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DJ Aquila Confirms Viability Of US$3.9B Iron Ore Project06/05/2008 09:44AM AEST
MELBOURNE (Dow Jones)--Aquila Resources Ltd. (AQA.AU) said a pre-feasibility study has confirmed the viability of its iron ore project in the Pilbara region of Western Australia with the estimated cost of the development put at US$3.9 billion.

The Perth-based company said the study had found the mine would have operating costs of under US$20 per metric ton at a production rate of 25 million tons a year and that it is capable of producing 30 million tons a year in its first phase with a marginal increase in capital expenditure.

Aquila said the project would have annual earnings before interest, tax depreciation and amortization of US$1.3 billion at a production rate of 30 million tons a year and using expected 2008 contract prices.

The study recommended construction of 160 kilometers of new rail to a new deep water port facility at Cape Preston and Aquila said that, subject to approvals, construction could start in the first quarter of 2010 with first shipments in 2012.

Aquila also announced Tuesday a one-for-five bonus issue of shares to existing holders for no consideration, aimed at encouraging greater liquidity in the stock.