LABRADOR – Vancouver-based Alderon Iron Ore Corp. has received the updated preliminary economic assessment for the Rose deposit at the Kamistiatusset (Kami) iron ore property 10 km from Wabush. The company sees the iron and steel market strengthening after several years of weakness, and in light of the closure of the nearby Wabush mine, decided this is an opportune time to re-scope the project.
The new PEA proposes a 29-month construction period, followed by an annual production rate of 7.8 million tonnes of 65.2% iron concentrate over a 24-year mine life. Total estimated capital cost (excluding sustaining capital) will be US$897.5 million.
The Kami project carries a net present value (8% discount) of US$1.38 billion and an internal rate of return of 23.8%. The payback period will be 3.9 years.
Core from the Kami iron ore project.
Alderon said the PEA replaces the feasibility study assembled in 2012. Some sections of the PEA – geology, exploration, drilling, sampling, data verification, and the resource estimated – are unchanged. However, other aspects have been re-scoped. The company now hopes to build its concentrator between the Scully mine and old concentrator, taking advantage of the tailings management area at the closed mine. Alderon has yet to obtain tailings permits or access to the Scully property.
The Kami project is owned 75% by Alderon and 25% by Hesteel Group, China’s second largest steel producer.
More information is available at www.AlderonIronOre.com.