Aquila, FMG to assess Pilbara port

23/06/2009 - 09:28

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Aquila Resources and Fortescue Metals Group have teamed up to investigate the potential for shared development of port facilities at Anketell Point in the Pilbara.

Aquila Resources and Fortescue Metals Group have teamed up to investigate the potential for shared development of port facilities at Anketell Point in the Pilbara.

Both companies have signed a cooperation agreement that allows the exchange of information for the assessment of potential benefits of reduced capital and operating costs from the proposed port, which has the potential to export up to 350 million tonnes each year.

In a statement today, Aquila said the proposed port at Anketell Point could also be used by other iron ore miners in the region which are unable to develop their projects due to a lack of suitable port infrastructure.

"There will also be consideration of the benefits of sharing environmental study efforts to facilitate government approvals through the presentation of more unified, collaborative and coherent plans for port development and the provision of access by third parties," Aquila said.

"A working group will be formed to consider these issues, further develop concept arrangements and establish a framework for suitable development scenarios."

Aquila has chosen Anketell Point as its preferred port location for its West Pilbara iron ore project, which is a joint venture with AMCI.

The port option is currently being investigated in the project's the definitive feasibility study which Aquila stressed is separate to the cooperation agreement.

Fortescue is investigating the Anketell port site as part of options for the potential development of its Western Pilbara tenements collectively referred to as the Solomon group.

"Should the Co-operation Agreement discussions prove successful, further agreements may be required to enable joint development of any port infrastructure," Aquila said.

"The State Government is extremely supportive of such coordinated action between potential developers."

The agreement comes on the back of consolidation of iron ore projects in the Pilbara by junior explorers Warwick Resources and Hannans Reward.

Under that deal, Warwick will acquire the iron ore rights to Hannans' Jigalong project which has an exploration target of between 50 to 100 million tonnes of iron grading at around 58 per cent.

At the time, Warwick said the deal was first step in the consolidation process of iron ore projects located in the east Pilbara region, which also includes projects held by Ferraus.

Warwick added that development options will be investigated with other iron focused companies with a view of establishing a new iron ore mine in the region.

Pilbara iron ore miner Atlas Iron is a major shareholder in Warwick Resources. The company also has an agreement with Fortescue to access its existing port facilities at Port Anderson in Port Hedland.

 

 

The announcement is below:

 

 

Highlights

 Cooperation Agreement signed with Fortescue Metals Group Ltd ("Fortescue");

 Potential for sharing of capital expenditure;

 Potential for reduced operating costs through efficiency and utilisation of facilities;

 Facilitation of Government approvals; and

 Opportunities for third party access to port facilities.

Aquila Resources Limited (ASX:AQA "Aquila" or "the Company") is pleased to announce that API Management Pty Ltd ("API") which is the manager of Aquila's 50% owned West Pilbara Iron Ore Project, has signed a Cooperation Agreement with Fortescue to investigate the potential for shared development of port facilities at Anketell Point.

The parties to the Cooperation Agreement will exchange information to enable each party to assess the potential benefits of reduced capital and operating costs from the cooperative development of port facilities that can be used not only by API and Fortescue, but other developers of iron ore resources in the West and Central Pilbara, currently unable to develop their projects due to a lack of suitable port infrastructure.

There will also be consideration of the benefits of sharing environmental study efforts to facilitate government approvals through the presentation of more unified, collaborative and coherent plans for port development and the provision of access by third parties.

A working group will be formed to consider these issues, further develop concept arrangements and establish a framework for suitable development scenarios.

Anketell Point is the designated port site within the Definitive Feasibility Study ("DFS") being undertaken for the West Pilbara Iron Ore Project to develop an export iron ore operation based on a current resource base of 650 million tonnes (as released to the ASX on 24 April 2009), with the potential for significant growth in that base.

The initial planned production capacity is to be 30 million tonnes per annum of Channel Iron ore, with the opportunity to grow this rate through the addition of Bedded Iron products.

The opportunity remains for other developers in the region to participate in the consideration of the joint development of the Anketell Point port facilities. This port site has the potential for a staged development to accommodate the export of up to 350 million tonnes per annum of iron ore from the Pilbara region.

The Co-operation Agreement discussions with Fortescue are separate and distinct to the West Pilbara Iron Ore Project's DFS process. Fortescue's interest in exploring the Anketell port site is to provide it with options for the potential development of its Western Pilbara tenements collectively referred to as the Solomon Group.

Should the Co-operation Agreement discussions prove successful, further agreements may be required to enable joint development of any port infrastructure. The State Government is extremely supportive of such coordinated action between potential developers.

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