CZR Resources has inked an option agreement to acquire a granted exploration tenement just 70km south of the Port of Ashburton as it ponders a potential stockyard and haulage depot to service iron ore exports.
The agreement with Great Sandy Pty Ltd is for a tenement covering 115 square kilometres, 60km south-east of Onslow in Western Australia’s Pilbara region. Management believes the land is positioned perfectly for a potential central stockyard and distribution hub to service its Robe Mesa iron ore mine.
However, in order to lower capital and operating costs, the company believes it would work best as a joint shared facility given its proximity to Strike Resources’ Paulsens East iron ore mine and the proposed Port of Ashburton Consortium export facility.
Under the terms of the deal, CZR will pay an initial fee of $5000 for an exclusive option until August 31. It may exercise its option to acquire the tenement at any time during the period for $75,000 worth of its shares.
Alternatively, the company may extend its option period by another four months with a payment of a further $5000. During the second period, it can take up its option for $70,000 in shares.
CZR is already on the front foot in applying for a miscellaneous licence for the tenement for the specific purpose of holding the related stockyard, trucking and accommodation facilities.
Apart from its potential as an infrastructure hub, management says its new tenement also hosts the Mt Minnie project, which is prospective for copper-gold mineralisation. The project was discovered in the 1990s by Wiluna Mining Corporation as a possible iron oxide-copper-gold deposit after it identified four prospects using airborne and ground geophysics surveys and surface geochemistry.
CZR’s Robe Mesa project is in the West Pilbara, 200km south-west of Karratha and 175km from Onslow. It forms part of the Robe Valley channel iron deposits between Rio Tinto’s Mesa A and Mesa J-K iron ore mines.
Earlier this month, CZR cranked up its Robe Mesa iron ore reserves by a massive 230 per cent to 27.3 million tonnes at 55 per cent iron, or 62.2 per cent iron after calcining.
The company’s boosted reserves underpin an initial eight-year mine plan production figure of 3.5 million tonnes per annum with a cash cost (C1) of $57 a tonne and an impressive internal rate of return of 70 per cent at an iron ore price of $131.1 per tonne. Management believes there is more scope for growth in its inventory, mine life and production levels by including its Robe Mesa South deposit.
CZR owns 85 per cent of Robe Mesa and the remainder is held by well-known prospector-turned-investor Mark Creasy, whose interest is free-carried until the completion of the project’s DFS.
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By Steve Kaless
