Cazaly Resources yesterday revealed “robust economics” for its Parker Range iron ore project in the Yilgarn region of Western Australia, following the completion of a pre-feasibility study.
According to the company, the project can be ramped up to full production of four million tonnes per annum within one-and-a-half years, thanks to its close proximity to existing and accessible infrastructure.
“These positive results now allow for the commencement of a definitive feasibility study into the project, the initial phase of which will incorporate a bridging programme of further metallurgical work,” the company said.
Cazaly will become the region’s second major iron producer once the project is operational, after Cliffs Natural Resources’ Koolyanobbing Operations.
The study suggested that the project, producing fines only, could be effectively operated by the company or a contractor.
If Cazaly decided to hire a contractor to operate the project, it would cost $78 million in capital expenditure over the first two years and a further $26 million in year three.
If the company decided to operate the project, expenditure would balloon out to $148 million in the first two years.
The contractor-operated expenditure would take less than a year to repay, while the self-operated costs would take more than 18 months to repay.
In a report from AAP, one of the company’s co-managing directors, Nathan MacMahon, said his counterpart Clive Jones would travel to Asia next week to find an investment partner for the project.