Venus waits on Oakajee port to deliver iron-ore project

Mon,August29, 2011
By Esmarie Swanepoel

PERTH - ASX-listed minerals explorer Venus Metals has estimated a net present value of some A$2.14-billion for its Yalgoo iron-ore project, in Western Australia, with an internal rate of return of some 37%, based on a 7.5-million-ton-a-year production capacity.

A feasibility study on the Yalgoo project has estimated a capital development cost of around A$1.2-billion, with the project dependent on the development of the Oakajee port.

The Yalgoo iron-ore project consists of seven exploration licences totaling 208 km2 over the Yilgarn Craton Archaean banded iron formation.

The prefeasibility study, which was recently completed, was based on a production of 7.5-million tons a year of high-grade magnetite concentrate, grading more than 68% iron, specifically aimed for the export market.

The concentrate production rate was based on a mineable ore resource to give the mine a life expectancy of around 15 years. The project has a total magnetite mineral resource of 698-million tons, grading 29.3% iron.

Venus said that the mining report into the Yalgoo project had estimated a total economic magnetite concentrate production of some 129.4-million tons, based on 385-million tons of plant feed, at 30.1% iron. Based on the projected concentrate production, this equated to a mine life in excess of 17 years.

The explorer told shareholders that it was likely that the Yalgoo project could exceed this life expectancy, given that only a small part of the company’s tenement area has been explored.

Venus, in conjunction with its joint venture partner Shandong Provincial Bureau of Geology and Minerals, now planned to advance the development of the Yalgoo iron-ore project, and would undertake further drilling and mineralogy assessments, as well as continue investigations into water supply, and undertake activities to support the approvals process.

The partners would also look to develop offtake agreements for the Yalgoo products.

(sourced MiningWeekly)