PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Razorback high-grade iron-ore project, in South Australia, has found that the project would require a capital investment of between A$572-million to A$675-million to develop.
Based on a mining rate of 20-million tonnes a year, the project would require a capital investment of A$572-million, delivering 1.9-million tonnes a year of iron-ore over a mine life of 37 years, said ASX-listed Magnetite Mines.
The base case operation would have a net present value (NPV) of A$296-million and a post-tax internal rate of return (IRR) of 14%, at an iron-ore price of $110/t.
The PFS also analysed a plant optimisation case, in which the mining rate was 18-million tonnes a year, over a 30-year mine life, producing 2.2-million tonnes a year of iron-ore, with a capital requirement of A$665-million. The net present value for this case was reported at A$520-million and the internal rate of return at 17%, based on an iron-ore price of $110/t.
The head grade improvement case considered a mining rate of 25-million tonnes a year, delivering 2.7-million tonnes of iron-ore over a mine life of 23 years, and requiring a capital investment of A$675-million.
The head grade improvement case estimated a post-tax NPV of A$669-million and an IRR of 20%.
“The PFS is a significant milestone for the company, and defines our optimised go-forward scope, which has been developed following rigorous and methodical testing of various options,” said Magnetite Mines CEO Peter Schubert.
“The resulting scope meets our objectives of practical scale, capital efficiency, attractive returns, high quality product and an expected low emissions footprint.”
Schubert said that the economic results of the PFS were attractive, and provided an excellent basis on which to continue the Razorback project toward development.
The company has selected the head grade improvement case as the basis for its definitive feasibility study.
“This small-scale startup allows for a practical development of a long-life, high-quality business with a targeted date for first ore on ship at the end of 2024,” Schubert said.