Equatorial Resources releases positive scoping study results for Mayoko-Moussondji project

THE BOURSE WHISPERER: Equatorial Resources (ASX: EQX) has released the results of a recently-completed Scoping Study for the company’s 100 per cent-owned Mayoko-Moussondji iron project, located in the south-west of the Republic of Congo.

Equatorial has a three stage development plan for Mayoko-Moussondji and says the Scoping Study has focused on optimising the feasibility of the project for an initial 2 million tonne per annum hematite based operation (Stage 1 and Stage 2).

Key Scoping Study results for Stage 1 and Stage 2 include:

–    An initial Mine Life 23 years;

–    A production target profile (steady state Stage 2) of 2 million tonnes per annum;

–    Capital cost to initial production of US$114 million;

–    Total capital cost (mine, rail, and port) of US$231 million;

–    Operating costs (LOM average cash costs Free On Board (FOB)) US$41 per tonne;

–    Product quality 64 per cent iron Mayoko Premium Fines; and

–    A timeline to initial production of 15 months from Final Investment Decision.

“The Scoping Study has identified an immediate pathway to a two million tonne per annum hematite mining operation producing a premium product transported by the existing railway and port facilities,” Equatorial Resources managing director and CEO John Welborn said in the company’s announcement to the Australian Securities Exchange.

“The study demonstrates that our project has a number of advantages: the potential for a high-quality product, low capital requirements, competitive operational costs, and a short timeframe to production based on access to existing rail and port infrastructure.

“These advantages, and the potential for future expansion, make Mayoko-Moussondji a stand-out development opportunity.”

The company indicated it plans to produce a Mayoko Premium Fines iron product grading 64.1 per cent iron from the project, commencing at 500,000 tonnes per annum during Stage 1 and ramping up within 18 months to two million tonnes per annum during Stage 2.

Based on the initial Hematite Resource the operating life of mine is estimated at 23 years.

The first six years of mining are based on indicated mineral resource (representing 25 per cent of the total mineral resource inventory), with the remainder being inferred material.

Operating cash costs are expected to average US$41 per tonne FOB Pointe-Noire over the life of the mine.

The initial capital expenditure required for first production has been estimated at US$114 million.

The total capital cost required to achieve 2Mtpa is estimated at US$231 million.

The total capital cost could be reduced through leasing arrangements on rolling stock, improvements in tailings management and through partnership opportunities with neighbouring company Exxaro Resources.