IOH accepts positive Buckland Feasibility results

THE DRILL SERGEANT: Iron Ore Holdings (ASX: IOH) has completed a Feasibility Study for the company’s Buckland project in Western Australia.

 

Buckland project location. Source: Company announcement

 

Based on the FS results, IOH has declared the project business case to be technically viable and commercially attractive.

The Buckland project comprises a new mine, road and port development.

The mine is to be developed at the Bungaroo South iron ore deposits, where a JORC Ore Reserve of 134 million tonnes will underpin eight million tonnes per annum (dry) production for more than 15 years.

A new 196 kilometre sealed haul road is to be constructed from the mine to a new IOH managed transhipping port with a 20Mtpa capacity at Cape Preston East (CPE) on the north-western Pilbara coast.

The FS report estimates that the Buckland Project would have a Net Present Value (NPV) of approx. $990 million pre-tax on an ungeared basis, a pre-tax internal rate of return (IRR) of 24 per cent and an average annual EBITDA of approx. $260 million.

It is estimated that more than $1 billion will be paid in WA State Royalties during the life of the Buckland project.

IOH indicated potential also exists for further financial upside through a range of initiatives, including value engineering studies to optimise capital and operating cost estimates, the development of Buckland satellite deposits, tolling of third parties’ product on IOH haul roads and port facilities, as well as IOH purchasing ore on a ‘mine gate’ or ‘port gate’ basis.

Subject to funding being secured, IOH said a potential construction start in the fourth quarter of calendar year 2014 could be achieved, leading to a potential production start by the third quarter of CY2016.

“The IOH Board has endorsed this positive Buckland project feasibility study and approved IOH progressing activities towards the project investment stage,” Iron Ore Holdings managing director Alwyn Vorster said in the company’s announcement to the Australian Securities Exchange.

“IOH’s key focus will now be on advancing equity and debt funding solutions, exploring the opportunities for further project upside and then making a final decision on developing this independent mine to ship supply chain solution.”

Email: info@ironoreholdings.com

Website: www.ironoreholdings.com