Perth-based United Minerals Corporation NL will move to the next study stage after an initial assessment of its Pilbara iron ore project estimated a net operating profit after tax of up to $595 million a year.
In a preliminary scoping study, the base case scenario estimated a net present value of $1.45 billion for the treatment of 64.5 million tonnes of iron ore over a seven year mine life at the Railway Prospect project.
The net operating profit after tax was projected to be between $330 million and $595 million each year over seven years.
The average realised price used in the study was $111.80 per tonne of iron ore in 2011, declining to $93.70/t in 2013.
Total cash operating costs are pegged at an average $40.43/t over the life of the project.
The project is projected to have a capacity of 10 million tonnes per annum of direct shipping hematite iron ore, based on the 64.5mt Marra Mamba resource.
Production is anticipated to start in 2011.
The company said it will move to the pre-feasibility study stage and will consider funding options for the project including third party equity and joint ventures.
