THE BOURSE WHISPERER: The synergy between resources and infrastructure has been highlighted by the approval of new railway projects in both of the country’s major mining jurisdictions.

Aquila Resources announced it has received conditional approval from the Western Australian Minister for the Environment for the construction and operation of mining and associated infrastructure, including a rail line to transport ore to port, for the West Pilbara iron ore project, in which the company holds a 50 per cent interest.

The Environmental Minister’s approval follows the Federal Department of Sustainability, Environment, Water, Population and Communities’ recent conditional approval for the project.

“The project participants have advised that they accept the conditions imposed by the Minister,” Aquila Resources said in its ASX announcement.

“These two approvals allow the various decision making authorities within the Western Australian government to consider, and if deemed appropriate, approve submissions for the development and operation of facilities for the mine site and the proposed 282 kilometre railway to Anketell Port.”

Aquila said that besides both Federal and State Departments with responsibility for the environment are considering the proposed development of Anketell Port, an Environmental Protection Authority Report is expected to be received in early 2012.

The company said Ministerial approvals are anticipated in the second quarter of 2012.

Mine and Rail locations. Source: Aquila company announcement

Over in Queensland the State Government has approved the development scheme for the Surat Basin Infrastructure Corridor State Development Area.

This area contains the route for the Surat Basin Rail link to the Port of Gladstone via the existing QR Network Moura rail line.

According to an ASX release from Stanmore Coal, the Queensland Government has previously identified this rail line to be critical as it will allow new mines to open in the Surat Basin by enabling them to export of coal from the Port of Gladstone.

The Surat Basin Rail Joint Venture is working under an exclusive mandate granted by the Queensland Government to develop the project as an open access coal and freight railway.

Stanmore Coal said granting this key Government approval will allow the SBR joint venture to move to land acquisition and construction, which the company said it understands to be scheduled to commence in late 2012 with first coal on rail due in 2015.

“We are very pleased to see this key approval milestone achieved which clears the way for the construction of the Surat Basin Rail,” Stanmore Coal managing director Nick Jorss said in the company’s announcement to the Australian Securities Exchange.

“This is an important event for The Range, our five million tonnes per annum export thermal coal project, which remains on track to commence construction in 2013 and deliver coal two years later.”

Stanmore Coal said it has applied for five million tonnes of capacity on the SBR to deliver high quality export thermal coal from The Range project from 2015 onwards.

The company’s Range project is located in the north of the Surat Basin some 27 kilometres south east of the planned SBR line.

Stanmore Coal has also obtained seven million tonnes per annum of priority capacity rights at the proposed Wiggins Island Coal Export Coal Terminal Stage 2 at Gladstone.

The company said it understands capacity at SBR and WICET 2 is due to be allocated shortly, in advance of planned financial close of both projects in mid-2012.

THE BOURSE WHISPERER: Aquila Steel SA, a wholly owned subsidiary of ASX-listed Aquila Resources, has completed a Definitive Feasibility Study for the Gravenhage manganese project situated in the north of its Avontuur prospecting right in the Kalahari region of South Africa.

Aquila said it considers the project to hold potentialfor the discovery of high-grade manganese mineralisation.

The company continues to explore on the farms to the south of Gravenhage, focusing on high-grade manganese mineralisation that has been discovered at the Haakdoorn prospect.

Haakdoorn Prospect – Drilling and Manganese Mineralisation. Source: Company announcement

The DFS proposes a 1.5 million tonnes per annum run of mine opencut operation, with subsequent underground mining producing oxide manganese ore over a total mine life of 17 years, inclusive of the initial ramp-up in production, with exports to commence in 2015 through Port Elizabeth.

The Gravenhage project is located in the Northern Cape Province of South Africa.

Aquila holds a 74 per cent interest in the project, with the remaining 26 per cent held by South African Black Economic Empowerment company, Rakana Consolidated Mines.

“Mined ore will be crushed and screened to produce 1.125 million tonnes per annum of lumpy ore for export and 330 kilo tonnes per annum of fine ore for supply to domestic sinter plants,” Aquila Resources said in its ASX announcement.

“While fine ore will be trucked directly to sinter plants located in the Kalahari manganese field, the lumpy ore will be trucked to a rail siding near Hotazel where it will be loaded on to trains for haulage initially to Port Elizabeth in 2015 and ultimately to new port facilities at either Saldanha Bay or Coega.

“The major target market is China, where ferro-alloy producers have expressed strong interest in evaluating the Gravenhage ores.”

According to the DFS the project can be developed for an initial capital cost of US$179.9 million, utilising January 2012 terms.

This includes provision for a contingency of 11.4 per cent of direct capital cost.

Additional capital for underground development will not be incurred until 2018, which is the 4th scheduled year of production.

With the completion of the mine plan for the project, Aquila said a maiden Reserve Statement has been developed.

This has identified 20.2 million tonnes of Proven and Probable Reserves (JORC) across the proposed open pit and the underground mines.

