Alien Metals Ltd (AIM:UFO, OTC:ASLRF) said it was making good progress at its flagship Hancock iron ore project, where production is expected to start in 2023, lifting its shares by as much as 11.5%.
Results from a metallurgical test work programme, now completed, further highlight the high-grade and low impurity nature of the Hancock deposit, said AIM-traded Alien. The vast majority of production will be fines, meaning minimal processing will be required, resulting in lower operating costs.
Due to the ratio of fines to lumps and low impurities of the direct shipping ore (DSO) material, Alien is in advanced discussions with several potential offtake partners.
The company said it is also in preliminary talks with a number of potential funding partners and has been presented with a range of funding options, both equity and debt.
"The development aspects of the Hancock iron ore project to be shovel ready for early 2023 are progressing very well,” said chief executive Bill Brodie Good.
“We are on track to have all the permitting in place, and will soon be in a position to commence mining next year. Additionally, in-depth discussions with third party contractors and potential offtake partners to enable us to get into production in 2023 are continuing."
The shares were up 11.5% at 0.73 pence in early trading .
Last September, Alien announced a maiden inferred resource estimate of more than 10 million tonnes for Hancock and has since said that it believes there is significant potential to increase the resource.
READ: Alien Metals reveals maiden inferred resource of 10.4Mt for Hancock iron ore project