Carpentaria confident it has the best iron ore product in the right place at the right time
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Since March, iron ore prices have broken the $200/tonne mark, and the Office of the Chief Economist has flagged that iron ore export values have risen from $103 billion to $149 billion in FY21.
And while the price is expected to slow down in late 2021, it’s unlikely to fall below $100/tonne until late in 2022 before averaging out to around $90/tonne in 2023.
Carpentaria Resources (ASX:CAP) executive chairman Bryan Granzien is confident the outlook for iron ore will hold strong as the company gets the bankable feasibility study (BFS) underway for its Hawsons project near Broken Hill in NSW.
“The product is clearly one of the best in the world, the project is ranked as one of the best undeveloped iron ore mines in the world, and with iron ore prices at record levels and the outlook very strong for that to continue, it’s a great time to bring this project forward,” he said.
What makes this project special?
“It’s special in that the product itself is special,” Granzien said.
“It’s got a lot going for it – it’s a great product at 70% iron ore – and no one else in the world does that.
“So, we have a product that’s going to be top of the tree in terms of iron content, and also it has the appeal for green steel and ESG, because it’s very low in impurities.
“And because it’s quite a unique ore, it’s very soft and much easier to process and that’s why our operating costs are competitive with the majors.”
Tell me ausbout the capital raising for the BFS?
“We’ve just announced we’ve secured $35.6 million in funding for the bankable feasibility study,” Granzien said.
“This is via an underwritten placement of 54.3 million shares, and a 1-for-2.6 underwritten entitlement offer of 183 million shares.
“Whilst the money is not in the bank yet, we’re very confident it will be by the end of July.
“We’ve now got a clear path towards the BFS, and we’re fully funded to complete drilling, the demonstration plant run and engineering and design.”
When are you targeting production?
“Our schedule currently targets start-up production of 10 million tonnes per annum in 2024 and we think that’s achievable,” Granzien said.
“We want to ensure that we get a quality BFS that presents a compelling case to raise the US$1.4 billion we need to build the mine.
“But you almost couldn’t be picking a better place in the world to be developing a project.
“It’s in a unique location near Broken Hill so all the infrastructure is pretty much already in place, we need to build the mine but all the logistics, supply chain – it’s in a mining region and close to a mining town – with a lot of skilled resources there.”
What are your offtake plans?
“We had a contract with Mitsui & Co., Ltd. for 2 million tonnes which lapsed at the back end of last year, however we’re back in negotiations with them now,” he said.
“We’ve run a process with a lot of other offtakers, and we’ve got very strong support for the product.
“From our point of view, now that we’ve raised the capital, we don’t need offtake funding for the BFS so, it puts us in a very strong position that we can have those discussions further down the track towards production – rather than at a very early part of the cycle – to get full value for our shareholders.”