Yes, there is exploration potential for magnetite in the Middleback Ranges. But impurities and scale will be the issues.
From Mr Gupta's perspective, I can see why he may have passed initially on Carpentaria's Hawsons iron ore project:
1. Initial planned production of 10 Mtpa has already been 'allocated' to Bahrain Steel, Emirates Steel and Kuwait Steel from the Middle East; China’s Shagang International; Japan’s Mitsubishi Corporation RtM; Taiwan’s Formosa Plastics; and trading house Gunvor Group;
2. The project is located ~60 kms from the Broken Hill-Whyalla rail line;
3. The JORC (2012) Inferred and Indicated Resources of 2.5 Billion tonnes yields 348MT of 69.7% Fe concentrate, a yield of 15% (meaning 85% of the iron ore as dug from the ground is discarded during beneficiation). This compares with HAV's average yield of ~35%;
4. The cut-off grade is 9.5%. This compares with HAV of 18%;
5. The project is located in NSW, so transportation of ore would need to go from NSW to South Australia to his Whyalla blast furnaces. In addition, Mr Gupta's could not tap the South Australian Government for funds to assist a NSW project; and
6. The project is owned by Carpentaria Resources 66.5%, Pure Metals 32.5%. So Mr Gupta would have to negotiate with two parties.
Just a reminder, the Grants iron ore deposit is the soap dish (1.16 sq kms in area) on your bathroom basin. The Grants Iron Ore Basin represents the bathroom sink (17.1 sq kms in area).
IF the Grants Iron Ore Basin is the 'elephant' in the Braemar iron ore room, and Mr Gupta farms into it or buys it outright from HAV, it is highly unlikely that any of the other Braemar iron ore projects will ever be developed in our life time.
Cheers
These are only my random (everything including the bathroom sink) thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.
HAV fanboy: still drinking the Kool-Aid
HAV Price at posting:
23.0¢ Sentiment: Buy Disclosure: Held
(20min delay)
