Australian resources and investment company, Cape Lambert Resources Limited announce the results of its updated Scoping Study for its 100% owned Marampa iron ore project located in Sierra Leone, West Africa.
Highlight
1. Updated scoping study for a standalone, open pit mining development at Marampa to produce 10 million tonne per annum of high grade iron ore concentrate now complete.
2. Metallurgical testwork confirms iron recovery ≥90% achievable to produce a high grade concentrate typically ≥65% Fe with low levels of contaminants.
3. Stage 1 production planned at 2 million tonne per annum, expanding to 10 million tonne per annum within two years in Stage 2 resulting in a 22 year mine life.
4. Stage 1 capital investment estimated at USD 458 million and Stage 2 estimated at USD 1,051 million.
5. Stage 1 operating costs estimated at USD 45 per tonne of concentrate Free on Board with an average life of mine operating cost of USD 52 per tonne of concentrate FOB.
6. Updated scoping study has returned robust financial metrics including an un geared after tax NPV10% of USD 1 billion an internal rate of return of 34% and after tax cash flows of USD 2.9 billion.
7. Given Marampa strong financial metrics, Cape Lambert has commenced the process of an initial public offering on London’s AIM market, with the appointment of several key advisors. The admission to AIM is expected to be completed by the end of 2011.
The Updated Scoping Study which evaluates an increase in Marampa proposed production rate from 5 million tonne per annum to 10 million tonne per annum of hematite concentrate, was prepared by independent, engineering group Bateman Engineering Pty Ltd with contributions from supporting specialist consultants.
The Updated Scoping Study is based on establishing a standalone open pit mining operation with a wet, high intensity magnetic separation concentrator and associated infrastructure initially at a production rate of 2 million tonne per annum of high grade hematite concentrate expanding to a 10 million tonne per annum within two years.
Metallurgical testwork undertaken for the Updated Scoping Study on representative composite samples from the Matukia, Gafal and Rotret deposits has shown that high iron recoveries and mass yields are achievable to produce a high quality hematite concentrate typically grading 63% to 67% Fe with low levels of silica, alumina.
The Updated Scoping Study is based on a Stage 1 production rate of 2 million tonne per annum, in line with rail and port access provided through an agreement with African Minerals Limited. African Minerals is currently refurbishing the rail line from Marampa to the ship loading facility at Pepel which is expected to be operational later this year. The Updated Scoping Study proposes that production at Marampa will then be expanded to 10 million tonne per annum by 2016 through a second port to be constructed at Tagrin.
The Updated Scoping Study was based on exploiting the 680 million tonne JORC compliant mineral resource and showed that 82% of the resource can be mined to produce high grade hematite concentrate over a 22 year mine life. Mining in Stage 1 is proposed to focus on the shallow, soft, higher grade, oxide material which provides for lower FOB operating costs in the early years of operation.
Mr Tony Sage Executive Chairman of Cape Lambert Resources said “I am extremely pleased at the outcome of the updated scoping study, which has shown what we have known from the start, that Marampa is a robust project that can deliver benefits for our shareholders, external stakeholders and our hosts the government of Sierra Leone.”
He further added “now that the updated scoping study is complete, Cape Lambert has commenced the process for an AIM listing of Marampa with the appointment of a number of key advisors and a search is underway for a London based CEO.”
