of first refusal over three additional exploration areas.
The defined iron-ore resources comprise a 1.9-billion ton Joint Ore Reserves Committee-compliant resource, including 132-million tons of direct shipping ore, grading at 57% iron.
Cavalla Resources and Jonah Capital executive chairperson Sir Sam Jonah says the transaction has the full support of the government of Liberia, as it fosters the country’s economic growth, following the eradication of Ebola. “Cavalla is best positioned to convert these projects into producing assets.
“This transaction demonstrates our commitment to invest in Liberia, reinforcing Liberia’s position as a favourable investment destination, and which I hope will serve as a catalyst for attracting further investment to the country,” says Jonah.
He adds that the development of Liberia’s mineral resource sector is well under way and that Cavalla looks forward to working closely with the Liberian government and the local communities where it operates to contribute towards the continuing growth of the country’s economy.
The growth in supply in the iron-ore market and the resulting low-price environment have presented an attractive opportunity for Cavalla to acquire a unique combination of well-defined, high-quality assets, located near existing infrastructure, which provides scope for development in the near to long term.
“The acquisition positions Cavalla favourably to capitalise on the positive long-term prospects in the global iron-ore market with a view to becoming a significant, low-cost producer of [high-]quality iron-ore products with minimal logistics and infrastructure risk,” Jonah says.
Cavalla’s project portfolio also includes the Buchanan project, where 1.2-million tons a year of iron-ore, grading at 65% iron concentrate, is to be produced for five to seven years from iron-ore fines above surface.
The company also has six mineral exploration licences for iron-ore and gold, covering an area of 4 000 km2. Aeromagnetic surveys, mapping and sampling have been conducted. A second-phase exploration programme is under way.
Cavalla is also in a joint venture agreement with diversified miner Anglo American’s iron-ore supplier Kumba Iron Ore on two exploration licences.
Meanwhile, Jonah Capital has interests in South African metallic iron units producer Iron Mineral Beneficiation Services (IMBS). IMBS holds patented, cost efficient technology capable of reducing iron-ore fines, without agglomeration, to produce metallic iron.