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IronClad Mining secures Lucky Bay port access for Wilcherry Hill JV Iron Ore project

IronClad Mining (ASX: IFE) has exercised its option held with Sea Transport Corporation over the port facilities at Lucky Bay in South Australia, moving the company closer to a two stage trans-shipping operation due to commence in early 2012.

On May 3 IronClad signed the option agreement to ship iron ore from a holding warehouse at Lucky Bay to a floating harbour, located about 5-10 kilometres offshore South Australia.

Importantly, the option gives the company full access to a designated 50 hectare site, with harbour frontage and full usage of the port itself.

The company can now accelerate its plans to get into cape size vessels at the earliest possible time utilizing the planned floating harbor. This is expected to be possible within two years, which will positively affect the economics of the project for the company.

The innovative development of a multi user port and floating harbour off the coast of South Australia will boost Wilcherry Hill JV Iron Ore project economics with lower transport costs. Production is due to commence with direct shipping magnetite ore (DSO) export later this year, upon South Australian government approvals.

The Wilcherry Hill project is an 80:20 joint venture between IronClad and its associated company Trafford Resources (ASX: TRF), is situated near Kimba on the Eyre Peninsula, and would also strengthen economic growth and employment opportunities in the region.

The project will start relatively small by iron ore industry standards, however it will be producing a premium grade product and it is planned to expand rapidly, in three stages, to a total production target over 10-12 million tonnes of iron ore a year.

Stage one will see IronClad’s DSO transported in customised containers, by road from Wilcherry Hill, to its harbourside facility.

Initially, the containers will be loaded onto a specially designed barge and powered by tug to waiting Panamax size vessels anchored 5–6 Kilometres offshore. Onboard cranes will load the ore by tipping the containers into the holds.

IronClad has acquired the tug which is currently being fully refurbished in Queensland and construction of a purpose built barge will commence shortly.

Stage one loading will be augmented in 2012 by the addition to the fleet of a powered feeder vessel capable of delivering up to 12,000 tonnes per day.

The design of the feeder vessel will be compatible to its eventual role as feeder to IronClad’s proposed floating harbour. In all, two feeder vessels are planned for completion by the time the floating harbour is commissioned.

Stage two transshipment of ore will commence from Lucky Bay when the proposed floating harbour is commissioned. It will anchor about 10 kilometres offshore and will be capable of docking full cape size (150,000 tonne capacity) vessels.

A negatively pressurised storage shed will be constructed onshore from which the two feeder vessels will ferry ore. The floating harbour will have the capacity to store, onboard, up to 100,000 tonnes of ore, also in a negatively pressurised environment.

With two feeder vessels delivering a further total of 24,000 tonnes per day a fast loading time of around 4 days can be anticipated.

The floating harbour design has commenced. Once construction begins it is anticipated that the build time will be approximately 18 months.

Commissioning will be aimed to coincide with upgraded throughput from the mine in late year two or early year three.

The South Australian Government, has already supported the multi-user harbour concept under Section 49 of the Development Act, which facilitates approvals for infrastructure projects considered essential to the South Australia’s development.

Sea Transport Corporation is currently preparing a comprehensive development application utilising key design and environmental impact assessment specialists.

The company expects final government approval for the port at the end of 2011.

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