From The Oz.Points of note”# Author: CAMERON DRUMMOND. If...

From The Oz.

Points of note”

# Author: CAMERON DRUMMOND. If related? I whish him all the best.

# Type of deals in WA I/O. 60% above goings would uply to RHK because the current SP is not representative of it’s true valu.

# Res MIN’s Read Hill deal paying $200m upfrnt and $200m at first shipment is interesting.

We have discussed this before. A further point is tha Res Min started developing the three area of the project, Port, road and mine at the same time and when the final proposal was signed before the contract.

# 56-58% I/O is still in demand even if unsuitable to market by RHK at the moment.

# We’ve discased Simandou, it’s not considered a threat to the Pilbara. Historically steelworks have used blends.

Good luck

Paydays await with these DSO iron ore juniors are crushing it

Sometimes it's not just dirt

By CAMERON DRUMMOND

8:40AM JUNE 11, 2024

Iron ore explorers have had some big successes in proving up deposits over the years – usually catching the eyes of nearby operations for major paydays.

BHP (ASX:BHP), Hancock Prospecting, Fortescue Metals (ASX:FMG) and Chinese investors have all snapped up iron ore discoveries across WA over the years and there’s nothing to signal that changing lately.

For instance, Red Hill Minerals (ASX:RHI) sold its 40 per cent interest in the Red Hill Iron Ore JV to emerging major MinRes (ASX:MIN) for $200 million, a figure which recently doubled to $400 million after the latter shipped first ore out of Ashburton last month.

Another example is Mark Creasy-backed CZR Resources’ (ASX:CZR) proposed sale of the 33Mt Robe Mesa iron ore deposit to a Chinese investor for $102 million cash – an about 60 per cent premium to the market cap.

The sale has been approved by shareholders, although it’s yet to clear FIRB (Foreign Investment Review Board) and Chinese outbound investment approvals.

However, the $20 million sale to a linked entity of Strike Resources (ASX:SRK) at the nearby Paulsens East project, which was meant to share port infrastructure in Ashburton with CZR, suggests it’s still on the cards.

If it goes through, the cash sale is around 60 per cent higher than CZR’s current market cap and probably puts dividends on the table.

Equinox Resources (ASX:EQN) could well follow in the footsteps of these juniors with its Hamersley DSO iron ore project.

DSO and quick production pathways

DSO (direct shipping ore) projects offer a clear value proposition for those engaged with small to mid-caps.

The straightforward cost analysis of DSO iron ore is attractive as its simplicity translates to a shorter time between the mine and steel mills across the world, appealing to producers and end-users alike.

That’s because the deposits require nothing other than the basic mechanical processes of crushing and screening ore to prepare it for export – no complicated and higher-cost beneficiation or treatment necessary.

Hamersley shines for Equinox

Coming earlier this month at an upgraded 108.5Mt @ 58 per cent Fe, the Hamersley hematite DSO iron ore project is comparable in grade to other Pilbara products such as the Robe River fines, FMG Blend fines and Super Specials fines which are widely traded under the Platts 58 per cent Fines Index.

The size of it makes it one of Australia’s largest undeveloped hematite resources owned by an ASX junior and the deposit sits just about 30km south of FMG’s Solomon Mining Hub, which produces around 65-70mtpa @ 56.9 per cent Fe.

It also sits on a mining lease with a native title agreement in place and “could be rapidly developed against the backdrop of a high iron ore price environment”, EQN says.

Hamersley’s DSO ore starts just 20m below surface and has been delineated over a 2.5km x 1.5km area with open-pit mining prospectivity to the south to boot.

Metallurgical test work also shows that, through post-screening and scrubbing, the iron grades overall can increase to about 60-62 per cent Fe, which would attract a price premium, supported by recent standout drill hole PLRC0167, which ended in mineralisation of 61.6 per cent Fe.

Although impressed with the latest results, EQN isn’t quite satisfied just yet and is looking at a phased approach to improve the confidence and expand the current resource base, with infill drilling and a 27-hole RC drill campaign to explore southward on the cards.

“Our Phase 1 drilling program for the second half of CY2024 is set to unlock this higher-grade region, further enhancing the resource volume and grade,” EQN MD Zac Komur says.

“These efforts will pave the way for a comprehensive scoping study.”

Echoes of Pilbara in Guinea?

Could history repeat itself in Africa’s potential Pilbara 2.0?

David Flanagan – who is no stranger to iron ore after leading the charge for Atlas Iron in the 2000s – has returned to the bulk commodity with Arrow Minerals (ASX:AMD), looking to prove up the Simandou North project in Guinea.

Flanagan feels there’s another Pilbara in West Africa – specifically with nearology to the multi-billion dollar, 4.6Bt @ >65 per cent Fe Simandou project being developed by Rio Tinto (ASX:RIO) and a host of Chinese JV partners.

An eye-whopping $US27 billion in infrastructure is being constructed, including a dual-track railway line connecting pit to port. Over its mine life, Simandou, even at conservative prices, could be worth trillions.

For AMD, it’s all about the surroundings that have been vastly underexplored due to price volatility and historical political instability, kicking off drilling in the hopes of adding Simandou North as an early actor into what could become a significant iron ore district.

5069m has been completed across a 15km campaign that is on track to be completed next month.

About 40km strike of the highly prospective Simandou banded iron formation, has been mapped on the Arrow tenure and six rigs are on site testing DSO targets.

Jumping east across to Madagascar and ASX junior AKORA Resources (ASX:AKO) has its own DSO iron ore deposit to contend with over in Madagascar, where it’s just increased the Bekisopa project’s MRE by 42 per cent to 7.9Mt @ 58.8 per cent Fe.

The results will be incorporated into planned updated scoping and preliminary feasibility studies along the identified 7km-long strike length.

“The increase in shallow DSO tonnage fromBekisopa is expected to increase the Stage 1 mine life of our plannedat-surface DSO mine and further improve project