Rutila gets EPA endorsement for railway - another major step forward

Extracts from Western Australian:

Rutila Resources' ambitious central Pilbara iron ore project has cleared another hurdle, with the Environmental Protection Authority endorsing the construction of 200km of new rail and conveyor lines.

The EPA's recommended approval is subject to several conditions, including a management plan to ensure the construction and operation of the Balla Balla infrastructure project minimise any impact on the big nearby population of Northern Quoll.

Under the proposal, the 160km of rail and 45km of conveyor lines would link Flinders Mines' proposed 30 million-tonne-a-year iron ore mine with an export terminal, 85km south of Port Hedland.

Ore from Flinders would be moved by a raised conveyor to Rutila's own proposed Balla Balla magnetite project and then railed to the terminal, before being loaded onto barges and ferried to bulk carriers offshore.

Rutila would develop the infrastructure with project partner and major shareholder, New Zealand's Todd Corp.

The companies say the rail and port project will unlock the Rutila and Flinders mining projects, as well as potentially other stranded deposits in the region.

However, while a final investment decision is not due until the end of 2015, the plunge in the iron ore price over the past six months is expected to test their ability to raise funding.

In November, Rutila suggested the joint venture's low operating costs would enable it to land iron ore in China at $46.50/t. The steel-making ingredient was trading at less than $US58/t yesterday.

EPA chairman Paul Vogel said Rutila had considered six alternative rail corridors to reduce the potential environmental impact, including avoiding a large population of Northern Quolls in the Nunyerry Gorge.

The EPA's recommendation is now open for a two-week public appeal period.

end

Note the $46.5/t was Aussie dollars, which is ~US$35/t - still a US$23/t margin - not saying finance is going to be easy in this environment, but not impossible.

Stock is looking v cheap again...