Sundance Resources says the first stage of its Mbalam iron ore mine in West Africa will cost $US4.6 billion, after releasing a study which confirmed the project's viability.
The first stage of Mbalam focuses on producing direct shipping ore for 10 years, with the second stage covering the next 15 years of production of high-grate itabirite hematite concentrate.
The definitive feasibility study indicated the mine would produce ore averaging 63.6 per cent ferrous at a rate of 35 million dry tonnes per annum.
The $4.6 billion capital development cost for the first stage of Mbalam includes $US914 million for mining, processing and infrastructure, $US2.4 billion for rail, and $537 million for port infrastructure.
The results of the study also forecast an average operating cost of $US21.20 per tonne.
Sundance also announced it had completed a pre-feasibility study for the second stage at Mbalam, which is located on the border of the Republic of Congo and Cameroon.
Sundance managing director, Giulio Casello, said the completion of the studies was an important milestone for Sundance shareholders and partners.
"This brings to fruition more than three years of hard work and positions Sundance to realise its vision of becoming a world-class iron ore producer," Mr Casello said.
"These two studies have defined a high-quality iron ore project of global significance that will generate substantial financial returns and position Sundance as a key player in the international iron ore space.
"In a very short amount of time we have defined a premium high-quality iron ore resource and completed a feasibility study that validates this as a technically and economically viable project with robust margins and long mine life.
Mr Casello said Sundance would focus on securing final approvals as rapidly as possibly to commence construction later this year.
First production from the first stage of Mbalam is forecast for the last quarter of 2014.
At 11:27AM (WST) Sundance shares had slipped 1 per cent, to trade at 48 cents.
