AIM-listed mineral development company Bushveld Minerals has announced that it has completed a scoping study on the P-Q zone at the Bushveld iron ore project located in Limpopo, South Africa, which revealed a potential 12% of the total Joint Ore Reserve Committee resource of the total 718 Mtpa.
The scoping included a mining study of a whittle pit optimisation and a preliminary production schedule was undertaken and the results factored into the financial model. The company said that given the nature and geometry of the ore body, it is ideally suited to open-pit mining, and the ore can be readily accessed from surface after minimal overburden (soil) stripping.
We are delighted to present the positive scoping study results for our Bushveld Iron Ore Project in South Africa. We have chosen to adopt an initial low capex route to enable the company to reach production and cash flows in a shorter time horizon. We believe our approach is low risk, particularly given the challenging global markets for project financing. Yet the project retains the flexibility to scale up the mining operations and the option of developing modular integrated pig iron or steel facilities. The pre-feasibility studies that are due to commence in May will investigate these options further and we look forward to presenting the prefeasibility study results in Q1 2014, said Bushveld Minerals CEO Fortune Mojapelo.
The P-Q Zone outcrops beneath a thin soil layer (2 m) and comprises 5 distinct layers over an average thickness of 45 m, consistent to depth (400 m) and along strike. The layers fall into two categories massive and disseminated ore and are weathered down to about 30 m.
Bushveld Minerals said that the scoping study delivers an initial low capital expenditure project which results in first phase cashflows that can be leveraged to unlock the larger potential inherent in exploiting the deposit along strike and to lower depths, as well as pursuing downstream beneficiation opportunities.
We believe that this conservative approach will give the project the best opportunity of reaching production by our target of 2016 with competitive economic parameters.
That this scoping study utilises only 12% of the current resource, which is based on only 5.5 km of a potential 18 km strike, with scope for selective high grade mining, underscores the scale-up opportunities of the project, added Mojapelo.
He pointed out that while the P-Q deposit can support a much larger scale of operations, the company also took into account realisable capacity on the existing rail and port infrastructure in opting for a base case 5 Mtpa run of mine, suggesting that such a conservative approach will give the project a great chance of being delivered to production with competitive economic parameters and in a short timeframe (2016).