CZR Resources moves to join growing ranks of ASX iron ore producers

Iron ore exploration company CZR Resources (ASX:CZR) is aiming to follow a raft of new producers into the booming sector with its Robe Mesa project in WA’s West Pilbara region (reports Stockhead).
12th March 2021
Resources Rising Stars

Iron ore exploration company CZR Resources (ASX:CZR) is aiming to follow a raft of new producers into the booming sector with its Robe Mesa project in WA’s West Pilbara region (reports Stockhead).

A definitive feasibility study is being readied for the project that will pave the way for mining approvals after a pre-feasibility study last year showed it would generate strong returns.

“The [company’s] strategy is aimed at unlocking the maximum value of the project at the earliest opportunity by pursuing a range of desk-top, field studies and other activities at the same time,” managing director, Rob Ramsay, said.

The pre-feasibility study showed Robe Mesa could generate a life-of-mine cashflow of $96.4m based on a 62 per cent iron ore price of $US90 per dmt ($116.30/dmt), for a capital cost of $51.1m.

Average cash operating costs for the project are $64.78 per dry metric tonne, and CZR Resources has a production target for Robe Mesa of 2 million tonnes per year for direct shipping ore which requires minimal processing.

Iron ore spot prices were trading at $US164.75 per tonne ($213.15/tonne), Thursday and steady on-day, according to Metal Bulletin.

May-settlement iron ore futures contracts on China’s Dalian Exchange were 4 per cent lower at ¥1,098 per tonne ($US168.90/tonne), according to exchange data.

CZR Resources has started work on selecting the optimum area within its Robe Mesa deposit for conversion into a mining lease from an exploration licence.

Robe Mesa deposit covers a geological area that abuts Rio Tinto’s Warramboo, Mesa A and Mesa J-K mines which export around 34 million tonnes per year of iron ore.

The deposit hosts a resource of 89 million tonnes at 53.7 per cent iron, and a near-surface higher grade resource of 24.7 million tonnes at 56 per cent iron.

The company is preparing to finalise the definitive feasibility study budget and is examining the scope of the project for further cost reductions.

Direct shipping ore from Robe Mesa was intended to be shipped through Port Hedland, a distance of 300km, however the company is now looking at closer port options.

The port options under consideration lie between Onslow (Ashburton) and Dampier, a distance of around 100km.

Using Onslow’s port facilities would reduce the haulage distance for Robe Mesa iron ore by 260km, compared to a pre-feasibility study case of using Port Hedland’s Utah facility.

“CZR has an outstanding opportunity to develop an iron ore project in the world’s most desirable iron ore region with low costs and simple production methods,” said Ramsay.

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