Scoping Study delivers compelling development case for the Hancock Iron Ore Project
Follow the link to view the announcement in full including all figures:
http://www.rns-pdf.londonstockexchange.com/rns/4517P_1-2021-10-18.pdf
Alien Metals Ltd (LSE AIM:UFO), a global minerals exploration and development company, is pleased to update the market on the Hancock Iron Ore Project Scoping Study.
Highlights
· The initial independent Scoping Study for the Hancock Iron Ore Project has demonstrated exceptionally strong returns are possible from a potential development
· Optimisations completed using an iron ore price of US$100/t result in the design pits extracting all of the initial JORC resources identified to date (10.4Mt @ 60.4% Fe)
· Initial Life of Mine studies show the current resource will sustain an 8-year life based on the following parameters:
o Mining rate of 1.25Mtpa with a pre-production capital estimate of <US$30m
o Exceptionally low strip ratios (c.1:1 on the Ridges deposits)
o Operating costs of <US$60/t FOB
· Given the exceptional results from the Scoping Study, the Company has begun planning the next stages of development with the appointment of a highly experienced iron ore operations manager to commence the permitting process
· 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
Bill Brodie Good, CEO & Technical Director of Alien Metals, commented:
“We could not be more pleased with progress on the Hancock Iron Ore Project to date. 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.
“We are really fortunate to have Lloyd Edmunds join the team and retain Mining Plus for the development phase. With Lloyd’s background in project delivery at Australia’s number 3 iron ore miner, Fortescue Metals Group (“FMG”), he is a key appointment for Alien Metals.”
Figure 1 shows the location of the Hancock Project and Table 1 shows the mineral resource statement. The Hancock Project (E47/3954) is approximately 10 km north of Newman in the prolific iron ore producing Pilbara region of Western Australia.
Figure 1: Location of Hancock Iron Ore Project, Western Australia
Table 1: Mineral Resource Statement (MRE) (JORC 2012), Hancock Iron Ore Project, Alien Metals, September 2021
Significantly, with the initial analysis of the samples, the iron ore appears to be a high-quality product with very little adverse deleterious minerals that would affect its appeal and usability.
The average grade of the DSO grade ore from the Western Ridges to date is around 61.5 % Fe and with the current volume of 2.6Mt it currently contains over 2 years’ initial mining material and is recommended as the initial ore to mine.
An updated Discounted Cashflow Analysis using very recent analogous costs where required, but also up to date costs available, returns an impressive USD >$60/t Free on Board from extraction at site to delivery to the Port Hedland Public Ore Terminal, including government royalties.
Such a project, as already noted, is an extremely low capex one as it does not require any type of on-site fixed plant nor railway or port requirement to begin mining. The mining method would probably entail using surface mining machines such as those already used by FMG very effectively already and would require minimal screening and crushing. Should this be required it would be done by a mobile unit right at the mine face and then, for delivery of the ore, road transport would be a suitable and highly economic method (see figures 5 and 6). Contract mining and ore transport would be the preferred option to further reduce Capex requirements for the project.
The project is only 20 kms from the Iron Ore town of Newman so other than a small central office on site no camp would be required to be built. Contract mining and transport would be recommended as well again to negate any Capex to purchase equipment and support infrastructure to go with it (Maintenance facilities etc). The main Capex would be for putting in a suitable road between the mine face and the Great Northern Highway to the west of the tenement but once installed would need minimum maintenance. This would be in the region of half the projected Capex and based on current mine planning and current iron ore prices would be paid back in less than 6 months into the mining cycle.
Alien is also looking at off-take options as a way of securing the potential of the project and the feasibility of the project and will, now that an MRE is present, be able to talk in earnest with several parties on possible options for developing the project.
Figure 2: Tenement boundary and target location. Drill collars shown in green, and the optimised pits shown in red
Figure 3: Optimised pit shell, Sirius Extension, Hancock Project, October 2021
Figure 4: Optimised pit shells Ridges C and E deposits, Hancock Project, October 2021
Figure 5: Surface mining method (FMG, Pilbara WA) from the ground straight into a truck
Figure 6: Example of a mobile screening and crushing plant
Upside Potential and next phase
With the improved understanding of the DSO bearing horizon and the large extent of untested highly prospective ridges remaining, Alien plans to target these specific horizons in the next drilling programme, Phase 3, with the plan to increase both the size of the initial resource as well as the confidence. Figure 7 below shows the location of the current drilling and the extensive ridge targets still to be drill tested.
