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IMX Resources reaches 500,000t shipped ore milestone from Cairn Hill in just 7 months

IMX Resources (ASX: IXR) has loaded the next iron ore shipment in Port Adelaide which has pushed the company to the 500,000 tonne shipped milestone from the Cairn Hill mine - in just seven months after shipping operations kicked off in December 2010.

As the Cairn Hill project has ramped up the unit costs have reduced with the May costs running at $84.50 per tonne FOB, and importantly, the company has forecast further reductions of costs as the project operations are optimised.

These decreases are to around $68 per tonne FOB, and after copper by-product credits to around $39 per tonne FOB.

The project is now exporting two ships per month for around 145,000 tonnes, with seven shipments so far made through Port Adelaide.

The ore is from the first phase of the Cairn Hill operation, which is expected to deliver 7.9 million tonnes from two pits, generating around A$250 million of revenue per annum at current prices.

The in-pit resources at the 1.7 million tonne annual dig and ship operating is; 7.9 million tonnes at 50.5% iron, 0.39% copper - which currently represents a five year mine life.

Ore is then processed in China, with IMX Resources having a life of mine sales contract with Sichuan Taifeng.

Cairn Hill is a joint venture, with IMX Resources 51% and Sichuan Taifeng 49%.

The project is strategically located 14 kilometres to the Stuart Highway from a new access road, and 55 kilometres by road to Coober Pedy.

Access to Port Adelaide is 879 kilometres, with Mount Bonython 620 kilometres.


Cairn Hill phase two - Maiden resource imminent

Cairn Hill phase two has the potential for a low capital and operating cost project, with the company looking to fast track development leveraging off existing approvals and infrastructure.

Duncan McBain, managing director, said the development work for phase two of the project was proceeding as planned.

“Design work for the dry magnetic separation plant is well advanced and mine planning is about to commence.

“The logistics for the transport and export of the ore are mainly in place and the work has commenced for the modification of the existing Mining and Rehabilitation Plan."

The phase two metrics include;

- Production 0.8Mtpa to 1.2Mtpa first half of 2012;
- Target maiden resource mid-2011, at 8Mt to 12Mt at 45% to 50% iron; and
- Capital $5 to $10 million, with operating costs estimated at around $70 per tonne FOB.


Valuation

With the first phase of the Cairn Hill operation due to generate over $250 million, IMX Resources looks to be undervalued in comparison to its market value of $120 million.