Aspiring iron ore miner Gindalbie Metals Ltd has signed a project alliance agreement with engineering company Thiess Pty Ltd to support development of its Karara project in the mid-west region near Geraldton.
Gindalbie and Thiess, a subsidiary of Leighton Ltd, aim to complete a definitive feasibility study this year for development of both the magnetite and hematite components of the Karara project.
Subject to satisfactory completion of the feasibility study and securing funding, the two companies plan to work together on development of the project, which is likely to cost in excess of $700 million.
Gindalbie is one of several companies, including Murchison Metals and Midwest Corporation, seeking to develop large iron ore projects in the mid-west region.
The Mt Karara project includes a 1.5 million tonnes per annum "starter" hematite project previously known as Blue Hills, which is due to starting mining in 2007.
The infrastructure for the starter project is already in place.
Full announcement below:
Western Australian iron ore group Gindalbie Metals Ltd (ASX: GBG) today announced the signing of a Project Alliance Agreement with integrated engineering and services group, Thiess Pty Ltd, to facilitate the completion during calendar 2006 of an integrated Definitive Feasibility Study ("DFS") for development of both the magnetite and hematite components of its Karara Iron Ore Project in Western Australia's Mid West region.
The Project Alliance Agreement provides for a collaborative approach to the management and completion of all studies - including preliminary engineering design, planning, procurement, cost estimates, scheduling, permitting, stakeholder management and technical and commercial risk management - covering both the Karara magnetite/pellet project and the Karara hematite direct shipping ore (DSO) project.
The agreement secures the involvement of one of the world's leading mining services providers in the feasibility and pre-development phase of the Karara Project and is anticipated to lay the foundation for a subsequent Project Alliance Agreement with Thiess for the design, construction, commissioning and operation of the Karara Project, subject to achieving acceptable cost estimates and development scheduling and securing debt and equity funding. The Alliance will be known as the "Karara Alliance".
