Finally a roar from the silence
IRONCLAD MINING LIMITED [IFE]
These plans are iron clad and bulletproof
Monday, 2 July 2012
THE plans for IronClad Mining’s South Australian projects are big – and getting bigger. By Andrew Mole - RESOURCESTOCKS*
IronClad managing director Wayne Richards says the company’s core message is really quite simple: get into production, establish the supply chain and utilise the cashflow to expand the business.
He says IronClad will be in a class of its own when it comes to junior iron ore miners in South Australia – although it doesn’t plan to stay in the junior ranks for too long.
That’s because IronClad is running a truly independent operation – from mine to ship – giving it the ability to manage its supply chain and shipping with no third parties, competitors or owner/operators of key infrastructure having a say.
Ironclad is in control of its own destiny and Richards said that would be the foundation of its aggressive growth strategy.
He said the first two years of production from the project had already been contracted for sale to international steel mills under comprehensive sales and marketing agreements.
“Additionally, 50 per cent of year three and four’s forecast production has been contracted for sale through an off-take agreement with Hong Kong-based company New Page Investments Limited,” Richards said.
“Stage one of the project involves production of 1 million tonnes per annum of direct shipping ore magnetite, increasing to 2Mt in the project’s second year of operation.
“Ore will be transported via road from the mine to the company’s port facilities at Lucky Bay, near Cowell, on South Australia’s Spencer Gulf, before being exported via trans-shipments to ships anchored in Spencer Gulf.
“Stage two involves a further increase in production to 4-5Mt of iron ore by combining Wilcherry Hill magnetite concentrate with the DSO product.
“And stage three includes the exploration and development of the joint venture’s Hercules project, 15km southeast of Wilcherry Hill, which has an inferred and indicated JORC classification of 198Mt and is expected to increase output from Ironclad’s operations to 10-12Mt by 2015.”
The offshore loading will be a first for South Australia.
Ironclad’s growth plans could potentially upgrade this system to incorporate the innovative concept of a floating harbour, with suitable holding warehouses for the ore, both on land and at sea. Cape-sized vessels with 150,000t capacity could then be loaded with iron ore from the floating harbour, which Richards said would potentially be owned and operated by Ironclad.
Ironclad has an agreement with Sea Transport Development SA for full access rights to the designated 50 hectare port site at Lucky Bay, where it will store and ship iron ore from its Wilcherry Hill and Hercules projects.
It also has a 50-year lease to this facility and the accompanying land within the 50ha site.
Richards said stage three of the project would look at a potential combination of rail and road transportation, or a slurry pipeline for the magnetite concentrate.
A prefeasibility study on the Hercules project is scheduled to start shortly.
“Our goal is to turn Ironclad into an ASX200 company and build from there,” Richards said.
“It sounds like a big ask but we have found the dirt, we have an end-to-end supply chain and your first project is always the hardest.
“Once that goes into production, the next projects come a little more easily.
“And so will expansion at Lucky Bay – it can be easily upgraded and has a low-capital cost requirement. We are not talking about a $A2 billion Pilbara port here, we can crank it up to 2 million tonnes-plus for $8-10 million.
“We are most appreciative of the South Australian government’s expeditious approval of our development application for another vital piece of SA mining infrastructure.
“This port facility will provide an important export point, not only for Ironclad but for other potential mining companies and exporters in the region.
“Further, the facility will provide an economic and viable export option, in a timely manner, for the development of our projects, and will stimulate economic growth and employment opportunities within the area.”
Ironclad has an 80:20 joint venture with Trafford Resources at Wilcherry Hill, which covers 976sq.km.
But Richards said the big development in the Ironclad portfolio was Hercules.
He said Ironclad would “really build its business around” the Hercules project.
And when it comes to building a big business, the man at the helm of Ironclad really knows his stuff.
With more than 25 years experience in the mining and mineral processing industry, Richards has an extensive background in the development and operation of nickel/cobalt and iron ore operations.
He was managing director of Brockman Resources and fulfilled senior executive roles within BHP Billiton’s iron ore division.
While running Brockman Resources, he structured and grew the Marillana iron ore project from a market capitalisation of $30 million to almost $1 billion in just four years and against the backdrop of the 2008 global financial crisis.
“Once we get the cashflow running at Ironclad with the first mine going into full production we will be looking to expand, either organically or via acquisitions, mergers or JV arrangements to grow our business,” Richards said.
“From there the goal of becoming part of the ASX200 is not unrealistic.
“We have shown it can be done at projects such as Brockman and there is no reason we cannot repeat that here.
“The first ore will be on a ship and sailing within two quarters and while we might not be the biggest mine in the country, IronClad has a quality team in control.
“Even our plans to rapidly expand the capacity at port from 60-70,000 tonne Panamax vessels to Cape size and their 150,000 tonnes shows where we are going.
“Right down to doing all the tidal surveys and depth assessments for ships.
“But the take-home message here is we are in complete charge of where we go from here.”
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