The board of BC Iron has given the go-ahead for the development of its $43 million Nullagine iron ore project in the Pilbara, but will need approval from new joint venture partner Fortescue Metals Group.
BC Iron's approval follows the receipt of results from the project's feasibility study which was based on an initial production target rate of 1.5 million tonnes each year.
Production will then be ramped up to 3mt a year then 5mt as roads and infrastructure are upgraded.
The study estimated capital expenditure of $43 million with a forecast operating cost of $43 a tonne over the life of mine, pegged at eight years.
First ore production is scheduled for the second quarter of next year.
An offtake agreement has already been signed with private Australian company Tennant Metals.
The study showed up to 40 people will be employed during the construction phase of Nullagine and up to 115 people during operation at a production rate of 1.5mt each year.
The study will now be reviewed by Fortescue and if endorsed by the Pilbara miner, a previously agreed to joint venture will be established.
Last month, both iron ore companies signed an agreement to establish a 50:50 JV to develop Nullagine.
Under the agreement, BC Iron will manage the JV including operations, road haulage, marketing and ore sales.
Fortescue will manage all rail and port operations, taking product from the project stockpile at its Chichester operation to ships in Port Hedland.
