Surefire confirms Perenjori as low-cost, high-grade iron project
Link copied to
Early studies have indicated that Surefire’s Perenjori iron project in Western Australia could be developed as a low-cost operation producing a premium, high-grade magnetite concentrate.
A scoping study has confirmed the economic viability of Surefire Resources’ (ASX:SRN) Perenjori iron ore project, providing the company with the confidence to advance the project.
Importantly, the study shows a clear pathway to meeting Surefire’s internal rate of return hurdle for development, the company told investors today.
“Technical assessment has already indicated the ore can produce a high-grade magnetic concentrate that is attractive to the market,” managing director Vladimir Nikolaenko said.
“This first-pass preliminary economic assessment has now provided the board with confidence that the Perenjori iron project is commercially attractive. Surefire can now confidently plan to move the project forward.”
The scoping study is based on an inferred magnetite resource of 191.7 million tonnes at 36.6 per cent iron and an iron ore price that Surefire considers conservative that included a premium for high-grade magnetite concentrate.
There are two main types of iron ores – hematite and magnetite. Hematite is a higher grade in the ground, while magnetite deposits are large and quite low grade – but produce very high-grade products.
Mid-last month, Surefire kicked off a production study to see if Perenjori could produce a 67.5 per cent iron concentrate – a grade not even heavyweights like BHP (ASX:BHP) are producing.
It is not that hard to upgrade magnetite to a higher-grade material using the industry standard magnetic separation – basically you just grind the material and place it under a big magnet that captures the magnetite in a concentrate. And these deposits usually have a very long life.
Test work showed Surefire could achieve an 85 per cent yield from Perenjori ore by using standard crushing and two-pass grinding followed by magnetic separation.
A key factor that will make it a low capital outlay project is Perenjori’s proximity to rail, port, labour, water and power.
The Perenjori project sits within about 15km of both the Morawa-Perenjori trunk rail line and the Karara rail spur. The rail distance to Geraldton port is roughly 219km.
The project is also located within 8km of the Three Springs-Golden Grove electricity transmission line and is surrounded by several towns that could supply the labour force to build the mine.
Surefire plans to add to the resource inventory at Perenjori. A recent review indicated the potential to expand the resource beyond 500 million tonnes.
This article was developed in collaboration with Surefire 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.