Macarthur Minerals Limited ASX: MIO) has vowed to push ahead on the Feasibility Study for its Lake Giles Iron Project in Western Australia, despite strong economic headwinds caused by the coronavirus crisis.
Macarthur’s Executive Chairman, Cameron McCall, said the company’s business case remained strong despite recent turbulence and would be strengthened in the near term.
“Investor confidence across the board has taken a hit lately but we’re confident that the Company is close to receiving a major shot in the arm on the back of an updated resource estimate and how we will get this to market,” Mr McCall said.
“On a macro-level, there are supportive market fundamentals that remain resolute; global steel production continues to rise and so does the demand for higher grade, lower-impurity iron ore feedstock such as magnetite.
While the prices of most major commodities are wilting in the face of the coronavirus, iron ore has been resilient with the benchmark 62% Fe product hovering around a relatively robust $US90 per tonne, that’s up from $US72 in November last year.
“Lower oil prices, lower shipping rates between China and Australia as well as a declining Australian to United States dollar should see a rapid rebalancing as all these variables impact positively on corporate returns”.
Mr McCall said there have been plenty of project positives recently.
XRF assays and David Tube Recovery (DTR) analysis from the infill drilling programme completed at the end of 2019 have confirmed significant intersections of magnetite mineralisation. These results are now being incorporated into an updated mineral resource model currently being prepared by CSA Global.
Meanwhile, detailed ‘route to market’ studies including port and rail designs have commenced and remain a key priority. These studies will form the background of rail access, haulage and port contracts.
Tenders have also been called for metallurgical testing, process and infrastructure design, and mining studies to support a detailed Feasibility Study.
The Lake Giles Iron Project mineral resources include the Ularring hematite resource (approved for development) comprising Indicated resources of 54.5 million tonnes at 47.2% Fe and Inferred resources of 26 million tonnes at 45.4% Fe; and the Moonshine magnetite resource of 710 million tonnes (Inferred).
