Alien Metals provides Hancock Iron Ore scoping study update

Highlights

• The initial independent scoping study for the Hancock Iron Ore Project has demonstrated exceptionally strong returns are possible from a potential development.
• Optimisations completed using an iron ore price of US$100/t result in the design pits extracting all of the initial JORC resources identified to date (10.4 million t at 60.4% iron [Fe]).
• Initial life of mine studies show the current resource will sustain an eight-year life based on the following parameters:
  • Mining rate of 1.25 million tpy with a pre-production capital estimate of
  • Exceptionally low strip ratios (approximately 1:1 on the Ridges deposits).
  • Operating costs of <US$60/t FOB. 
• Given the exceptional results from the scoping study, the company has begun planning the next stages of development with the appointment of a highly experienced iron ore operations manager to commence the permitting process.
• The company is also in the final stages of planning the next phase of drilling, which is targeting extensions to the Ridges resources, where substantial resource growth potential exists.

Bill Brodie Good, CEO and Technical Director of Alien Metals, commented: “We could not be more pleased with progress on the Hancock Iron Ore Project to date. Having delivered a meaningful resource so quickly, and to follow up with a very compelling mine development scenario from the independent scoping study, we are now working aggressively in the development, mining and permitting arena to keep the momentum up and get this project into production within a very short timeframe.

“We are really fortunate to have Lloyd Edmunds join the team and retain Mining Plus for the development phase. With Lloyd's background in project delivery at Australia's number three iron ore miner, Fortescue Metals Group (FMG), he is a key appointment for Alien Metals.”

Significantly, with the initial analysis of the samples, the iron ore appears to be a high-quality product with very little adverse deleterious minerals that would affect its appeal and usability.

The average grade of the DSO grade ore from the Western Ridges to date is around 61.5 % Fe and with the current volume of 2.6 million t, it currently contains over two years' initial mining material and is recommended as the initial ore to mine.

An updated discounted cashflow analysis using very recent analogous costs where required, but also up to date costs available, returns an >US$60/t free on board from extraction at site to delivery to the Port Hedland Public Ore Terminal, including government royalties.

Such a project is an extremely low CAPEX one as it does not require any type of on-site fixed plant nor railway or port requirement to begin mining. The mining method would probably entail using surface mining machines such as those already used by FMG very effectively already and would require minimal screening and crushing. Should this be required, it would be done by a mobile unit right at the mine face and then, for delivery of the ore, road transport would be a suitable and highly economic method. Contract mining and ore transport would be the preferred option to further reduce CAPEX requirements for the project.

The project is only 20 km from the iron ore town of Newman so other than a small central office on site no camp would be required to be built. Contract mining and transport would be recommended as well again to negate any CAPEX to purchase equipment and support infrastructure to go with it (maintenance facilities etc.). The main CAPEX would be for putting in a suitable road between the mine face and the Great Northern Highway to the west of the tenement but once installed would need minimum maintenance. This would be in the region of half the projected CAPEX and based on current mine planning and current iron ore prices would be paid back in less than 6 months into the mining cycle.

Alien is also looking at off-take options as a way of securing the potential of the project and the feasibility of the project and will, now that an MRE is present, be able to talk in earnest with several parties on possible options for developing the project.

With the improved understanding of the DSO bearing horizon and the large extent of untested highly prospective ridges remaining, Alien plans to target these specific horizons in the next drilling programme, Phase 3, with the plan to increase both the size of the initial resource as well as the confidence.

Read the article online at: https://www.globalminingreview.com/exploration-development/19102021/alien-metals-provides-hancock-iron-ore-scoping-study-update/