Aquila Resources is a step closer to realising its $6 billion West Pilbara iron ore project after studies showed that two mines that would supply the overall development were economically and technically feasible.
Aquila is a coal producer but wants to join the ranks of iron ore miners, and released today feasibility studies on two key proposed mines in the project in Western Australia.
Shares in Aquila were up eight cents, or 2.87 per cent, at $2.87 by 1500 AEST.
Despite today's rise, Aquila's share price is still near a three-year low and down more than 51 per cent this year.
Aquila said the studies found the Mt Stuart Iron Ore Joint Venture (JV) could produce 289 million tonnes over 16 years, while the Red Hill JV could contemplate production of 70 million tonnes over 14 years.
Aquila is yet to confirm it has won the right to build a new port for the project at Anketell Point in WA, which is crucial to secure the majority of $3 billion in funding needed to develop the project.
There are concerns about whether Aquila can fund the integrated mine, rail and port development and has been selling many of its coal assets to raise cash.
A feasibility study on the complete project is expected before the end of the year, with $400 million already spent on its development.
First iron ore shipments are targeted for 2014.
Aquila is a 50 per cent partner in the project with US private group American Metals and Coal International, which is controlled by South Korean global steel giant Posco.
