Ferrex, the AIM-quoted iron ore and manganese development company focused in Africa, is pleased to announce that a desktop study for operations and associated costs has highlighted that significant potential exists for low operating costs at its 309 km2 Mebaga direct shipping ore (DSO) iron ore project in northern Gabon.
Two operational scenarios have been identified, including a 1 Mtpa scenario with production costs of $45/t Fe and 3 Mtpa scenario of $41/t Fe, included as part of desktop order of magnitude study. An independent assessment of the DSO material from Mebaga also indicated it should command a premium over the 62% iron benchmark price, which currently sits at $95/t.
Ferrex MD Dave Reeves said, “We are very encouraged by the results of this desktop study which, with a FOB cost of between $41/t and $45/t for both operational scenarios, demonstrates the significant potential for low operating costs at Mebaga.
“Importantly independent marketing agents have confirmed that Mebaga’s ore, which has low levels of silica, alumina and phosphorous, should be sold at a premium to the 62% iron benchmark price. When the low capex estimations are coupled with a premium benchmark DSO price and the fact that we will utilise a large amount of existing infrastructure, the potential returns for Mebaga look very exciting.
“We are now focussed on closing a new funding option for the project and intend to commence drilling in the next dry season December 2014/ January 2015. This drill programme will be followed by a more in-depth Scoping Study that will investigate the operating costs in more detail and define the capital costs associated with the project. We look forward to reporting on these developments in due course.”
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