CZR nearing Pilbara iron ore PFS completion

ASX-listed iron ore and gold hopeful, CZR Resources, is marching towards completion of a pre-feasibility study on a proposed development of the Robe Mesa iron ore deposit at its 85 per cent-owned Yarraloola project in WA’s Pilbara. The study that is set to be wound up by year’s end will assess a low-CAPEX iron ore mine predicated on using existing road transport infrastructure to truck the ore to port.

Perth-based CZR will consider hauling its Robe Mesa direct shipping ore, or “DSO” roughly 400km via road train to the ore-loading facility at Port Hedland.

However, it says that port options within a 100km radius of Robe Mesa between Onslow and Dampier may present an opportunity to reduce the haulage distance as other companies look to develop new port infrastructure along the Pilbara coast.

Importantly, CZR says it has engaged in positive initial discussions with prospective buyers of its lower-iron content product.

In the wake of the rebounding iron ore price, the company is weighing up a direct shipping ore mining operation producing at the rate of about 1.5 million to 2.5 million tonnes per annum.

CZR’s PFS will focus on the higher-grade component of the Robe Mesa resource, which currently stands at an indicated and inferred 24.7 million tonnes going 56 per cent iron that calcines to 62.7 per cent iron.

Robe Mesa’s overall indicated and inferred resource estimate including the higher-grade material is 84.5Mt at 53.8 per cent iron calcining to 60.2 per cent iron.

According to the company, its recent discussions with Asian steel mills and trading houses regarding the acceptability of the Robe Mesa DSO product and likely pricing points based on an indicative ore specification confirm market support for the project.

The positive feedback from the prospective customers who, according to CZR already buy DSO products grading approximately 56 per cent iron from Australia, suggests there is demand in the market for lower-grade ore.

A discount off the benchmark 62 per cent iron ore price generally applies to the price of lower grade ore and CZR points out that the discount rate is at its lowest level since 2016.

The company says a similar DSO product to the one that would be produced at Robe Mesa is currently selling for more than US$100 per tonne on a cost and freight basis.

Key parts of the PFS including mine planning and design, operating costs, CAPEX estimates and metallurgical testing are well advanced, while CZR has kicked off preparations for the approvals processes.

Robe Mesa sits adjacent to a road transport corridor established by BCI Minerals for the 134Mt at 57.6 per cent iron Bungaroo South deposit, which was acquired by Mineral Resources Ltd earlier this year.

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