West Australian iron ore player CZR Resources has received more assays that seemingly support its strategy to grow mine life and production rates at its Robe Mesa iron ore project in the west Pilbara. The company says the project is poised for significant growth as the latest assays continue to reveal extensive direct shipping ore, or “DSO” mineralisation from the surface and outside the resource area.
The assays were predominantly from drilling in the southern half of the deposit, where the preliminary feasibility study, or ‘PFS’ accounted for a series of small, shallow pits. Importantly, the mineralisation is now shown to be continuous between the zones; potentially opening the door for a larger operation to be developed.
CZR believes the expanded zones could underpin increased production rates and mine life with the definitive feasibility study or, ‘DFS’ now targeting a 50 per cent increased production rate of 3 million tonnes per annum compared with the 2mtpa forecast in the PFS.
Notably, the PFS outlined a payback period of 19 months based on a C1 cash cost of $64.78 per dry metric tonne and a benchmark iron ore price of US$90 a tonne. The PFS also outlined a pre-production capital estimate of $51.1 million and a life of mine of 5.3 years.
Remarkably, last week iron ore cargoes of 63.5 per cent iron were changing hands at US$146 per tonne at the port of Tianjin in China.
According to the company, the previous drilling targeted the upper pisolite in the southern half of Robe Mesa and with its updated model will now be drill testing the lower pisolite in areas of thick upper mineralisation.
The company is eyeing diamond and extensional reverse circulation drilling programs for the upcoming June quarter.
The explorer says the updated resource estimate will underpin new pit designs and also anticipates its completion in the June quarter.
CZR Resources Managing Director, Stefan Murphy said: “Robe Mesa’s prospects go from strength to strength with every batch of assays, together with the work we are doing on the DFS.”
“As well as expanding the DSO mineralisation, we are undertaking essential work on land access, environmental studies and community relationships and logistics, including port access.”
“With a dedicated Study Manager now leading the DFS, we are moving ahead rapidly with our plan to complete the DFS and bring Robe Mesa into production.”
The company’s management has also been bolstered by the addition of Fabian Goddard, who will lead the project’s DFS as the associated activities begin to ramp up.
The company says site works are scheduled to start in mid-April in preparation for the upcoming diamond drilling and metallurgical test program.
In addition, heritage surveys have been pencilled in for April and May to clear the way for additional site access, water bore field development and extensional drilling.
Whilst the company settles on a final haulage route, it has pre-emptively applied for additional licenses to cover its non-processing infrastructure.
Interestingly, the Robe Mesa project is a joint venture where CZR holds 85 per cent and the remaining 15 per cent is independently held by ZanF.
The Robe Mesa iron ore deposit hosts ore reserves of 8.2 million tonnes grading 56 per cent iron, derived from a mineral resource base of 24.7Mt at 56 per cent iron with a 55 per cent cut-off grade.
CZR notes when using the lower cut-off grade of 50 per cent, its resource increases significantly to 89.1Mt at 53.7 per cent iron.
The deposit sits within the prolific Robe Valley, also hosting the Robe River joint venture – between Rio Tinto, Mitsui & Co and Nippon Steel – that has been mining the channel iron deposits since the 1970s.
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By Matt Birney
