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-- The technical and financial evaluation in the Preliminary Feasibility
Study ("PFS") has concluded that, based on the information currently
available, the project is economically viable and robust and that
further project development is justified.
-- Project pre-tax real Net Present Value ("NPV") of A$456 million at an 8%
discount rate, based on a discounted cash flow model with:
-- a project life of 13 years with saleable product of 60% Fe at 2
million tonnes per annum ("Mtpa");
-- total sales of 25.77 million tonnes; and
-- no terminal value added to the NPV, which assumes no extension to
the plant and/or mine life.
-- The project is potentially highly profitable with a discounted payback
(based on NPV) in 3 years.
-- Operating costs estimated at A$78/t (rounded).
-- Total revenue estimated at A$3.238 billion (rounded).
-- First time release of a Probable Mineral Reserve of 42.95 million tonnes
("Mt") @ 47% Fe.
-- Total capital cost estimated at A$262.7 million including rehabilitation
and sustaining capital expense over life-of-mine ("LoM") of A$52.4
million and indirect capital costs of A$49.1 million.
-- Total direct operating costs (including overheads but excluding
royalties) are estimated at A$2.014 billion (rounded).
-- Total project costs (direct and indirect operating costs, capital spend
including contingency of A$27 million, and sustaining capital) are
estimated at $2.438 billion (rounded)(1).
Macarthur Minerals Limited (the "Company" or "Macarthur") is pleased to announce the receipt of the results of the PFS managed by MSP Engineering Pty Ltd ("MSP"), an independent consulting firm, for the Ularring Hematite Project that incorporates the Snark, Drabble Downs, Central and Banjo hematite deposits located within the Company's tenements in the Yilgarn region of Western Australia. The PFS has evaluated a wet beneficiation process based on Indicated Mineral Resources above a cut-off grade of 40% Fe and previously reported metallurgical test work results (news release dated June 1, 2012) as well as follow-up test work completed in July 2012.
Macarthur's President, Chairman and CEO, Alan Phillips commented that, "This study has been 11 months in development but it was important that we get it right. Macarthur does not want to be just another low grade iron ore producer. Instead we are aiming to deliver a high value iron ore product to the market and to be a Company positioned for the long term. Through beneficiation, we can fully utilise Macarthur's resource inventory and deliver a plus ten year mine life. Moving forward, Macarthur is looking for ways to reduce the capital required, for example by having the beneficiation plant, power and water infrastructure and even the new mining camp being supplied under a third party build, own, operate model and by exploring common user road and rail infrastructure with other nearby iron ore producers. Further, as we advance through the permitting processes, Macarthur is looking at options for early start production which could envisage a small scale high grade operation prior to the commencement of the beneficiation process."
(1) The PFS results are based on existing resource estimates, current iron ore pricing and market conditions and consequently, market fluctuations, varied logistics or production costs or recovery rates may render the results of past and future project studies uneconomic and may ultimately result in a future study being very different.
A summary of the PFS results is attached to this release and an updated National Instrument ("NI 43-101") Technical Report, which includes the results of the NI 43-101 Hematite Mineral Resource (news release dated June 29, 2012) will be filed on SEDAR within 45 days of this news release.
On behalf of the Board of Directors,
MACARTHUR MINERALS LIMITED
Alan Phillips, President, Chairman & CEO
Macarthur Minerals Limited is an Australian based resource development company currently focused on developing its Ularring Hematite Project, located in the Yilgarn iron ore district in Western Australia. The Ularring Hematite Project is located 110 km from rail infrastructure with a direct connection to the iron ore exporting Port of Esperance, Western Australia.
Macarthur's Moonshine Magnetite Project has an inferred Mineral Resource of 1.3 Bt at 30.1% Fe (press release dated December 15, 2010; NI 43-101 Technical Report dated March 25, 2011).
Positive Preliminary Economic Assessments were released to the market for the Ularring Hematite Project in November 2011 (press release dated November 21, 2011; Technical Report dated January 4, 2012) and for the Moonshine Magnetite Project in February 2011 (press release dated February 7, 2011, Technical Report dated March 25 2011).
ABOUT MSP ENGINEERING PTY LTD
MSP Engineering Pty Ltd is a Western Australian based resource development consultancy specialising in the evaluation, engineering design, project management and construction of mineral processing facilities and associated infrastructure, both in Australia and overseas.
Previously known as McSweeney Partners Pty Ltd, with over 40 years' experience as a leader in its field, MSP has established a reputation for providing simple, innovative and cost efficient solutions that successfully deliver projects which consistently exceed client expectations and performance targets.
MSP has a fully equipped engineering facility with dedicated professional and para-professionals including process, mechanical, structural, civil and electrical engineers, design managers, draftspersons, project managers, construction managers, supervisors and project controllers. Further information is available at http://www.mspengineering.com.au/.
ABOUT CSA GLOBAL PTY LTD
CSA Global Pty Ltd is a leading geological, mining and management consulting company whose staff includes geologists, mining engineers, project managers, data management professionals and technical personnel. CSA has been operating from Perth, Western Australia since 1986. It is an independent company, with origins dating back to 1984 as part of the CSA Group founded in Ireland. CSA now has offices in the UK, Indonesia, Johannesburg, Vancouver, Darwin and Brisbane. CSA has a high level of expertise in most mineral commodities gained from over twenty years' experience within the exploration and mining industry at an international level. It has experience in all stages of the mining cycle from project generation to production. For further information regarding CSA Global, please refer to the company website at www.csaglobal.com
Caution Regarding Forward-Looking Statements
Certain of the statements made and information contained in this press release may constitute forward-looking information and forward-looking statements (collectively, "forward-looking statements") within the meaning of applicable securities laws. The forward-looking statements in this press release relate to future events or future performance and reflect the current expectations, assumptions or beliefs of the Company based upon information currently available to the Company and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "outlook", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology.
With respect to forward-looking statements contained in this press release, assumptions have been made regarding, among other things, the reliability of information prepared and/or published by third parties that are referenced in this press release or was otherwise relied upon by the Company in preparing this press release. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct as actual results or developments may differ materially from those projected in the forward-looking statements. There is no assurance that the results of the pre-feasibility metallurgical test work will be replicated in actual production conditions or that the IRR or NPV will be as projected. Factors that could cause actual results to differ materially from those in forward-looking statements include, among other things, unforeseen technology changes that results in a reduction in iron or magnetite demand or substitution by other metals or materials, the discovery of new large low cost deposits of iron magnetite and the general level of global economic activity, changes in project parameters as plans continue to be refined, future prices of mineral resources, possible variations in ore reserves, grade or recovery rates; accidents, dependence on key personnel, labour pool constraints, labour disputes, delays in obtaining governmental approvals or financing or in the completion of development or construction activities, and other risks of the mining industry. Readers are cautioned not to place undue reliance on forward-looking statements due to the inherent uncertainty thereof. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. The forward-looking statements contained in this press release are made as of the date of this press release and except as may otherwise be required pursuant to applicable laws, the Company does not assume any obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
To view the Ularring Hemetite Project Pre-Feasibility Study Results Summary, please visit: http://media3.marketwire.com/docs/macarthur-summary.pdf.
- Western Australia
Macarthur Minerals Limited
President, Chairman & CEO
+61 418 726 230
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