PERTH (miningweekly.com) – The South Australian government has approved ASX-listed IronClad Mining’s development plans at the Port of Lucky Bay, on the Eyre Peninsula, paving the way for the start of the Wilcherry Hill iron-ore project.

IronClad had previously announced that it would amend its port plans by introducing a modest bulk ore stockpile facility at the port, reducing the required number of containers transporting the ore from the mine site from over 3 000 to just 250.

The amended application required further input by both IronClad and the Sea Transport Corporation, but the responses were adequate to allow the Minister of Planning to approve the new port development plans.

IronClad told shareholders on Tuesday that the port development approval was the final piece of the approvals puzzle for the Wilcherry Hill project, and with the application now approved, the company could move to finalise the project financing.

The start-up capital required for the Stage 1 operation was estimated at A$15-million, with a further A$6-million required for the purchase and construction of a crushing plant.

Negotiations to arrange debt financing for the capital have been under way for some time, IronClad noted, but added that it had previously been hindered by the uncertainty over the port approvals.

Stage 1 production at the Wilcherry Hill operation would see about one-million tons a year of direct shipping ore (DSO) magnetite being produced, increasing to two-million tons a year by the second year of operation.

The first two years of production from the project have been contracted for sale to international steel mills, while 50% of the forecast production of year three and four had been contracted through sale of an offtake agreement with Hong Kong-based New Page Investments.

Stage 2 of the Wilcherry Hill project would increase production to between four-million and five-million tons a year of iron-ore, by combining Wilcherry Hill magnetite concentrate with the DSO product.

The company said on Tuesday that the period required to finalise the design work, procure long-lead items, attain all governmental approvals and construct the Stage 2 plant would likely be between 12 and 14 months.

Subject to finance, it was envisaged that this work would start towards the end of the first year of the Stage 1 operations.

Stage 3 of the project would include the exploration and development of the Hercules project, which had an inferred and indicated Joint Ore Reserves Committee-compliant resource of 198-million tons, and was expected to increase output to between 10-million and 12-million tons a year by 2015.