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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| First Star Resources | TSXV:FS | TSX Venture | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
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Hot Features
Premium
THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
Macarthur Minerals Limited (TSX:MMS)(OTCQX:MMSDF) (the "Company" or
"Macarthur"), is pleased to announce an update to the Ularring Hematite Project
(the "Project") based upon revised cost estimates, resulting in reduced opex and
capex estimates.
Background
Like most junior resources stocks, Macarthur faced challenging market conditions
in 2013. Despite such conditions, Macarthur has continued to advance the Project
throughout the past year and has de-risked major project delivery areas like the
exploration, permitting and port access. This continued focus on de-risking has
positioned the Company to quickly advance the Project and Company as the global
resource equities market recovers.
In September 2012, Macarthur released its Prefeasibility Study ("2012 PFS")
(press release dated August 16, 2012; technical report titled "Pre-Feasibility
Study Ularring Hematite Project Western Australia" dated September 27, 2012) for
the Project, which focused on mining 2 million tonnes per annum ("Mtpa") of
hematite/goethite iron ore from the Snark, Drabble Downs, Central and Banjo
deposits located within the Company's tenements in the Yilgarn region of Western
Australia. The 2012 PFS outlined a wet beneficiation process that would produce
a +60% Fe sinter fines product featuring low levels of the deleterious elements
of Silica, Alumina, Phosphorus and Sulphur. The 2012 PFS study anticipated a
bulk ore body mining plan and a combined crushing, de-sliming, gravity and
magnetic beneficiation circuit. The final product would then be road hauled 110
kilometers on a public road to a rail siding south of the town of Menzies, a
township located 100 kilometers east of the Project. From here the iron fines
would be transported along existing rail infrastructure to the Port of Esperance
for export.
The technical and financial evaluation in the 2012 PFS concluded that, based on
the information currently available, and subject to the qualifications contained
in such report, the Project is economically viable and robust and that further
project development is justified.
Revised Cost Estimates
Based on ongoing work conducted on the Project, Macarthur has and continues to
re-evaluate the development of the Project and has identified certain elements
of the 2012 PFS that have been revised, including:
-- reducing the estimated operating cost to A$68/tonne ("t") shipped free
on board ("FOB");
-- increasing annual production tonnage from 2 Mtpa to 4 Mtpa;
-- the development of a dedicated private haul road route for which the
Company has secured tenure; and
-- a new, larger rail siding site awaiting new tenure to be granted to the
Company at Menzies.
Further, metallurgical testing and ore characterisation work undertaken by
Macarthur during 2013 has also opened up the possibility for those iron ore
resources that are more amenable to gravity separation (i.e. haematitic ores) to
be mined and processed separately to the geothitic ores that beneficiate best
from a magnetic separation. Such an approach during the first 2-3 years of mine
production could result in lower capital and/or operating costs compared to
those identified in the 2012 PFS.
Macarthur has, over the course of 2013, attracted the interest of major contract
mining services and logistics companies who have submitted written costings for
the provision of core services. This has been achieved through a successful
Expression of Interest Program ("EOI") for core mining, processing, road and
rail transport services. The slowdown in the mining and transport services
industries in Western Australia during 2013, has resulted in anticipated core
cost savings in the areas of mining, road and rail transport and enabled the
Company to revise certain cost-estimates compared to the 2012 PFS.
The revised cost estimates are as follows:
----------------------------------------------------------------------------
2013/2014
2012 PFS Revised Estimate
A$ A$
----------------------------------------------------------------------------
Opex (/t FOB) 78.14 68.10
----------------------------------------------------------------------------
Capex (million) 262.7 226.4
----------------------------------------------------------------------------
A summary of the key 2012 PFS results compared to new estimates obtained during
the 2013 evaluation is attached.
No new economic assessment has been undertaken beyond the 2012 PFS economic
analysis. New reserve estimations and a full economic reassessment will be
undertaken as a part of the Feasibility Study ("FS"), which Macarthur plans to
complete in 2014. Consequently, the results and implications of the 2013 updates
described herein will not be fully understood until the FS has been completed.
Macarthur's President, Chairman and CEO, Alan Phillips commented that, "The work
completed during 2013 is expected to further enhance the potential of the
Project. Even without fully detailed revised economics, this work has enabled us
to further fine tune and adjust our strategy".
