Ann: Mt Webber Deposit Scoping Study Outcomes , page-7

re: Ann: HAO: Mt Webber Deposit Scoping Study... Can't believe share price is down - this has to be a first...

Absolute classic as they say.

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Mt Webber numbers stack up: Giralia
Kate Haycock
Thursday, 17 December 2009

GIRALIA Resources could be an iron ore producer in 2011 from its Mt Webber joint venture with Haoma Mining with the JV partners targeting a 2 million tonne per annum operation.

A scoping study by ProMet Engineers found a 2Mtpa owner-operated mining and road haulage operation at Mt Webber could have a net present value of $A170 million and an internal rate of return of 53.9%.

This base-case scenario would have a capital cost of $115 million and operating costs of $42.12 per tonne.

However, the base case was not the only option explored by the study, with ProMet also doing the numbers on contract mining and haulage.

Under this alternative, the capex for the project came down to $49.5 million but the opex was higher at $47.80/t.

Under both the base case and alternative scenarios, the opex costs were blown out by haulage costs from trucking the ore to Port Hedland.

Giralia said these costs could be reduced if it could negotiate third-party rail access.

ProMet recommended Giralia move directly to a definitive feasibility study for the project.

The Mt Webber project is part of the Daltons JV between Haoma and Giralia and is next door to Atlas Irons project of the same name.

The project has a resource of 40 million tonnes at 57.3% iron and Giralia said today the ore was dry and had a low alumina content, with a waste to ore ratio of 0.3:1.

Perth-based Giralias other iron ore projects include the Beebybn, Western Creek and McPhee Creek haematite projects in the Pilbara.

Shares in Giralia were last traded at 41.40, up 3.5c this morning.