IRON ore-hopeful Polaris Metals has completed a pre-feasibility study for the development of a 2.5 million tonne operation at the Carina deposit.
The 2.5Mtpa figure would be stage 1 of its Yilgarn iron ore project in Western Australia, and would have a capital cost, including rolling stock, of $A120-130 million.
Operating costs were estimated at $60-70 per tonne.
The Yilgarn project could then ramp up to 5-10Mtpa as resources at the four other prospects are established.
The study estimated the project would have a net present value of more than $100 million, at a 10% discount rate, which allows for further fuel price increases.
A feed of 20Mt grading 57% was used in the study, giving an initial mine life of eight years from the initial targeted production start-up date of late 2010.
Ore mined at Carina will be trucked to a new siding on the Trans Australia rail line and railed to the Fremantle Port Authority’s Kwinana operation.
The inferred mineral resource for the Carina, J4 and J5 deposits is 30.4Mt at 58.1% iron.
Polaris said drilling will begin in August to upgrade the resource category at Carina, and the company would undertake geotechnical, metallurgical and hydrological studies.
The company is continuing with optimisation studies to identify the preferred option for rail and port infrastructure, to be completed in the fourth quarter of 2008.
Independent consultant Prodemas, which completed the pre-feasibility study, has recommended that Polaris proceed to a bankable feasibility study.
Polaris said the decision to proceed to a BFS will be made when the optimisation studies have been completed, but the BFS is expected to begin in late 2008 and completed in mid 2009.
Shares in Polaris were down 0.5c to 37.5c this morning.
POL Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
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