The company said that due to the pit’s Resource classification, there remains an inventory of 2.6 million tonnes of material within the pit boundaries.

THE BOURSE WHISPERER: NuCoal Resources has secured port allocation with Port Waratah Coal Services for the company’s 100 per cent-owned Doyles Creek Underground coal project.

The company said the allocation will provide it with one million tonnes of capacity per year at the port commencing in 2015.

The commencement of the allocation ties in with the company’s current project production schedule.

NuCoal has indicated that it will be participating in future allocation nominations for capacity at Port Waratah.

The Doyles Creek Project is located approximately 110kms via rail from the Port of Newcastle. Source: Company announcement.

These future allocations will be necessary in order for the company to secure the remaining tonnages it will require in accordance with the production profile that was determined at the completion of a Pre-Feasibility Study.

NuCoal currently forecasts average annual coal production to emerge from the Doyles Creek Underground Mine and Training School to be five million tonnes per annum.

“This is another significant milestone for NuCoal as it continues to de-risk the Doyles Creek Underground coal project,” NuCoal Resources managing director Glen Lewis said in the company’s announcement to the Australian Securities Exchange.

“This includes the Australian first Underground Coal Mine Training School proposal and progresses the significant high quality semi soft coking and thermal coal resource closer to development.”

THE BOURSE WHISPERER: Australia Minerals and Mining Group, through its wholly-owned subsidiary Yilgarn Iron, has signed a further memorandum of understanding (MOU) with Queensland-based Anhui Lianghuai Resources, the wholly owned subsidiary of the Anhui Provincial Bureau of Coal and Geology.
 
Both parties signed an earlier MOU in August 2011 relating to the development of the AMMG Yilgarn iron ore projects.

The new MOU includes AMMG’s recently acquired Southdown Extension iron ore project, located approximately 80 kilometres from the Albany Port.

The signing of the further MOU is a result of a number of visits by AMMG to Anhui’s head office in Hefei and a number of visits by Anhui to AMMG’s projects in Western Australia.

AMMG said the new MOU provides both parties with a framework they can build on together over the upcoming months to determine whether agreement can be reached on the terms of a direct capital investment by way of a share placement by Anhui in AMMG or its subsidiary, Yilgarn Iron.

The second MOU targets a potential Heads of Agreement for a Joint Venture Agreement for the development of one or more of Yilgarn Iron’s projects.

Yilgarn iron ore project Location Map. Source: Company announcement 

AMMG, through Yilgarn Iron, has been actively exploring and extending its tenement base in the Yilgarn Craton, accumulating 13 projects extending over 3,184 square kilometres.

“The further MOU demonstrated that Anhui recognised the mineral potential of the company’s projects and was particularly interested in the close proximity of the project to the port and city of Albany, being only approximately 80 kilometres away,” AMMG managing director Ric Dawson said n the company’s announcement to the Australian Securities Exchange.

“With drilling at the Southdown Extension project scheduled to commence at the beginning of next calendar year, Anhui were particularly interested in this recent addition to the Yilgarn Iron project portfolio.

“Anhui plans to send a delegation to return to Western Australia at the time of drilling for a site inspection as part of their ongoing due diligence ahead of any possible future involvement in advancement of the MOU key targets.”

THE BOURSE WHISPERER: Royal Resources has completed the sale of the Warriedar Iron Ore Joint Venture (WIOJV) to Gindalbie Metals.

Gindalbie’s offer for Royal’s 40 per cent interest in the WIOJV had originally been for a consideration of $8 million cash.

The offer was for all of Royal’s holdings in the area of the WIOJV ground, inclusive of Royal’s residual 40 per cent interest in the Warriedar Gold Joint Venture (WGJV).

A spanner was thrown into the works of the transaction by Minjar Gold, the holder of a 60 per cent interest in the WGJV.

Minjar subsequently decided to exercise its pre-emptive right over Royal’s interest for a consideration of $1 million cash, which reduced Gindalbie’s payment to $7 million.

Minjar’s buy-out of the WGJV is yet to be completed.

Royal said the completion of the transaction had been delayed as it awaited legal advice in regard to Minjar’s claim that it had a pre-emptive right over the WIOJV as well.

Senior counsels have advised both Royal and Gindalbie that Minjar’s claim is without merit.

“This asset disposal will allow Royal to focus on advancing our flagship Razorback iron project in South Australia,” Royal resources managing director Marcus Flis said in the company’s announcement to the Australian Securities Exchange.

Royal Resources Razorback location. Source: Company web site 

Royal owns 100 per cent of the Razorback iron ore project, which is a magnetite deposit located 240 kilometres from Adelaide.

The project has an exploration target size of 4,800 million tonnes to 8,000 Million tonnes at grades of 18 per cent to 45 per cent iron.

The Razorback project is divided into two sub-projects: the northern Red Dragon project, and the southern Pualco project.

Collectively, the two areas cover over 1,450 square kilometres of exploration tenement through either outright ownership or an exclusive option over the iron rights.