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Shree Minerals Caps Busy Quarter, For Production Of DSO Iron Ore

Next iron ore miner in Australia, Shree Minerals (ASX:SHH) is edging closer to commencing mining of Direct Shipping Ore (DSO) from the Nelson Bay River Iron Project.

The September quarter was one of advancement at NBR in north west Tasmania with work undertaken at the site including:

- access road, bridge,
- clearance of Waste Dump & DSO pit,
- construction of infrastructure areas,
- environment dams & drains,
- water treatment plant

All steps for compliance of various approval conditions have been taken readying for production to commence in the current quarter.

Recruitment of personnel has been done & all necessary contracts finalised for mining, crushing & transportation of ore.

Cash at end of the September quarter was $2.24 million, excluding the Security Deposit for Rehab Bonds of A$ 247,122 for Mining & Exploration leases.

Resource base

Nelson Bay River currently has a goethite hematite Inferred Resource of 1.4 million tonnes, magnetite Resources of 7.8 million tonnes at 38.3 DTR. Production is expected to be about 400,000 tonnes per annum.

The hematite ore is similar to ore found in Western Australia's Pilbara region; very low alumina and a premium product and easy to extract. The production schedule for the first stage of the project is to develop two relatively shallow open cut mines to produce direct shipping grade hematite ore, which will require just crushing and sizing.


With the iron ore price for 62% Fe iron sitting at a robust US$133 a tonne, when translated into local currency, a price in Australian dollars of A$140.30 provides a very strong outlook for revenue generation for Shree as it becomes the next iron ore producer in Australia.

Even allowing for the discount for expected grade of 58% Fe it provides compelling cash flow generation.

In fact, the financial metrics have improved since as the iron ore price has recovered. The project benefits from low capex and low opex. The share register is also tight, leveraging it to news flow with a low issued capital.

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