Red Rock Resources Plc (LON:RRR) said the Scoping Study carried out on Jupiter Mines's (ASX:JMS) Mt Ida manganese magnetite project indicates a financially robust operation.
Red Rock relayed a statement issued by its 4.5% controlled Australian associate which published the findings of the ProMet Engineers Pty Ltd study.
Red Rock maintains a 1.5% gross production royalty in respect of Mt Ida, in the Yilgarn region east of Perth.
The Scoping Study is based on a 20 year mine life, mining 25 million tonnes per annum (mtpa) to produce 10 mtpa of magnetite concentrate.
The base case capital cost is estimated at A$1,583 million, and operating costs A$62.78 per tonne of concentrate.
ProMet has put the net present value at A$1,685 million at an 8% discount rate, with an annual internal rate of return of 19.8%, based on a number of early-stage assumptions.
Major infrastructure already exists and requires little upgrading, the study found.
The report was based on the Mt Ida maiden inferred mineral resource of 530 million tonnes grading 31.9% iron at the Central Area, which represents 30% of the magnetite mineralization strike length.
An open pit contract mining operation will extract 25 mtpa run-of-mine ore to produce 10 mtpa of high grade magnetite concentrate, with an iron grade in excess of 68% iron, a silica content of 4.5%, and very low levels of impurities.
Based on these attractive scoping study results a full Feasibility Study will now be launched for completion at the end of 2012 so as to identify the best strategic option to develop the project, Jupiter Mines added.