Figure 7: Target areas for further ground reconnaissance, Hancock Tenement, Hamersley Iron Ore Project, August 2021
For further information please visit the Company’s website at www.alienmetals.uk, or contact:
Alien Metals Limited
Bill Brodie Good, CEO & Technical Director
(via St-James’ Corporate Services, Company Secretary)
Tel: +44 20 7796 8644
Notes to Editors
Alien Metals Ltd is a mining exploration and development company listed on AIM of the London Stock Exchange (LSE: UFO). The Company’s focus is on precious and base metal commodities, with its operations located in proven mining jurisdictions and it has embarked upon an acquisition-led strategy headed by a high-quality geological team to build a strong portfolio of diversified assets.
In 2019, the company acquired 51% of the Brockman and Hancock Ranges high-grade (Direct Shipping Ore) iron ore projects and has recently entered into a conditional agreement to increase its interest to 90%. In 2020 the company acquired 100% of the Elizabeth Hill Silver Project, which consists of the Elizabeth Hill Historic Silver Mine Mining Lease and the surrounding Munni Munni North Exploration Tenement. The Australian projects are located in the world-renowned Pilbara region of Western Australia.
The Company also holds two silver projects, San Celso and Los Campos, located in Zacatecas State, Mexico’s largest silver producing state, which produced over 190m Oz of silver in 2018 alone, accounting for 45% of the total silver production of Mexico for that year. The Company holds a Copper Gold project in the same region, Donovan 2.
The company was also awarded an Exploration Licence in Greenland in late 2020, which surrounds the world class Citronen Zinc-Lead deposit.
In addition to progressing and developing its portfolio of assets and following its strategic review of its portfolio of silver and precious metals projects, Alien Metals has identified priority exploration targets within all of its projects which it is working to advance systematically.
Competent Person
The information in this announcement which relates to Exploration Targets, Exploration Results and the Scoping Study has been approved by Mr. Allen Maynard, who is a Member of the Australian Institute of Geosciences (“AIG”), a Corporate Member of the Australasian Institute of Mining & Metallurgy (“AusIMM”) and independent consultant to the Company. Mr. Maynard is the Director and principal geologist of Al Maynard & Associates Pty Ltd and has over 40 continuous years of exploration and mining experience in a variety of mineral deposit styles. Mr. Maynard has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for reporting of Exploration Results, Exploration Targets, Mineral Resources and Ore Reserves” (JORC Code). Mr. Maynard consents to inclusion in the announcement of the matters based on this information in the form and context in which it appears.
Mineral Resource
The information in this report that relates to Mineral Resources is based on information compiled by Mr Howard Baker, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy and is employee by Baker Geological Services Ltd. Mr Baker has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Mr Baker consents to the disclosure of information in this report in the form
and context in which it appears.
Mr Baker of BGS is a resource geologist with 25 years’ experience covering multiple commodities from early-stage exploration through to definitive feasibility studies. Mr Baker is the Managing Director of BGS and previously worked for the International Mining Consultancy, SRK Consulting (UK) Ltd (“SRK”) where he was employed for eight years as a Principal Consultant and Practice Leader. In his time at SRK, he focussed on the management of Mineral Resource Estimates with a strong focus on technical quality management and compliance to international reporting codes. In addition, he played a key role in advising on suitable exploration protocols and drill programmes and effectively assisted clients in the development of numerous large-scale iron ore projects. Prior to his time at SRK, Mr Baker lived and worked in Australia, working for Rio Tinto, BHP Billiton, Iluka Resources and Anaconda Nickel.
Mr Baker has extensive global experience in the geology and Mineral Resource Estimation of iron ore projects and worked as a mine geologist and specialist resource geologist in the iron ore Pilbara district of Western Australia.
