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PERTH (miningweekly.com) – Bauxite developer Queensland Bauxite has inked a heads of agreement (HOA) with the Far North Queensland Ports Corporation to secure port capacity for its planned South Johnstone project.
The junior said on Tuesday that the HOA gave a commitment of port capacity for product expected from the South Johnstone project, and confirmed the availability of significant initial port capacity.
“Logistics, and in particular port capacity, are key to our commercialisation strategy, especially to markets in Asia,” said Queensland Bauxite executive chairperson Pnina Feldman.
“This HOA is an important and necessary step in confirming our commercial path to market and gives us further confidence in our ability to execute on our strategy of exporting product to our key seaborne bauxite markets.”
The Port of Mourilyan is about 15 km to 24 km west of the South Johnstone mine, and has suitable road connections. The facilities would allow for the shipment of an initial 800 000 t/y of product, starting in 2015.
Feldman noted that the port provided an “excellent” logistics solution to develop a profitable mining and exporting operation in 2015. A second larger operating mining and export scenario would also be evaluated.
The South Johnstone project covers an area of about 400 km2 and has an exploration target of between 193-million tonnes and 405-million tonnes.
A December scoping study estimated that the project would require a capital investment of A$5.14-million to deliver about 800 000 t/y of product, at an operating cost of A$20.87/t.
The project was expected to generate yearly gross revenue of A$42.2-million and would have an internal rate of return of 223%.
Based on discussions with the relevant government departments, landowners, local authorities and environmental experts, Queensland Bauxite said it was of the firm belief that environmental approvals and mining leases would be granted in time to allow for production to start in the second half of 2015.