Iron Road Limited announced following its recent Definitive Feasibility Study Update (October 1st 2013) an estimate of operating costs for the Central Eyre Iron Project. Pending completion of the DFS by December 2013, it is expected that the operating cost profile in real 2013 terms will be in-line with the mid 2011 Prefeasibility Study assessment.
Highlights;
1. Estimated FOB operating costs (ex-State royalty) of AUD 59 per dry metric tonne reiterated as a realistic assumption following AUD 58 million of additional exploration, metallurgical and feasibility work since the mid 2011 PFS.
2. A highly competitive operating cost profile, substantiated by the DFS, would theoretically place CEIP in the second quartile of the 2013 price adjusted CFR China cost curve.
3. CEIP nameplate EBITDA potential of USD 1B+ per annum when factoring in long term iron ore price forecasts from an independent industry consultant.
Mr Mr Andrew Stocks MD of Iron Road said that "The Company anticipated a highly industry competitive cost profile with indications of a favourable operating margin. More than two years after we released our PFS, we anticipate our DFS will deliver nameplate operating costs comparable in real terms with the earlier indicative assessment. Magnetite projects in Australia have been knocked about recently. We've seen predictions of imminent iron price collapses that have not materialised, along with unfortunate large scale cost overruns associated with problematic commissioning and ramp up of difficult to process banded iron formation projects in Western Australia. However, we believe the scale of pessimism across the board is unwarranted, particularly when considering the significant geological and technical advantages the coarse grained CEIP mineralisation holds over the fine- grained magnetite projects.'