Ann: Wonarah Enabling Study Confirms Economic Pot, page-4

re: Ann: Wonarah Enabling Study Confirms Econ... Here is a cut and paste from proactive investors website who appear to have converted the pdf and added a few comments of their own.

"Minemakers (ASX: MAK) has released an independent study showing economic potential for the company’s Wonarah deposit and proposed fertiliser production facility, as well it will resume talks with NMDC on a JV in December.

The study, completed by independent fertiliser industry consultants KEMWorks, and financial analysis from Optimum Capital, showed net present values of about $2 billion and reasonable rates of return.

Minemakers plans to develop a processing facility to produce superphosphoric acid or N-P fertilisers such as diammonium phosphate.

This enabling study focused on two processes for producing phosphate; the improved hard process and the wet acid process.

It indicated that the improved hard process could produce 1.4 million tonnes per annum of 70% superphosphoric acid, while the conventional wet acid process would produce 2 million tonnes per annum of monoammonium and diammonium phosphate.

Importantly, this study shows that the expenditure required for a full Bankable Feasibility Study (BFS) is justified.

This is expected to begin upon completion of a joint venture agreement with India’s largest mining company NMDC, with negotiations to resume in early December.

The two development options examined in the enabling study require the mining of 6-7 million tonnes per annum, with larger operations or the production of additional commercial output to be examined in the BFS.

One aspect to be examined in the BFS is the economic impact of Minemakers constructing its own ammonia plant using the gas supply available at Tennant Creek.

This could increase capital expenditure but reduce operating costs and insulate the project from variances in ammonia prices.

The possibility of producing exportable beneficiated phosphate rock from slurried material will also be investigated.

Wonarah Project

Wonarah has a large phosphate mineralisation base, estimated at about 800 million tonnes at beneficiation plant grade and open along strike.

An 82 hole drilling program carried out earlier this year increased Indicated and Inferred resources at Wonarah.

Indicated Resources increased to 303 million tonnes at 18.2% phosphate, from 289 million tonnes at 18.5% phosphate, while Inferred Resources reached 479 million tonnes at 18% phosphate, up from 331 million tonnes from 17% phosphate.

The project is strategically located in the Georgina Basin with strong supporting infrastructure and less than 300 kilometres from the north-south Darwin-Adelaide standard gauge railway.

Wonarah also benefits from significant Traditional Owner, Central Land Council and Northern Territory Government support.

Rising rock phosphate prices and NMDC

Rock phosphate prices have risen throughout 2011. Prices of phosphate rock stood at $197.5 per tonne in September, unchanged for a second consecutive month after posting a 41 percent increase from January to July.

This would not have escaped the attention of India's NMDC as it has said it is on the lookout for acquisitions in Australia. The resumption of talks with NMDC in December are extremely bullish for Minemakers with the economic study under its belt.

NMDC recently announced a plan to become a cornerstone investor in Legacy Iron Ore (ASX: LCY).
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