Coziron in box seat as Palmer/CITIC brawl heats up
Multi-commodity exploration company Coziron Resources is sitting on some pretty interesting real estate at its Ashburton magnetite project, in the western Pilbara region of WA.
The ASX-listed junior holds extensive magnetite deposits that are at least 6km long, 1km thick and located only 40km from CITIC Pacific’s world-class Sino Iron project where the Chinese giant is locked in a fight to the death with its leaseholder, mining entrepreneur and wannabe politician Clive Palmer.
Coziron’s project is also just 70km from CITIC’s export hub at the Cape Preston Port, which is now the biggest shipper of the commodity on the planet.
CITIC has exported more than 50 million tonnes of high-grade magnetite concentrate from Cape Preston to China since production began in 2013 after it struck a deal with project founder Clive Palmer.
But it has been far from smooth sailing at the Sino project, with CITIC’s desire to expand the project’s footprint being delayed by Palmer, who is refusing to submit the necessary approvals to the WA Government unless CITIC agrees to certain conditions, effectively crippling the economies of scale that a larger operation could offer.
Palmer has offered an “olive branch” of sorts this week, indicating that he is willing to settle the dispute over the future of CITIC’s desire to enlarge the size of the project’s waste dumps for about $750m.
Earlier in the week, it was revealed that Mr Palmer would continue to receive more than $1m per day from the Sino project, courtesy of a royalty paid to his company, Mineralogy, of up to USD$10 per tonne after a court decision rejected an appeal by CITIC against part of the ongoing royalty arrangement.
All of this raises an obvious question for the Chinese operators - is there an alternative source of high-quality magnetite product available nearby that CITIC could access?
Just the royalty payment alone that CITIC is now paying to Palmer to mine his magnetite deposit would be material for Coziron, who is currently capped at around $18m.
Coziron’s project is adjacent to major transportation corridors only 5km off a bituminised highway and 1-2km east of two operating gas pipelines, which could potentially be used to power a large magnetite processing facility.
The Ashburton magnetite project is a unique style of felsic volcanic-hosted mineralisation that is a premium schistose iron ore product, requiring much less energy to smelt and creating less pollution given its simpler liberation and low sulphur content.
RC drilling has turned up incredibly consistent widths of magnetite mineralisation too, such as 156 metres grading 28% iron below the base of oxidation, with preliminary analytical results showing mass recoveries of magnetic iron content up to 42% and a relatively easy pathway via traditional beneficiation processes to generate a 67% iron ore product.
Metallurgical work undertaken by Coziron has shown that the upgraded Ashburton project ores have low silica, phosphorus and alumina contents and very importantly, no problematical blue asbestos, all of which is a real gift in the iron ore game.
The company rates the project as a high priority target since it represents a new, large-scale setting for sought after magnetite mineralisation in the western Pilbara, which has become the preferred feedstock in steelmaking as the quality and grade of traditional bulk hematite and goethite iron oxide ores declines globally.
Coziron have planned further drilling programs in the region, which are designed to deliver a maiden JORC-compliant resource for the intriguing Ashburton magnetite project.
According to the company, the western mineralised zone of the ore system alone has an exploration target of 816 million tonnes to 1,567 million tonnes.
The scale of these tonnages has the potential to support a very long-life mining and processing operation at the Ashburton magnetite project.
It is likely that others will be looking on with great interest too as Coziron starts proving up its magnetite iron resources in the Pilbara, particularly as the benchmark price for iron ore fines has lifted by 33% in the last four months and magnetite concentrate is sold at a premium to that price.
It also won’t hurt either that Chinese steelmakers have regained their appetite for high-grade iron ores, despite rising prices, as stockpiles of quality ores fall throughout the country.
All of which leaves Coziron in a pretty good space as it seeks to define a new mineral resource of quality magnetite ores in the western Pilbara.
And the fact that it is just 40km from CITIC’s operation where the latter company is having great difficulty with its current landlord might just make for an interesting case study.
Coziron Resources (CZR)
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