Mount Gibson Iron has started development of Iron Hill iron ore mine in Western Australia after securing the final statutory approval.
Located in the Midwest region of the state, Iron Hill is 3km from the company’s recently depleted Extension Hill open-pit.
Due to this close proximity with the depleted mine, Mount Gibson Iron can utilise most of the Extension Hill’s workshops, processing facilities, camp and transport infrastructure to the new mine.
The company will also transfer around 160 employees and contractors of Extension Hill to Iron Hill mine.
Accordingly, the company expects to spend negligible capital at the new mine as first product sales is scheduled in May 2017.
Life-of-mine site cash costs are also expected to be similar to operations at Extension Hill at nearly A$46-48/ wet metric tonnes ($35-36.7/wmt) free on board (FoB).
Mount Gibson CEO Jim Beyer said: “We are very pleased to gain the final approvals required for Iron Hill, which are the successful culmination of a huge effort by our permitting team since the initial application was made over two years ago.
“Obtaining these approvals in a large part reflects our proven record of, and ongoing commitment to, responsible resources development in the state’s Midwest and Kimberley regions.
“We now look forward to rapidly developing this attractive high-value, low-capital production opportunity, thereby extending the life of our Midwest business.
“It is also very pleasing to be able to deliver additional value for our shareholders while continuing to provide much needed economic activity in the Midwest region by way of direct employment and the engagement of local business.”
In the current financial year, the company expects that Iron Hill will generate product sales of approximately 400,000wmt to 500,000wmt.
The site is expected to deliver total life-of-mine product sales of 5.5 million to six million wet metric tonnes through to late- 2018 when production is expected to complete.
Mount Gibson has already signed offtake agreements for nearly 70% planned production of first year from Iron Hill.
Iron Hill project hosts total mineral resource of 8.8 million tonnes at 58.3% Fe.