West African Minerals Corporation (LON:WAFM) is to look for partners for its Sanaga iron project in the Cameroon after a scoping study indicated it could be brought into production in two years.
Sanaga is near the Port of Douala, Cameroon’s second city, and the study suggested an open pit iron ore mine and concentrator, using either transportation by barge down the Sanaga River or a slurry pipeline to a port at Yoyo, can payback back the up-front costs of US$194-298mln between 2.5-4 years depending on the route chosen.
The deposit has a resource of 82.9Mt at 32.1%Fe and is 70km from the Atlantic Ocean, with access to existing road and power infrastructure.
Depending on which transport route is chosen the net present value (free cashflow over the project’s life) is between US$262-292mln, said consultant RHDHV.
Output would total 2.4Mtpa premium grade (69% Fe) concentrate over 16-17 years, with production to start two years from an investment decision.
Gerard Holden, WAFM’s chairman, said: “The geometry of the mineralisation, which outcrops at surface, lends itself to low cost, low stripping ratio open pit mining.
“Metallurgical testing on the primary magnetite ores indicate that the project can produce a high-quality iron ore concentrate product (69% Fe) that will command a premium price in the market place.
“The Sanaga Project's proximity to the ocean and access to existing road and power infrastructure allows low capital expenditures and a short timeframe to develop export infrastructure.
“On-going feasibility work and engagement with regulators and stakeholders is planned as the next steps to advance the project."