Admiralty Resources study yields positive project economics for Mariposa magnetite project
Admiralty Resources (ASX: ADY) has completed the a Pre-Feasibility Study (PFS)
for its Mariposa magnetite iron ore project in Chile, confirming that it is
economically viable, technically feasible and environmentally sound.
Key takeaways include a 49.1% post-tax internal rate of return, a 2.25 year
payback on a $65.5 million capital investment.
This is based on a Resource of 66.6 million tonnes at 35.6% iron using a
cut-off of 25% iron that provides for a 12 year Life of Mine and operational
cost for final product CFR China ports of $89.10 per tonne.
Mariposa also has a post-tax Net Present Value (NPV) of $211 million at a 8%
discount rate at World Bank forecasted long-term iron prices with an average of
$141/tonne1 of the final product at 62% iron.
The PFS was completed by Redco Mining Consultants (REDCO) over the project. It
also found that changing the parameters to use a current prevailing iron ore
price of $128.50/tonne CFR China still yielded an attractive IRR of 41.37%, a
2.5 year payback and a post-tax NPV of $148 million.
“We are extremely pleased with the results of the Mariposa Pre-Feasibility
Study,” chairman Ross Harper said.
“The study has highlighted the robust economics of the project and encourages the company in the expansion of its resources and the development of full-scale mining and processing across its Harper South district.”
Analysis
The Pre-Feasibility Study highlights the attractiveness of Admiralty’s Mariposa
magnetite iron ore project even after the parameters are altered to use current
iron ore prices.
The study provides concrete metrics of the project economics of Mariposa and
would encourage further expansion of its resources and the development of
full-scale mining and processing across its Harper South district. It also
places the project on track for production to start in 2014-2015.
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