Old news: ~ the $9m initial investment to earn-in 30% of the Mount Bevan IO project announcement was released to the market on the 15th November 2021. Hancock Prospecting 30% / Legacy Iron 42% (Backed by India's largest IO producer NMDC) / Hawthorn Resources 28% https://www.asx.com.au/asxpdf/20211115/pdf/452z6mft4w85vz.pdf
The difference: Mount Bevan 1,170 Mt @ 34.9% Fe ~ magnetite ~ typically lower Fe but lower impurities ~ needs treatment, typically ends at > 62% Fe fines Hamersley 343m/t @55% Fe ~ DID & CID ~ low FE (by what grade is sort, steel mills are now sourcing higher grades to reduce furnace firing costs) will need treatment to lower the impurities.
The advantage: Hamersley: has 42.6m/t of Indicated Resource, the rest being inferred ~ infill drilling program will be targeted to raise confidence of inferred. Mount Bevan: has a high in ground percentage of SiO2 but this is removed with treatment, magnetite iron ore resources are lower grade in the ground, they can be concentrated into a higher-grade product ~ 62% Fe, add the low impurities, SiO2 removal at treatment and this is why the steel mills prefer this.
The misconception: re: "Hamersley Iron Ore Project 343mt @ 55% Fe which is set to grow" ~ Equinox currently do not have any plans or do they have the ability (tenement restriction) to expand (or grow) the resource note 1 they are currently planning an infill drilling program to increase the confidence of the current resource. They are in discussions with a number of potential drilling contractors with the capabilities to conduct the program, targeted for Q2, 2022, as per the Company's Project Update announcement ..... https://hotcopper.com.au/threads/ann-project-update.6454892/
Note 1: from the Independent Geologist Report (Mark Gifford) for Equinox's Prospectus. ~ "The author believes there is only limited opportunity for the expansion of the known Mineral Resource Estimate. Project work would be expected to be concentrated on planning and development and raising the confidence level in the resource estimate and physical / metallurgical properties to aide in the planning, scheduling and marketing process." ~ Looking at figure 3 (Geologist Report from the prospectus) and aligning it with the diagram of EQN proposed drilling campaign, it is pretty much where Gifford indicated where the best spot was BUT the company needed to appoint a geologist consulting firm (CSA Global) to tell them that again?
Iron Ore Price: Yep, you have that right, an increase of 40% since the low in November, current price for Fe ~ 62% fine (benchmark price) is USD$129.49m/t, but the FE ~ % for Hamersley IMO will best get to, Fe~58% - which is currently USD$88m/t - from previous Company announcement, the viability of Hamersley needs the Iron Ore price to be stable above USD$100m/t. Previous reports also indicate there may be further price discounting for Hamersley higher impurities but that is what the metallurgical testing during the drill campaign is for.
Most analysts are still predicting the Iron Ore price to come down but have revised their forecasts, consensus for the first half of 2022 USD$122 with most maintaining the second half predictions between USD$75 - USD$95m/t. It is the longer forecast/prices (2023/4) that will have relevance to Equinox with (again) analysts mixed with predictions, USD$109m/t - 2023 (Trading Economics) USD$77m/t 2022 & USD$66m/t 2023 (S&P Global)
cheers
EQN Price at posting:
24.0¢ Sentiment: None Disclosure: Not Held
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