www.carpentariaex.com.au
Carpentaria Exploration (ASX: CAP) is an exploration company focused on discovering base, precious metals and bulk commodities in eastern Australia. The company currently has interests in iron ore, tin, gold, copper and coal exploration projects. Discoveries to date include: Hawsons Iron Project - NSW and the Euriowie Tin Project - NSW.
Carpentaria Exploration PFS points to development of Hawsons JV Iron Project
Carpentaria Exploration (ASX: CAP) has completed the Pre-Feasibility Study (PFS) on its 60% owned Hawsons Magnetite Iron Project with results indicating potential production of 20 million tonnes per annum (Mtpa) of high grade iron ore concentrate (69.9%) to mine gate.
The positive net present value and internal rate of return from the PFS for the project in the Broken Hill district of New South Wales should provide Carpentaria and the JV with confidence to proceed with the Definitive Feasibility Study (DFS).
The Project is held by a joint venture between Carpentaria and a private company Bonython Metals Group.
The results in this Study are based on work completed by independent consultants GHD.
The company is planning a start-up mine of 5-6 Mtpa of iron concentrate using existing transport and port facilities with a mine life of at least 20 years after an initial ramp up.
Importantly, the project is Well located to existing key project infrastructure and has and ready access to skilled labour.
Development capex for the project is estimated at A$2.8 billion including all mining, processing and infrastructure requirements and there is a forecast site cash operating cost at mine gate of A$35.75 per tonne of concentrate.
A positive NPV after tax of A$2.8 billion and IRR of 21.3% has been forecast.
The initial Inferred Resource of 1.4 billion tonnes underpins the PFS outcomes with further significant tonnage potential. Additional pits or a deeper single pit are esxpected to have a 50 year plus total mine life.
The life of project strip ratio is 0.26 : 1 (Waste Tonnes : Mineral tonnes) and the ore has a very low bond work index of 6.3 kwh/t.
JV partner Bonython Metals Group (BMG) has the right to earn an 80% equity in the Project at which point Carpentaria will be free carried up to the targeted production of 20 Mtpa of iron ore concentrate.
BMG will fund the Feasibility Study with an estimated cost to it of $20 million to take BMG to 51% of the Hawsons. If the study is positive, Carpentaria would have cash of $23 million and free carried to the 20mtpa milestone. BMG would own 80% of Hawsons.
The project is expected to produce a very high grade concentrate of 69.9% Fe with low deleterious elements at a grind of 38 microns. This will make it suitable for low cost slurry pipeline transport to port and also be ideal for pelletising.
The company intends to minimise costs to the project by using common usage infrastructure including transport and port, given the other potential producers on the Braemar Iron Formation Trend.
Importantly, existing rail and port infrastructure is capable of servicing the initial 5-6 Mtpa of concentrate production from Hawsons. The company intends to invite third parties to tender for and build the required infrastructure.
The PFS has shown that the Hawsons Iron Project has the potential to be a very robust project.
The JV partners will likely now proceed with the DFS which will involve further resource drilling and detailed design to improve the accuracy of the cost estimates.
A key aspect will also be the determination of the most appropriate scenario for the development of key transport infrastructure and port facilities in South Australia to service not only the Hawsons project but other iron ore projects on the Braemar Iron Formation.
Hawsons has strong potential for resource upside. From a current inferred iron resource of 1.4 billion tonnes at Davis tube Recovered Grade of 15.5% for 220 million tonnes of contained iron to an exploration target of 6-11 billion tonnes at 14-17% magnetite DTR with a concentrate grade of 69 -71% Fe.
Significantly, this comes with a relatively low level of impurities, to a depth of 250 metres over an estimated strike length of 34 to 51 kilometres.
This is considered to be one of the largest magnetite exploration targets in Australia. Importantly the magnetite occurs in a siltstone and is very soft, enabling low cost mining and crushing.
Impressively, Hawsons looks to be a low cost per tonne operation.
On May 23 Carpentaria had cash and deposits on hand of A$10.12 million.