QUALIFIED PERSON
Mr Ian S Cooper, B.Sc., A.R.S.M., F.G.S. FAusIMM, a Fellow of the Australasian
Institute of Mining and Metallurgy (membership number 107348), is a part time
employee of Macarthur and is a Qualified Person as defined in National
Instrument 43-101. Mr Cooper is in charge of Macarthur's exploration programs
and has reviewed and approved the technical information contained in this news
release.
ABOUT MACARTHUR MINERALS LIMITED (TSX:MMS)(OTCQX:MMSDF)
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.
A Positive Preliminary Feasibility Study was released to the market on the
Ularring Hematite Project in August 2012, which included an indicated mineral
resource of 54.46 Mt at 47.2% Fe and an inferred mineral resource of 25.99 Mt at
45.4% Fe and a probable mineral reserve of 42.95 Mt at 47% Fe (press release
dated August 16, 2012, 2012 PFS).
In addition, a Positive Preliminary Economic Assessment on the Moonshine
Magnetite Project was released in February 2011, which included an inferred
mineral resource of 1.3 Bt at 30.1% Fe (press release dated February 7, 2011,
technical report titled "N143-101 Technical Report on Lake Giles Iron Ore
Project, Western Australia" dated March 25, 2011).
Macarthur currently has 44,820,630 shares, 3,155,000 options and 250,000
warrants outstanding. As reported in the Company's Interim Financial Statements
for Quarter Ended 30 September 2013, Macarthur had A$6.2 million in cash.
On behalf of the Board of Directors,
MACARTHUR MINERALS LIMITED
Alan Phillips, President, Chairman & CEO
UPCOMING EVENTS
MACARTHUR will be attending the 2014 Prospectors and Developers Association of
Canada (PDAC) International Convention and Investors Exchange in Toronto, March
2-5 at the Metro Toronto Convention Centre, South Building.
We invite you to meet the Macarthur team at Booth #2818. The conference will
provide current and prospective shareholders an opportunity to speak with
management about the Company's recent developments.
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. All statements herein, other than statements of historical
fact, that address activities, events or developments that the Company believes,
expects or anticipates will or may occur in the future, including but limited to
statements regarding: the proposed strategy regarding core mining, road and rail
inputs at the Project; anticipated increases in annual production at the
Project; anticipated decreases in Project costs; the possible reclassification
of current inferred mineral resources on the Project as indicated mineral
resources in the future; expected completion of the FS on the Project containing
a new reserve calculation and a new economic assessment; the granting of a
license for the Menzies rail siding; the status of the MRRT; and plans to secure
mining approvals under the Mining Act, are forward-looking statements. The
forward-looking statements in this press release reflect the current
expectations, assumptions or beliefs of the Company based upon information
currently available to the Company. 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.
Factors that could cause actual results to differ materially from those in
forward-looking statements include but are not limited to: 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; the general level of global economic activity; future changes in
strategy regarding core mining, road and rail inputs with respect to the
Project; final Project costs varying from those determined from the EOI program;
failure to successfully negotiate a BOO arrangement for the Project; failure to
complete the FS; failure of the FS to reflect currently anticipated increases
annual production and decreases in expected costs at the Project; the results of
infill drilling being insufficient to reclassify current inferred mineral
resources on the Project as indicated mineral resources; failure to receive a
license for the Menzies rail siding; failure to repeal the MRRT; and failure to
obtain mining approvals under the Mining Act. 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.
Ularring Hematite Project Revised Cost Estimates
This update is not to replace the 2012 PFS but is solely to update the market on
changes in strategy and core mining, road and rail inputs.
1. Preliminary Feasibility Study 2012 And 2013/14 Operating Cost Update
Table 1 below provides an overview of the outcomes of the 2012 PFS and the
variation from project optimisation during 2013. No new economic assessment has
been undertaken beyond the 2012 PFS economic analysis. New reserve estimations
and a full economic reassessment will be undertaken as a part of the FS, which
Macarthur plans to complete in 2014. Consequently, the results and implications
of the 2013 revisions described below will not be fully understood until the FS
has been completed.
Table 1. 2012 PFS and 2013/14 Revised Estimates
----------------------------------------------------------------------------
2013/14 Revised
Categories 2012 PFS Estimates Comments
----------------------------------------------------------------------------
Project pre-tax No new economic
real Net Present A$456 million assessment has been
Value ("NPV")8% ("M") undertaken.
----------------------------------------------------------------------------
Opportunity to
simplify the process
flow sheet for the
processing of
selectively mined
ore. This would
enable the proposed
staged approach to
the Project's
Beneficiation Yes Yes development.
