Scoping Study
Promet Engineers Pty Ltd (Promet) was engaged to carry out the original Scoping Study to assess the viability of the Project. Promet used bulk samples to conduct bench scale concentration of the sand using magnetic separation techniques. Based on a 55% Fe concentrate Promet examined five different technologies and using the existing Bluescope Steel SLRN kiln technology the study concluded that the Project appears to be very robust. At a pig iron price of US$300/tonne the Project has an NPV of US$566 million and an IRR of 22.0% with net operating cash flows of US$140 million per annum based on an operating cost of US$149/tonne for a one (1) million tonne per year plant. The plant is estimated to cost US$582 million.
The NPV is post tax, unlevered and discounted at 10%.
With a significant opportunity to increase the size of the resource, NPVs have also been estimated for two larger scenarios of two and three million tonne per annum output and the various liquid iron prices.
The Scoping Study identified several more cost effective options for developing the Project, including the production of marketable concentrates and an alternative hot metal processing technology from Outotec. These alternatives have the potential to significantly improve the economics of the Project and will be evaluated as part of the ongoing BFS.
URS Australia has completed an Initial Environmental and Social Scoping Study that identified no unmanageable community or environmental issues with the development of the Project. URS indicated that there was potential for the land reclamation processes to see improved productivity of the mined out areas compared to the existing land form, and the proposed waste stream management would assist in minimising the Project's environmental impact.
