Creasy-backed CZR looks to leverage booming iron ore price with Pilbara project next to Rio
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Emerging Pilbara iron ore producer CZR Resources (CZR) is looking to offer investors maximum leverage to the booming price for the steel-making ingredient, pushing ahead with its project development plan at full speed.
With major deposits located at both ends of Rio Tinto’s Mesa F project, CZR, which has legendary prospector Mark Creasy as its biggest shareholder with a 55 per cent stake, offers investors two potential ways of making money: project development and/or a takeover bid.
CZR’s strategy to create value for shareholders took a major step forward this week, with the company securing Mining Licences for both its deposits.
The all-important licences pave the way for CZR to mine Robe Mesa and mean the company can now focus on completion of the updated Reserve estimate and the Definitive Feasibility Study.
CZR Managing Director Stefan Murphy told Resources Rising Stars that the company was now targeting an annal production rate of 3.5Mtpa, up from 2Mtpa in the pre-feasibility study.
The full interview with Mr Murphy can be viewed at https://www.resourcesrisingstars.com.au/rrs-tv
He said CZR was also aiming to reduce costs from those contained in the PFS by establishing a port facility at Ashburton rather using the Utah Point port at Port Hedland. Ashburton is just 170km from Robe Mesa while Utah Point is 450km away.
“Haulage accounts for about 40 per cent of our costs so being able to reduce our haulage by more than 50 per cent makes a significant difference,” Mr Murphy said. “It allows us to lower our cost base and increase our Reserves.”
He said CZR’s recent acquisition of the P529 deposit from FMG, combined with its existing Robe Mesa deposit, meant CZR now “book-ended” Rio’s Mesa F deposit.
“We are about to start infill drilling P529 and ultimately incorporate that into our mine plan down the track,” Mr Murphy said.
“That goes to our strategy of increasing the mine life and increasing the production rate.”
Mr Murphy said he expected the updated mine plan and pit designs to be completed within four to six weeks. These would then form part of the DFS.
“We are aiming to get our operating costs down to around A$55/t FOB,” he said. “So we are hoping to drive a lot of value in CZR by significantly increasing our reserves at Robe Mesa.
“We will then be able to add our growth strategy at P529 and look at having a long-term mining operation.”
This article was developed in collaboration with CZR Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.