Fe Limited is poised to cement its place as Australia’s newest iron ore producer with the start of haulage operations at its JWD project near Wiluna.

The first trucks left Wiluna yesterday for Geraldton Port with the fleet dedicated to the task of round-the-clock haulage ramping up progressively over the coming weeks.

Loading of the first shipment of direct shipping ore (DSO) iron ore from JWD is targeted for the second half of August, which will in turn mark the start of cash flow for the company.

Fe Limited (ASX:FEL) has a 51% interest in JWD, which will produce a high-grade, low-impurity iron ore product with a resource of 10.7 million tonnes grading 63.7%.

“It’s great to see the trucks starting to roll out of the JWD mine. Mining and crushing operations have ramped up well so the team are now focused on ensuring the same happens with haulage as we build towards our first shipment,” executive chairman Tony Sage said.

The start of iron ore haulage comes barely a week after the company executed the contract with David Campbell Transport, which provides haulage for at least 1,200 tonnes per day, or about 60% of the intended initial JWD volumes.

Under the Port Access and Services agreement with Geraldton Port, Fe can in-load and out-load 800,000 tonnes per annum of JWD product.

fe limited jwd lump iron ore
Road train being loaded with lump material at JWD. Pic: Supplied

JWD iron ore project

Fe acquired a 51% interest in JWD in September last year and subsequently secured a three-month option in late May 2021 to increase its equity up to 60% by paying $2.5m in cash or shares, of which $1m has already been paid as a deposit for the option.

JWD – also known as the Wiluna West JWD deposit – is part of the wider Wiluna West project and is a low capital cost, DSO iron ore development with about 65% of the material presenting as high-value lump ore.

Lump ore typically commands a premium over the benchmark iron ore fines price.

The narrow ore body allows the company to use a mining fleet that is more typical of the gold sector while the outcropping ore with distinct ore-waste contact allows for visual management of ore dilution.

First stage development consists of a test pit from which Fe has the right to extract up to 300,000t of ore.

From here, the company has the option to pay $4.25m to move to the second stage, which allows a further 2.7Mt of ore to be extracted.

It can also opt to mine any remaining economically recoverable ore from the project under the third stage by paying GWR a $3.50/t fee.

 

 

 

This article was developed in collaboration with Fe Limited, 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.