Alien Metals Ltd (LSE:UFO) said an initial independent Scoping Study for the Hancock iron ore project has shown “exceptionally” strong returns are possible from a potential development.
The initial study showed that the current resource of 10.4 million tonnes will sustain an eight-year mine life, based on a mining rate of 1.25 million tonnes per year (Mtpa), and a pre-production capital estimate of less than US$30mln (GBP22mln).
The AIM-quoted company also reported that strip ratios were exceptionally low, about 1:1 on the Ridges deposits, and that operating costs are estimated to be below US$60 a tonne on a Free on Board (FOB) basis.
“We could not be more pleased with progress on the Hancock iron ore project to date,” said chief executive Bill Brodie Good.
“Having delivered a meaningful resource so quickly, and to follow up with a very compelling mine development scenario from the independent Scoping Study, we are now working aggressively in the development, mining and permitting arena to keep the momentum up and get this project into production within a very short timeframe.”
Alien has started planning the next stages of development and appointed an experienced iron ore operations manager to begin the permitting process.
“We are really fortunate to have Lloyd Edmunds join the team and retain Mining Plus for the development phase,” said Brodie Good. “With Lloyd’s background in project delivery at Australia’s number 3 iron ore miner, Fortescue Metals Group (ASX:FMG), he is a key appointment for Alien Metals.”
The company is also in the final stages of planning the next phase of drilling, which is targeting extensions to the Ridges resources, where substantial resource growth potential exists.
Alien said it is looking at off-take options and, now that it has a mineral resource estimate, it will be able to talk with several parties on possible options for developing the project.
Last month, Alien announced a maiden resource estimate for the project.
READ: Alien Metals reveals maiden inferred resource of 10.4Mt for Hancock iron ore project
