independent expert report indian iron ore, page-2

Its a sell imo, project seems very small & very early stage with granting of licences being very slow, market needs alot more work & info:



1. EXECUTIVE SUMMARY
1.1 The five project areas are located in areas of active high grade haematite open pit mines.
None has yet involved any significant exploration or assessment expenditures. Two are
assessed as currently worthy of closer investigation.
1.2 The Bellary project area in particular is located in an area of high grade low impurity mines,
with production grades of at least 64 per cent iron and very low silica, alumina, phosphorus
and sulphur levels.
1.3 Ownership of the iron ore operating mines is widely diverse. The Bellary district has
involved at least 143 mainly very small open pit mining areas, averaging 220 hectares in size.
1.4 The Bellary project appears to offer the potential for a minimum of 200,000 tonnes of float
ore, otherwise known as scree, at a grade of 65 per cent iron and higher tonnages of reef ore
of uncertain grade.
1.5 Infrastructure facilities are poor. The transport of ore to export ports is mainly in maximum
13 tonne payload trucks, via roads partly in very poor condition.
1.6 Verbal advice has been received that the mine gate price currently paid for 63 per cent iron
ore fines is the equivalent of approximately A$77 per tonne.
1.7 The float ore appears to indicate a potential pre-tax operating cash surplus of at least A$12
million over an initial two year period from commencement of operations.
1.8 All five areas are at the AML (registered Application for Mining Lease) stage.
1.9 The processing of mining lease applications in Karnataka is extremely slow. For the latest
available annual reporting period, 40 leases were granted from a total of 1216 applications.
1.10 For the possibility of proving and developing the target Bellary district open pit iron ore
project, the main risks assessed are the absence of any JORC Code mineral resources, the
likely permitting delay, the contingency of future environmental constraints and medium term
iron ore price risk, if a protracted period is involved in permitting.