Apollo Minerals (ASX: AON) is working to secure up to 2.5 million tonnes per annum in port capacity for exports of iron ore from its Commonwealth Hill Iron Project after inking a memorandum of understanding with private port operator Flinders Ports.
Carpentaria Exploration is planning to build a new 20 million tonne per annum common user iron ore export facility at Port Pirie, of which it would seek 5 million tonnes per annum of export capacity.
Apollo will assess the feasibility of exporting from Port Pirie via a transhipment arrangement similar to that employed by OneSteel (ASX: OST) at their Port Whyalla export facility in the Spencer Gulf.
The company will investigate the commissioning of a similar facility to that previously proposed by WPG Resources(ASX: WPG) but in a new location, away from the town centre of Port Pirie, which will enable the expansion of the facility to 20 million tonnes per annum.
During 2011, WPG Resources began construction on a $60 million iron ore export facility at Port Pirie designed to handle up to 7 million tonnes per annum, of which they received development approval to export 3.2 million tonnes per annum.
This facility was placed on indefinite hold post the acquisition of WPG Resources' iron ore assets by OneSteel in October last year.
Jindal Steel and Power investment
Earlier this month Apollo announced heavyweight Jindal Steel and Power, India's third largest steel producer, had agreed to a A$1 million investment giving it a 9.25% stake in the company.
Jindal Steel and Power (NSE: JINDALSTEL) is part of the US$12 billion diversified O.P. Jindal Group and is a leading player in the nation's steel, power, mining, oil and gas, and infrastructure industries with an annual turnover of US$4 billion.
The investment from Jindal sends a strong signal as to how well it perceives the upside at the Commonwealth Hill project.
Apollo plans to use the funds for the exploration and development of Commonwealth Hill, where it is focused on delivering a JORC Resource for the Sequoia prospect to fast-track the development of a medium-scale mining project.
High quality resource
The iron mineralisation at Commonwealth Hill requires a very low strip ratio, is coarse and at surface, all of which improves the economics of the project.
Further upside is the high iron recoveries, high mass yields and the large tonnages that can be produced from the project.
Commonwealth Hill has demonstrated the potential for a very large resource and a long mine life producing direct feed ore and premium pellet feed.
Drilling has identified both coarse grained magnetite and direct shipping ore style mineralisation, with intersections of 24 metres at 56% iron including 4 metres at 70% iron.
The project is located in a major iron ore province in South Australia that hosts OneSteel's Peculiar Knob mine,WPG Resources' newly acquired Giffen Well project and IMX Resources' (ASX: IXR) 7.9 million tonne at 50.5% iron and 0.39% copper Cairn Hill mine.
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