Surefire Resources NL’s (ASX:SRN) (FRA:GBL) scoping study for Perenjori Iron Project in Western Australia has verified the project's economic potential, pointing to a low capital operation producing premium high-grade magnetite concentrate.
The scoping study, which was undertaken by MinRizon Projects Pty Ltd, gives the board comfort to progress the project with managing director Vladimir Nikolaenko stating: “Surefire is delighted with the outcome of the scoping study."
“Confident” to move project forward
He said: “Technical assessment has already indicated the ore can produce a high-grade magnetic concentrate that is attractive to the market.
“This first-pass preliminary economic assessment has now provided the board with confidence that the Perenjori Iron Project is commercially attractive.
“Surefire can now confidently plan to move the project forward.”
Scoping study considerations
The scoping study, based on an inferred mineral resource of 191.7 million tonnes at 36.6% iron estimated by internationally recognised consultants CSA Global, was also based on metallurgical work supervised by Mintrex Pty Ltd.
Additional test-work will be undertaken during the pre-feasibility study stage to confirm the conclusions.
This study examined using conventional mining, beneficiation and transport processes and concentrated on the beneficiation and transport components while pit optimisation in support of open-cut mining is planned.
Location
The Perenjori Iron Project is well-positioned within around 15 kilometres of both the Morawa-Peronjori trunk rail line and the Karara rail spur.
Rail distance to Geraldton port is 219 kilometres and the Three Springs-Golden Grove electricity transmission line is within 8 kilometres of the deposit.
Numerous towns occur in the district that may supply the workforce for project development.
Mining method
Conventional open-pit methods using standard drill and blast and shovel and truck will be used to deliver magnetite ore to the beneficiation plant and waste to waste dumps.
Nominal contract mining costs were used.
Beneficiation flow sheet
Ore will be beneficiated using standard crushing and two pass grinding, and magnetic separating. A rougher magnetic separator will use 220µm feed, with magnetic material passing to a secondary AG mill and fine magnetic separation circuit using a grind size of P80 of 35µm.
Weight recovery is expected to be 44% with an 85% yield of iron being achieved.
Transport
The project has access to railways to the north and south, both within 15 kilometres.
A spur railway line and trucking to railhead options were considered.
Estimates of capex and opex for both scenarios have a similar effect on the project’s Net Present Value (NPV) within the accuracy of the costing estimate.
Port storage and reclaim facilities at Geraldton to service Panamax-sized vessels is included in the costings, however, access to port facilities will need to be negotiated.
Capital and operating cost estimates
A high-level NPV-based financial model was developed to assess the economic viability of the project.
Cost estimates were deemed to be to an accuracy of +/-35%.
While regulatory guidelines discourage the release of mining and production rates and financial forecasts without more highly developed studies, the scoping study has underpinned the board’s confidence that this project can deliver competitive high-grade magnetite at an economically rewarding return on investment.
Timeframe for development
No timeframe for development has been set at this stage.
Surefire is planning to undertake additional resource definition work, in particular ensuring the stated inferred resource is converted to JORC (2012) standard.
The company has sufficient finances to undertake this work.