----------------------------------------------------------------------------
The 2012 PFS is based
on indicated mineral
Reduced mine resources only. The
life to Project also has
account for inferred mineral
increased resources which were
annual not included in the
Project Mine Life 13 years production. 2012 PFS.
----------------------------------------------------------------------------
Discounted Project
Payback 3 years
----------------------------------------------------------------------------
A$3.238
Total revenue billion
----------------------------------------------------------------------------
Reduction in
transport and mining
Operating Costs costs and a
(FOB) (excluding simplification of the
WA Government process circuit have
royalties and contributed to lower
other taxes) A$78/t A$68/t Opex.
----------------------------------------------------------------------------
Study accuracy +/- 20 - 25%
----------------------------------------------------------------------------
2013 metallurgical
testwork has
identified an
alternative
beneficiation process
that may vary the end
Target of product grade from
58% Fe - the reported PFS
End product grade 60.1% Fe 60% Fe specification.
----------------------------------------------------------------------------
Sale Product Tonnes 2 Mtpa 4 Mtpa
----------------------------------------------------------------------------
Geotechnical review
in the FS will focus
Waste to Ore Ratio on reducing this
(t:t) 1.4:1 1.4:1 waste to ore ratio.
----------------------------------------------------------------------------
2. Resource Base
The 2012 PFS was based on the combined indicated mineral resources of Snark,
Drabble Downs, Central and Banjo being 54.46 Mt at 47.2% Fe, as detailed in
Table 2 and Table 3 (press release dated August 16, 2012; 2012 PFS) above a 40%
Fe cut-off (50% at Moonshine).
The inferred mineral resource, also shown in Table 2, was excluded from the
economic analysis contained in the 2012 PFS for the purpose of mine planning,
life of project and financial evaluation.
Table 2. Mineral Resources, Ularring Hematite Project. Fe greater than 40%
----------------------------------------------------------------------------
Tonnes
Category Mt Fe % P % SiO2% Al2O3% LOI % S %
----------------------------------------------------------------------------
Indicated 54.46 47.2 0.06 16.9 6.5 7.9 0.16
----------------------------------------------------------------------------
Inferred 25.99 45.4 0.06 20.6 6.0 7.2 0.09
----------------------------------------------------------------------------
Note: The mineral resource was estimated within constraining wireframe
solids encapsulating banded iron formation ("BIF") strata. The resource is
quoted from blocks above 40% Fe cut-off grade, except Moonshine where
resource is quoted from blocks above 50% Fe. Differences may occur due to
rounding. Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability. See the 2012 PFS for more information.
Table 3. Mineral Resources, by Deposit, Ularring Hematite Project. Fe greater
than 40%
----------------------------------------------------------------------------
Reporting
cut-off
grade Tonnes
Deposit (Fe%) Category Mt Fe % P % SiO2% Al2O3% LOI % S %
----------------------------------------------------------------------------
Snark 40 Indicated 21.83 47.2 0.07 17.5 6.1 7.7 0.15
---------------------------------------------------------------
40 Inferred 10.96 45.2 0.07 21.8 5.1 6.8 0.09
----------------------------------------------------------------------------
Drabble
Downs 40 Indicated 11.07 47.2 0.06 16.6 6.4 8.3 0.26
---------------------------------------------------------------
40 Inferred 0.36 43.6 0.05 24.0 4.8 7.8 0.09
----------------------------------------------------------------------------
Central 40 Indicated 15.09 47.0 0.05 16.2 7.2 8.1 0.12
---------------------------------------------------------------
40 Inferred 10.19 45.3 0.05 20.3 6.3 7.5 0.08
----------------------------------------------------------------------------
Banjo 40 Indicated 6.47 47.8 0.06 16.7 6.6 7.4 0.14
---------------------------------------------------------------
40 Inferred 3.88 45.4 0.06 18.7 7.6 7.9 0.09
----------------------------------------------------------------------------
Moonshine 50 Inferred 0.60 53.0 0.06 13.4 6.7 6.1 0.15
----------------------------------------------------------------------------
Note: The mineral resource was estimated within constraining wireframe
solids encapsulating BIF strata. The resource is quoted from blocks above
40% Fe cut-off grade, except Moonshine where resource is quoted from blocks
above 50 Fe%. Differences may occur due to rounding. Mineral Resources that
are not Mineral Reserves do not have demonstrated economic viability. See
the 2012 PFS for more information.
No resource update has been attempted but during 2013, geological field work has
identified additional hematite/goethite style mineralisation.
