- SRN has completed its scoping study for the Perenjori Iron Project, which has been assessed to produce high-grade magnetite concentrates.
- The study proves that the proposed project is well-positioned to meet SRN’s threshold of 30% Internal Rate of Return (IRR) for development.
- The project is located in a mature mining region with established access to power and rail networks.
In a crucial development, Surefire Resources NL (ASX:SRN) has wrapped up its scoping study for the Perenjori Iron Project. The study bolsters the economic potential of the iron ore project and was announced on 13 May 2021.
The study paves the way for the company’s Board to progress and fast-track the pace of the mineral project. The scoping study has outlined the potential to develop a low-cost operation, producing high grade magnetite concentrate at the iron ore project. It is to be noted that high-grade magnetite concentrates are traded on premium and hence, can enhance the economic potential of the project.
To undertake the study, Surefire roped in MinRizon Projects Pty Ltd, a prominent industry name which has been instrumental in designing and construction of magnetite beneficiation plants across Australia.
The scoping study was based on the JORC 2004 compliant inferred mineral resource of 191.7Mt with 36.6% Fe – as previously estimated by globally renowned consultant firm CSA Global. Surefire plans to conduct additional test work during the Prefeasibility Study stage in order to confirm their conclusions.
Premium iron ore project in the premium mining jurisdiction
The Perenjori iron project stretches over the wholly owned tenement E70/5311 and is strategically located just ~15 kms from the Morawa-Peronjori trunk rail line and the Karara rail spur.
Perenjori Iron Project and the existing regional infrastructure Source: SRN company announcement 22 June 2021
Power: The mining infrastructure and transport connectivity are integral components of a low-cost and profitable mining operation. Suitably, the Perenjori iron project is located in proximity to established mining and logistics infrastructure. The mining project enjoys an opportune location near multiple towns, which can supply the required manpower for the development. The tenement is in good standing and is valid till 11 November 2025.
Power and Water: The Three Springs-Golden Grove electricity transmission line is less than 8km to the deposit. A connector to the Perenjori Iron Project has been estimated as part of the study along with the assessment of an alternative LPG gas turbine-based power source.
There is also a possibility of dewatering of the pit, which may not be sufficient to fulfil the process plant requirements. The availability of good quality water has been recognised within 60km of the project area and will be subject to the government water allocation scheme. Accordingly, the cost for a water supply pipeline has also been included in the estimates.
Logistics: The iron ore project enjoys established rail access to the north and south within 15km of the deposit. For the sake of the study, a spur railway line and trucking to the rail head options were considered. The project is also well connected to the Geraldton port and is just 219 kms from the mining project.
The port storage and reclamation facilities at the port of Geraldton for Panamax-sized vessels have been included in the costings. The access to the port facilities will be negotiated.
Proposed mining operations: Surefire plans to use conventional open-pit mining methods using a standard drill, blast and shovel and truck operations to deliver magnetite ores to the processing plants and waste to dumps.
Indicative magnetite product specifications Source: SRN company announcement 22 June 2021
The proposed beneficiation flow sheet involves crushing, two pass grinding and magnetic separation. The rough magnetic separator will use 220µm feed and the magnetic material will be sent to a secondary AG mill and fine magnetic separation circuit with a grind size of P80 of 35µm. The weight recovery has been estimated to be 44% with a yield of 85% iron.
CAPEX and OPEX estimates: As part of the high-level Net Present Value-based financial model, the study assesses the project’s economic viability. Although the mining, production rates and financial forecasts will be disclosed in the future, the outcomes of the Scoping Study have bolstered the confidence of SRN’s board and has outlined the rewarding opportunity at the high-grade magnetite project.
Surefire plans to undertake additional resource definition task to upgrade its inferred resources to JORC 2012 standards. Surefire believes that it is well funded to undertake the task. The study showed that the proposed project is well positioned to meet SRN’s threshold of 30% Internal Rate of Return (IRR) for development.
Surefire traded at AU$0.016 a share on 22 June 2021 with a market capitalisation of AU$18.59 million.