CuFe has its eyes on its prey, eyeing off resumption of mining at its JWD deposit. Pic via Getty Images.
CuFe ready to pounce on iron ore turnaround with JWD fines shipment as Yarram tracks for Maiden Resource
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As market conditions turn positive for iron ore, CuFe (ASX:CUF) has flagged the potential resumption of mining next year at its JWD deposit as it made its first sale of fines from the Mid West iron ore mine.
A 14,000wmt shipment of fines from JWD has been sold to a Chinese customer in a blend with the nearby C4 mine on the back of a rise in iron ore prices and fall in discounts for lower grade material in China, home to almost 60% of the world’s steelmaking capacity.
It follows a major reversal of fortune in the iron ore market, with prices for benchmark 62% Fe product rising over 30% in a month after dropping below US$80/t in October.
The run to over US$100/t has vindicated the words of CuFe (ASX:CUF) executive director Mark Hancock, who had told shareholders the iron ore market tends to turn quickly.
“I commented in our last ASX release about how I have seen many times before that iron ore prices rebound quickly once sentiment turns in China and that is playing out again here with the 62% price below $80 at the end of October and above US$107 on Friday, this is approaching the levels required to make mining at JWD attractive and we continue to stay ready to respond.”
CuFe also plans to sell two parcels of high grade lump material, the main type of iron ore sold from the mine to date thanks to its premium status, totaling ~35,000wmt also in C4 blended cargos.
To ensure a margin, one of the three parcels has been sold at a fixed price of US$106/dmt, with 25,000t of swaps entered into at an average price of uS$102.50/dmt on a 62% Fe basis.
From trash to treasure
Discussions with contractors have begun on a recommencement of full operations in January if iron ore prices continue to rise, as key plant is still on site and blasted stock is in the pit, facilitating a rapid ramp up.
But a trial to recover high grade material from discrete portions of the JWD waste dump has been completed successfully, demonstrating CUF’s potential to recover ~15,000wmt per month from this source at lower cost than mining new material in the pit.
CuFe (ASX:CUF) is becoming more bullish also on its 50% owned Yarram iron ore project, 110km from the Port of Darwin.
Assays from a recent drilling program reported in October have been received and will be tied in with historical drilling from previous project owner Territory Iron, some of which has included thick intersections containing in excess of premium 65% Fe grades.
CUF says it has intersected high grade extensions along strike from known mineralisation and has enough along with a detailed aerial LIDAR survey completed last month to build a maiden resource, which is planned for release in early 2023.
“The team continues to be busy on multiple fronts, continuing to ship tonnes from JWD and working on innovative ways to reduce costs. At Yarram we are now working to interpret the recent drilling to prepare a JORC resource, examining opportunity to take advantage of shallow low grade material and progressing heritage and environmental studies,” Hancock said.
Bolstered Board
CuFe has also announced the appointment of Scott Meacock as a non-executive director as of today.
A lawyer by trade, Meacock has a wealth of experience as external counsel acting in, and advising on, complex corporate and commercial law transactions and disputes for clients in a wide range of industry sectors including natural resources and financial services.
He is currently the CEO and general counsel of the Gold Valley Group, CUF’s major shareholder and 50% JV partner in the Yarram iron ore project.
“I am pleased to welcome Scott to the Board and look forward to working with him,” CuFe executive chairman Tony Sage said.
“As Mark has noted there is a lot happening in both the iron and copper parts of the business and with a positive outlook for both commodities we expect 2023 to be a good year for CuFe.”
This article was developed in collaboration with CuFe (ASX:CUF), 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.
