Juno Minerals is reviewing its tendered contracts as market sentiment continues to soar in the iron ore sector. Pic via Getty Images
Juno Minerals updating financials as iron price gets even hotter
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- Juno starts a review of tendered contracts on the Mount Mason DSO hematite project
- The review announced in its December quarterly report comes as iron ore futures surge on buoyed confidence in the Chinese economy
- Exploration continues at Mount Mason as well as its Mount Ida project
Special Report: Surging iron ore prices have sparked a review of Juno Minerals’ financial model for its near-term Mount Mason hematite project in Western Australia.
With the high-grade direct shipping ore (DSO) project fully permitted for development and DSO export capacity available at the Esperance Port, Juno Minerals (ASX:JNO) has re-engaged with past tenderers to provide updated pricing as it positions itself pending favourable market conditions.
The aim of the exercise is to refresh the financial model and facilitate hedging arrangements as soon as reasonably possible, the company has said in its December quarterly report.
Speeding up development, cutting opex
To complete the logistics supply chain for Mount Mason, JNO received from Arc Infrastructure last year non-binding indicative track pricing for 1.35mtpa access into Esperance Port from a new rail siding 7km from Menzies in WA’s Goldfields region.
The company originally planned to develop the siding from the project’s start, which would have significantly reduced operating costs by cutting road haul distance while increasing rail transport.
But because of the improving iron ore price, the strategy has been revised to truck to Kalgoorlie initially for loading on to rail. This will speed up the process to develop the project and start production. Importantly, It will also cut required start-up capital.
Under this scenario, the Yunndaga rail siding will be progressed once cashflows have been established from operations.
Iron ore futures, currently at US$135.55/t, received a boost from China’s central bank predicting a cut in the reserve requirement ratio for banks within the next two weeks.
Direct Shipping Ore Marketing
Alongside Argonaut and its financial advisors, JNO has also started a process with major metal traders in selling Mount Mason DSO with the requirement of offering potential debt finance and securing hedging while the iron ore price is right.
With production planned at 1.35mtpa – lower than the majors – secured hedging is needed to ensure continued and profitable operations.
Progress continues at Mount Ida, too
Meanwhile, at the large Mount Ida magnetite project, Juno has started a process to attract a substantial partner to earn-in at the asset level, with capacity to complete a feasibility study, permitting requirements and ultimately development
In the Mount Ida project area, Phase 2 drilling is under way on both the Northern and Southern lithium soil anomalies after ranked priority areas were evaluated on the ground by JNO’s consulting senior geologist.
Extended soil sampling also begun on the balance of JNO’s mining lease tenure on Mount Ida and Mount Mason, in parallel with the drill program.
The exploration began late last year after JNO boosted its coffers by $3.6 million from an entitlement offer.
This article was developed in collaboration with Juno Minerals, 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.
