Bushveld unveils details of scoping study at iron ore project

AIM-listed Bushveld Minerals has unveiled details of a scoping study for the initial development phase of its Bushveld Iron Ore project in South Africa.

In an operational update issued on Monday, the company reported that a scoping study had delivered an initial low capital expenditure project which resulted in first phase cashflows that could be "leveraged to unlock the larger potential inherent in exploiting the deposit along strike and to lower depths, as well as pursuing downstream beneficiation opportunities".

The scoping study was undertaken on the P-Q Zone only, equating to 12% of the total JORC resource and a low capex and concentrate product route at base Run of Mine of 5.0m tonnes per annum (Mtpa) were recorded.

A capex of $126m was detailed and net present value of $140m at 12.5% discount rate.

The payback was detailed as two years from the start of mining and the project was well-positioned relative to existing infrastructure.

Commenting on the Scoping Study, Fortune Mojapelo, the company's Chief Executive Officer, said: "We are delighted to present the positive scoping study results for our Bushveld Iron Ore Project in South Africa. We have chosen to adopt an initial low capex route to enable the company to reach production and cash flows in a shorter time horizon.

"We believe our approach is low risk, particularly given the challenging global markets for project financing. Yet the project retains the flexibility to scale up the mining operations and the option of developing modular integrated pig iron or steel facilities. The pre-feasibility studies that are due to commence in May will investigate these options further and we look forward to presenting the PFS results in Q1 2014."

Bushveld Minerals' share price was up 1.18% to 10.75p at 08:47 on Monday.

MF