THE BOURSE WHISPERER: Mount Gibson Iron (ASX: MGX) is to acquire the Shine hematite iron project from Gindalbie Metals (ASX: GBG).
The Shine project is located approximately 250 kilometres east of Geraldton in the Mid West region of Western Australia, some 85km north-north west of Mount Gibson’s Extension Hill iron ore mine, and around 200km by road from the company’s rail siding at Mullewa, from which it presently rails ore from its Tallering Peak mine.
Shine iron ore project – proximity to infrastructure and Mount Gibson assets. Source: Company announcement
Mount Gibson said it considers Shine has potential for near term low-capex development that can partly offset the scheduled closure of the company’s Tallering Peak mine in the second half of 2014, at which point it will have available rail and port capacity in the Mid West.
Gindalbie has completed exploration and feasibility activities at the project, including the securing of key regulatory approvals needed to proceed with development, including mining, heritage and environmental approvals.
Gindalbie has also previously reported a Measured, Indicated and Inferred hematite Mineral Resource totalling 6.1 million tonnes grading an average of 59.8 per cent iron for the Shine project.
“Building our hematite iron resources in the Mid West is a key priority for Mount Gibson and this represents a low-cost near term development opportunity that fits perfectly with our strategy,” Mount Gibson Iron chief executive officer Jim Beyer said in the company’s announcement to the Australian Securities Exchange.
“Given the advanced nature of the Shine project, its proximity to our existing operations and availability of existing infrastructure capacity as production from Tallering Peak winds down in the coming year, we will be looking to advance to development as quickly as possible.”