Name and Location
Central Eyre iron project (CEIP), Australia.

Client
Iron Road.

Project Description
The definitive feasibility study (DFS) on the CEIP, located on the Eyre peninsula, in South Australia, has confirmed the project’s viability to deliver high-grade and low-impurity iron-ore concentrate, providing a competitive and clean blending solution for the Asian market.

The DFS modelling is based on a 25-year mine life, comprising an initial 17 years using proven and probable reserves of 2.071-million tonnes at 15.5% iron and an additional eight years using a 4.5-billion-tonnes resource grading 16% iron, of which about 3.5-billion tonnes, or 77%, is classified as measured and indicated.

The base case development model envisages a 21.5-million-tonne-a-year operation, following a staged ramp-up of more than two-and-a-half years.

The base case and production growth model assumes initial base case production to the end of the fifth year of operations, when production is increased to 24-million tonnes a year from additional resources, and that production will continue at that rate until year 28. This scenario is based on future production being sourced from inferred resources and the conversion of a portion of the significant exploration target to mineral resources.

Ore treatment by conventional crushing, milling and magnetic/gravity separation is planned to deliver high-grade concentrates containing 67% iron at a relatively coarse size distribution greater than –130 μm (80% passing; P80).

Net Present Value/Internal Rate of Return
Not stated.

Value
Capital costs for the CEIP plant, facilities and infrastructure have been calculated at $3.98-billion, including a 9.4% contingency.

Duration
Iron Road is expected to start construction during 2015, with first production expected by 2018.

Latest Developments
Iron Road has signed four nonbinding memoranda of understanding (MoUs) and an indigenous land use agreement over its CEIP.

The MoUs, signed with infrastructure investors, enables Iron Road to progress funding for the infrastructure components of the project.

The Central Eyre infrastructure requirements comprise a deep-sea port and export facility at Cape Hardy capable of loading Capesize vessels, as well as a standard-gauge railway line from the proposed mine to the port, a power transmission line, water pipeline and borefield.

The MoUs have been signed with Aixi Investments and enables for the parties to agree to cooperate on negotiations of third-party contracts, such as construction contracts, operation agreements and an infrastructure access agreement.

Iron Road MD Andrew Stocks has said that the successful financing of the infrastructure component of the CEIP, alongside long-term supply agreements over mine offtake, will take the company a long way towards achieving full sources of funding.

“Funding by international pension funds will also support us in our commitment to allow third-party access to the Central Eyre infrastructure, including local grain exports.”

Iron Road has also signed nonbinding MoUs with Chinese steel companies to support offtake agreements from the CEIP.

Under the MoUs, the steel companies will conduct technical evaluations of the iron concentrates at the project to verify the commercial and technical merits of the product as a precursor to entering discussions towards a letter of intent for the long-term supply of concentrate.
Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Iron Road MD Andrew Stocks, tel +61 8 9200 6020 or email astocks@ironroadlimited.com.au.