13/08/2012 - 15:37

Aquila to cut spending on West Pilbara project

13/08/2012 - 15:37

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Aquila Resources boss Tony Poli.

Aquila Resources says it is going to slash spending at its West Pilbara iron ore project, as equity capital markets remain tight and clouds of uncertainty swirl around the global economy.

The Perth-based iron ore miner released an update on the West Pilbara project today, at which a definitive feasibility study is due late next month.

“In light of the changed broader macroeconomic environment, the company and its joint venturer are in discussions to conserve funds, until the timeline for approvals is more certain,” Aquila executive chairman Tony Poli said in a statement.

Mr Poli said Aquila and its partner, US-based AMCI, were reviewing relationships with third-party service providers and were conducting discussions to finalise next financial year’s budget for the project.

“Restricting expenditure to that which is clearly preserving and enhancing project value represents a prudent course of action, while awaiting key project approvals.”

Aquila and AMCI have identified a 1,713 million tonne JORC-compliant iron ore resource at West Pilbara, and the companies are seeking to finalise a project financing agreement with China Development Bank.

At close of trade today, Aquila stocks were down 10 per cent, trading at $2.42.

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