3. Mineral Reserves Estimate
The Mineral Reserves determined from the results of the 2012 PFS are estimated
in Table 4 below.
Table 4. Mineral Reserve Estimate
----------------------------------------------------------------------------
Tonnes
Deposit Classification Mt Fe % P % SiO2% Al2O3% LOI% S%
----------------------------------------------------------------------------
Snark/ Drabble
Downs Probable 26.24 47.0 0.06 15.4 6.4 8.1 0.20
----------------------------------------------------------------------------
Central Probable 11.18 46.6 0.05 14.7 7.5 8.3 0.14
----------------------------------------------------------------------------
Banjo Probable 5.53 47.5 0.06 15.7 6.4 7.4 0.15
----------------------------------------------------------------------------
Total Probable 42.95 47.0 0.06 15.2 6.7 8.1 0.18
----------------------------------------------------------------------------
Mineral Reserve Estimates are based on the mineral resource model and the
key assumptions and parameters as outlined in the 2012 PFS. The Mineral
Reserves constitute 70% of the total Indicated Mineral Resources. See the
2012 PFS for more information.
4. Metallurgy & Processing
Since the 2012 PFS was completed additional testwork has been commissioned and
will be reported once the analysis is complete. Further testwork is also planned
to evaluate the suitability of a simplified flowsheet for the processing of
selectively mined ore to enable a staged approach to the Project development.
This may result in new end product specification and characteristics that will
differ from the end product specification in the 2012 PFS.
Current process program & opportunities
Since the 2012 PFS was completed, additional drilling, mineralogical studies and
logging of ore characteristics continue to increase the understanding of the
Project's geology. This has allowed for more refined discrimination of potential
ore types that appear to respond differently through the beneficiation circuit.
Consequently, an alternative flow sheet was developed by a leading independent
provider of mineral processing solutions for the processing of selectively mined
ore to enable a staged approach to the Project development.
The simplified flow sheet involving crushing, screening and gravity separation
serves to reduce the complexity of the circuit whilst delivering the potential
for a reduction in both operating and capital costs.
Additional testwork was commissioned in December 2013 and results will be
reported once the analysis is complete.
5. Mining
The low compressive strength characteristics of the Project's deposits and waste
material lend themselves to both continuous mining and conventional mining
methods, with minimal blasting required. Conventional excavate, load and haul
method was chosen based on both operational and cost factors. Contract mining
was assumed and operating cost estimates have been sourced from contract miners.
No new optimisation studies have been prepared although cost estimates are based
on an increased annual production rate utilising the assumptions from the 2012
PFS. Recent quotations for mining services have reduced the cost/tonne of
product from A$16.11/t to A$14.31/t. Further cost savings are anticipated
through a reduction in the strip ratio, which is currently based on conservative
parameters and wall slopes.
A new mine production schedule will be prepared for the FS based on the
anticipated higher annual production rates.
6. Project Infrastructure
As set out in the 2012 PFS, the Project would comprise a fully serviced remote
area mining and processing hub that will be supported by a fly-in fly-out work
force supplemented by local Kalgoorlie personnel.
As such, the Project will require the following key infrastructure requirements:
-- dedicated on site power generation by a third party provider;
-- remote borefield and on-site water treatment plant for water supply;
-- remote area accommodation facility;
-- remote area mine administration centre;
-- dedicated communication network; and
-- a dedicated stockpile area at the rail siding which will be capable of
stockpiling up to 200,000 tonnes of concentrates and loading 115+ tonne
ore wagons.
The rail siding will be operated and maintained by a third party.
7. Logistics
Subsequent to the 2012 PFS, in 2013 detailed investigation of the benefits of
increasing the annual production prevented Macarthur from using a public road to
haul to the Menzies rail siding. Consideration of a private haul road identified
a cost benefit in larger tonnage road trains and capital cost has reduced by
adopting this strategy. Tenure (in the form of a Miscellaneous Licence) has been
granted to the Company, securing the 110 kilometer haul road route, which
reduces the cost per tonne of product from the 2012 PFS figure of A$11.73/t to
A$9.84/t. Based on recent quotations, the capital required would be reduced from
A$32.4 million to A$23 million.
Road haulage would be along a private haul road utilising quad road trains with
side tip trailers. The concentrate ore will be stockpiled adjacent to the rail
siding in 2 x 30 kilotonne stockpiles before being rail transported by standard
ore wagons to the port followed by unloading by rotary car dumper, stockpiling
in a covered shed, reclaimed and loaded onto vessels via the No. 3 berth ship
loader.
