11/03/2021 - 16:07

CZR gears up for Pilbara iron ore DFS

11/03/2021 - 16:07

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ASX-listed aspiring iron ore miner, CZR Resources has set in motion preparations for a definitive feasibility study on the proposed development of its 85 per cent-owned Robe Mesa iron ore project 150km south-west of Karratha in WA’s Pilbara. The company has kicked off a raft of studies and surveys designed to facilitate the pillar processes required to obtain environmental and mining approvals for the project development.

ASX-listed aspiring iron ore miner, CZR Resources has set in motion preparations for a definitive feasibility study, or “DFS” on the proposed development of its 85 per cent-owned Robe Mesa iron ore project 150 kilometres south-west of Karratha in the Pilbara, Western Australia.

The Perth-based company has kicked off a raft of studies and surveys designed to facilitate the pillar processes required to obtain environmental and mining approvals for the project development. The approvals will in turn form part of the DFS, with CZR having started to map out the study’s scope and time frame.

Imminent workstreams include earmarking an optimum site held under the Robe Mesa exploration licence for conversion to a mining lease area and flora and fauna surveys that will trigger the process of native title negotiations and contribute to the approvals process for mining.

CZR says it is also gearing up to conduct heritage surveys that will ultimately clear the way for additional RC drilling to be carried out within and adjacent to the planned open pit as the company looks to increase its confidence in the Robe Mesa resource model.

Field work will first focus on the area of proposed development and will be followed by studies on potential haul-road and port options.

CZR Resources Managing Director, Dr Rob Ramsay said: “CZR has an outstanding opportunity to develop an iron ore project in the world’s most desirable iron ore region with low costs and simple production methods.”

“The strategy is aimed at unlocking the maximum value of the project at the earliest opportunity by pursuing a range of desktop, field studies and other activities at the same time.”

CZR’s pre-feasibility study, or “PFS” on the proposed low-CAPEX, low-strip-ratio iron ore mining, crushing, screening, haulage and export operation released late last year pointed to robust financial returns from exploitation of the Robe Mesa iron ore deposit.

The PFS envisaged Robe Mesa spitting out about $18 million a year in cash flow across the project’s initial life of mine.

Economic estimates used in the PFS were a conservative 62 per cent iron benchmark price of US$90 per dry metric tonne and a currency exchange rate of US$0.70, while C1 cash operating costs were forecast to average A$65 per dry tonne.

Robe Mesa has a pre-production CAPEX estimate of $51.1 million and an estimated capital payback period of only 19 months ascribed to it in the PFS.

Interestingly, the cash flow prediction soars to an eye-catching annual total of approximately $116.5 million when assuming a 62 per cent iron benchmark price of US$145 per dry metric tonne. At the moment the iron ore price is flying at just under $US170 a tonne.

According to the PFS, targeted output of two million tonnes of all-fines direct shipping ore, or “DSO” a year would be road-trained to Port Hedland for the expected initial mine life of 64 months.

Maiden probable ore reserves currently stand at 8.2 million tonnes going 56 per cent iron and the PFS shows the balance of the open-pit mining inventory being sourced from the inferred resource.

The reserves underpin Robe Mesa’s near-surface indicated and inferred resource of 24.7 million tonnes grading 56 per cent iron in the deposit’s upper interval of mineralisation.

CZR hopes to upgrade reserves and resources once it has reviewed the results of the next drilling program.

Although the PFS assumes a base case of hauling Robe Mesa DSO 450km to the Utah Bulk Handling Facility at Port Hedland for export, the company says it will investigate the viability of using port facilities at Onslow as an export location.

Early indications, according to CZR, are that the road haulage distance can be reduced to about 190km, potentially reducing ore transport costs materially.

 

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au

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