Nevada Iron secures 2.4Mtpa port deal for Buena Vista magnetite concentrate Wednesday, December 12, 2012 by Angela Kean The signing of a non-binding Letter of Intent with the Port of West Sacramento for the storage and loading of magnetite concentrate to be produced at Nevada Iron’s Buena Vista magnetite mine provides a port solution at competitive rates and is another step in the process of financing and building the mine. Nevada Iron (ASX: NVI) has secured a port deal with the Port of West Sacramento for the storage and loading of 2.4 million tonnes per annum (Mtpa) of Buena Vista magnetite concentrate.
This is sufficient tonnage to cover all of the planned production from the proposed phase one mine development.
Nevada Iron has signed a non-binding Letter of Intent (LOI) with the port, which is located about 375 kilometres by rail from the Buena Vista Project in Nevada, and is the closest available port.
Under the LOI, Nevada Iron would have the use of rail, covered storage and loading facilities to handle up to 2.4Mtpa of magnetite concentrate.
The term of the agreement will be for five years, with the option to extend for a further five years.
Nevada Iron has committed to a minimum annual guaranteed tonnage of 500,000tpa of concentrate.
The port will provide covered storage facilities with the capacity of up to 90,000 tonnes for use by the company.
Mick McMullen, executive chairman, told Proactive Investors today the next steps following on from the signing of the LOI will be to sign up the rail carrier and complete the Feasibility Study update.
Project optimisation
Nevada Iron is in the process of optimising the Buena Vista Iron Project and is investigating the impact of:
- Increasing phase one plant throughput from the original design level of 4.8Mtpa to about 7Mtpa (phase one); - Scheduling mining from multiple deposits in the initial years to increase concentrate production to levels of up to 2.4Mtpa (phase one); and - Expanding the project after a few years of operation to produce in the order of 4 to 5Mtpa of concentrate (phase two).
The increased throughput of 7Mtpa gives materially better project economics than the 2011 Feasibility Study throughput of 4.8Mtpa.
Total capital costs are expected to be in the order of US$300 million +-15% for the larger phase one project.
Nevada Iron is also investigating the expansion of the project through a phase two circuit a few years after the initial start-up, which could double concentrate production.
A doubling of production would reduce operating costs by spreading the fixed costs of the operation across a larger production tonnage.
McMullen said the resource upgrade is the “critical path” to the project’s optimisation studies, with the upgrade expected to be delivered in mid-January.
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NVI Price at posting:
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