Admiralty Resources (ASX: ADY) has completed the a Pre-Feasibility Study (PFS) for its Mariposa magnetite iron ore project in Chile, confirming that it is economically viable, technically feasible and environmentally sound.
Key takeaways include a 49.1% post-tax internal rate of return, a 2.25 year payback on a $65.5 million capital investment.
This is based on a Resource of 66.6 million tonnes at 35.6% iron using a cut-off of 25% iron that provides for a 12 year Life of Mine and operational cost for final product CFR China ports of $89.10 per tonne.
Mariposa also has a post-tax Net Present Value (NPV) of $211 million at a 8% discount rate at World Bank forecasted long-term iron prices with an average of $141/tonne1 of the final product at 62% iron.
The PFS was completed by Redco Mining Consultants (REDCO) over the project. It also found that changing the parameters to use a current prevailing iron ore price of $128.50/tonne CFR China still yielded an attractive IRR of 41.37%, a 2.5 year payback and a post-tax NPV of $148 million.
“We are extremely pleased with the results of the Mariposa Pre-Feasibility Study,” chairman Ross Harper said.
“The study has highlighted the robust economics of the project and encourages the company in the expansion of its resources and the development of full-scale mining and processing across its Harper South district.”
Admiralty believes there is potential upside to the current PFS which may be improved following the results of further detailed metallurgical testing currently underway and the refining of the processing plant, resulting in lower feed grades, greater mineral resources available for processing and greater life of mine.