Iron Ore Holdings conceptualises Bungaroo South
THE BOURSE WHISPERER: SRK has completed a Mine Concept Study, on time and within budget, for Iron Ore Holdings on the Bungaroo South project.
The Bungaroo South channel iron deposit currently contains a 241 million tonnes JORC Resource of average 57.2% iron grade and is one of IOH’s largest identified deposits.
Bungaroo South lies within IOH’s Western Hub on its Buckland Hills tenement approximately 45km south east of Pannawonica and 35km from existing Robe rail infrastructure
It is also just 50 km from the proposed Australian Premium Iron (API) joint venture’s planned rail infrastructure to Anketell port.
The study did not identify any material matters that would prevent an economic mining operation from being developed at Bungaroo South while highlighting technical and financial synergies for both IOH and API should the IOH deposit be co-developed with the adjoining API deposit.
The study determined a two staged mine development process was the most appropriate course of action, allowing for the Western IOH deposit to be developed first due to relatively simple and cost effective surface water management initiatives that will be required.
Development of the Eastern IOH deposit could occur following or during the development of the Western IOH deposit.
Optimum extraction of ore, efficient water management and cost savings are possible if the Eastern IOH deposit is mined in conjunction with the API deposit.
The Study indicated a mine life of 15 years at a rate of 15 million tonnes of ore per annum at peak production to be feasible both technically and financially.
SRK recommended that further pre-feasibility study level work be undertaken to develop increased accuracy and confidence in the groundwater and geotechnical parameters, and to define the most suitable transport solution to link with existing infrastructure.
The company has accepted the study’s finding that an environmental approval process of at least two years is likely, making approvals the critical path towards potential production in 2015.
However, this timeline is in line with the estimated commissioning timeline of the Anketell port facilities.
“This positive Mine Concept Study confirms our internal view that a sizeable mine project is feasible at Bungaroo South and IOH will now consider taking the project into the next stage of pre-feasibility study activities to decrease risk and add value to the commercial options,” Iron Ore Holdings managing director Alwyn Vorster said in a statement.
“IOH will also continue engagement with the state government and Dampier Port Authority on securing future capacity at Anketell Port.
“IOH has now established two projects, Iron Valley in the Central Pilbara and Bungaroo South in the Western Pilbara, both with a Resource of ~240Mt, which can be independently developed into 15 million tonnes per year operations.”