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Havilah Resources Edges Closer To Mining Lease For Maldorky Iron Mine

Havilah Resources (ASX: HAV) is advancing development of its Maldorky iron ore mine in South Australia with the submission of a Mining Lease Proposal document to the Department for Manufacturing, Innovation, Trade, Resources and Energy.

This specifies details of the mining operations and supports its application for a mining lease over the mine, which has a Resource of 147 million tonnes grading 30.1% iron from surface.

The current mining proposal is for a 5 year mining plan, in which 24 million tonnes of iron ore will be mined to produce 8.5 million tonnes of saleable concentrate.

This will be revised to cater for expanded mining rate beyond five years, subject to available infrastructure capacity.

Maldorky

Maldorky is planned as a 2 million tonne per annum open cut mining operation with a mine life of more than 20 years.

Notably, the low life of mine strip ratio - estimated at just 1:12 - translates to favourable mining economics with total operating costs estimated at $66 per tonne on ship.

Initial capital expenditure is estimated at $60 million to $70 million.

This will produce a combined magnetite-hematite iron ore concentrate that will be shipped via existing rail and port facilities in order to minimise upfront capital expenditure.

First production is targeted for the second half of 2015, subject to timely receipt of mine operating permits, financing and satisfactory resolution of other key development issues.

Production will begin at 1Mtpa in Year 1 before ramping up to 1.5Mtpa in Year 2 and 2Mtpa in Year 3.

Further increase in production can be supported by available resources, but is dependent on expansion of shipping facilities.

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