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GBG 1.90 +0.230 +13.77% 1,217,547 shares $2,373,722 @ 03-Sep 10:50:00 AM
Two ASX ann today
03/09/2007 Hematite Resource and Reserve Update
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00755485
FURTHER UPGRADE TO MUNGADA HEMATITE RESOURCE AND ORE RESERVE ESTIMATION
KEY POINTS
• Further 19% increase in indicated and Inferred Resources for Mungada Hematite Project to 27.1 million tonnes grading 61.7% Fe.
• Metallurgical testwork, geotechnical drilling and pit optimisation design all completed with favourable results.
• Production inventory contains Probable Reserve and Inferred Resources totaling 14.3mt grading 61.5% Fe.
03/09/2007 Magnetite BFS Media Release
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00755484
GINDALBIE DELIVERS POSITIVE BANKABLE FEASIBILITY
STUDY FOR A$1.6 BILLION KARARA IRON ORE PROJECT
Western Australian iron ore group Gindalbie Metals Ltd (ASX: GBG) has laid the foundations for the development of a world-class iron ore business with its 50/50 Chinese Joint Venture partner, Anshan Iron & Steel Group Corporation (Ansteel), after today announcing the completion of a positive Bankable Feasibility Study (BFS) for a proposed A$1.6 billion development of the Karara Magnetite Project in WA’s Mid West region.
Gindalbie advised today (Monday) that it had completed the BFS on schedule, confirming the technical and financial viability of a long-life iron ore project which is expected to generate substantial returns for the joint venture partners and deliver significant benefits to the region and the State of Western Australia. The Karara Magnetite Project is located 225km east of the Port of Geraldton.
The BFS concluded that, based on a JORC compliant Ore Resource of 1.43 billion tonnes at 36.3% Fe and an initial Ore Reserve defined as part of the study of 497 million tonnes at 36.3% Fe, the Karara Magnetite Project
would generate an initial after tax free cash flow of A$9.3 billion from the first 25 years of operations and an indicative annual cash surplus after tax of A$360 million. The Project has a Net Present Value using a 9% discount rate of A$2.3 billion and an Internal Rate of Return (IRR) of 24.6%.
The BFS is based on a 20Mtpa mining operation producing on average 8Mtpa of magnetite concentrate grading 68.2% Fe and 4.7% SiO2, with the initial 497 Mt Ore Reserve sufficient to underpin 25 years of production at the
proposed ‘start up’ production rate. The substantial size of the resource (1.43 billion tonnes) – with 929 million tonnes at 36.3% Fe of Indicated and Inferred Resources outside of the initial pit design – and the scope for further
resource additions, reinforces the potential for production to be increased significantly above this level.
“Ansteel has expressed its desire to expand production from Karara to meet its own growth requirements at its new steel-making facilities in China, and we therefore view the BFS as very much a base case for what we envisage will in time become a much larger project,” said Gindalbie’s Managing Director, Mr Garret Dixon.
The decision to use rail as the product transport mode in the BFS has been made by the joint venture participants on the basis that they are likely to expand the production rate at Karara in the future, as this provides a fully
scalable option with only incremental transport capital required. However, concentrate transport using a slurry pipeline remains a viable option while final negotiations on rail transport are concluded.
Magnetite concentrate from Karara will be shipped to China via a process involving transportation on barges to a location off Geraldton for loading to a trans-shipper and ultimately onto Capesize vessels which will freight the
high-grade iron ore concentrate to the port of Yingkou in China, for use in the joint venture pellet plant and directly in Ansteel’s new steel mill.