8. Port
The Project is centrally located between a number of ports in Western
Australia's South West. Previous analysis (in the November 2011 Preliminary
Economic Analysis) identified that the Port of Esperance ("Port") offered the
best option with rail access, good vessel size capabilities, rail infrastructure
and available present and /or future export capacity. At some 510 kilometers
from the Project, the Port remains the preferred option for export of the
Project's product.
The Port currently exports approximately 11 Mtpa of iron ore and the Western
Australian Government has approved an in principle expansion of export capacity
at the Port by up to an additional 20 Mtpa. This proposed expansion will follow
the A$120 million road rail transport corridor upgrade currently under
development into the Port.
During 2013, the Esperance Port Authority (the "EPSL") continued its expansion
process and bids were lodged by two shortlisted consortia in November 2013. The
announcement of the successful proponent is expected in first quarter 2014.
The expansion, which will result in a Multi User Iron Ore Facility, is expected
to commence construction in 2014 and to be in operation by 2015. The facility
will be operated by the successful proponent.
The Project has a Capacity Reservation Deed with the EPSL for use upon the
completion of EPSL's proposed expansion. Macarthur is positioning itself to
commence production at the time of completion of the expansion.
9. Operating Costs
Operating costs have been estimated on the basis that mining operations will be
carried out by a contractor under the Company's supervision for geology, grade
control and survey. Processing and transport to the rail siding could be
undertaken on a build, own operate and/or transfer ("BOO/T") basis by a third
party, while rail haulage to the Port will be contracted by a third party, and
port operations will be undertaken by EPSL.
As previously outlined, in 2013, Macarthur ran a successful EOI for core
contracting services to refine the cost basis in response to current market
conditions and changes to the project aimed at increased efficiency. A number of
potential contractors were engaged to provide proposals for services including
road and rail haulage, processing, mining, camp operations and water treatment.
All costs provided are based on the assumptions and design criteria of the 2012
PFS, visits to site and contractor experience at similar operations within the
region.
Cost savings were achieved across all components of the Project with the most
significant savings being realised in the road and rail haulage. A geotechnical
program is planned to be undertaken as part of the FS with the aim to reduce the
strip ratio. As pits are relatively shallow (40 meters) and short-lived, there
is great scope to reduce waste mining and hence mining cost.
Average mine operating cost (excluding royalties) is estimated to be A$68/tonne
to produce 58%-60% Fe saleable product delivered FOB to Port. A summary of
estimated operating costs elements is shown in Table 5 below.
Table 5. Estimated Operating Costs
----------------------------------------------------------------------------
2012 PFS 2014 Estimate
A$/t shipped FOB A$/t shipped FOB
----------------------------------------------------------------------------
Mining 16.11 14.31(1)
Processing 10.64 9.47(2)
Product Transport(3) 46.58 39.51(4)
Overheads 4.81 4.81
----------------------------------------
Total Estimated Operating Costs 78.14 68.10
----------------------------------------------------------------------------
(1) Estimate based on quotation from mining services company
(2) Estimate based on reduced processing costs from revised process flow
sheet
(3) Product transport is inclusive of road and rail freight and port
handling charges
(4) Estimate based quotation from haulage company (approx. A$0.07 tonne/km)
and quotation from rail provider
10. Capital Cost Estimate
Since the 2012 PFS was published, the Company has examined the construction of a
private haul road to reduce haulage costs. The private haul road offers a
shorter, more direct route from site to the rail siding and is not subject to
design and maintenance criteria imposed on public roads. In addition, the
Company has embarked on a testwork program to selectively mine and process
various ore types in a staged approach to the development of the project. Both
the change in road alignment and processing strategy has resulted in an
anticipated reduction in capital costs compared to the 2012 PFS.
The EOI process has highlighted the interest of contractor services for mineral
processing, project water supply infrastructure, site accommodation
infrastructure and rail siding development and operation including on a BOO/T
basis. Discussions are ongoing and preferred suppliers will be selected in due
course.
Capital costs over the life of the Project including sustaining capital expense
totalling A$52.4 million incurred in years 2021, 2025 and 2027 were estimated in
the 2012 PFS and include sustaining capital of A$50.7 million for
rehabilitation. These cost estimates have reduced due to changes in the Project
layout that result in less vegetation clearing and therefore, less
rehabilitation required.
Total revised capital estimated for the Project, as set out in Table 6, is split
between the owner's (Macarthur) costs and costs attributable to potential
contract service providers under BOO/T arrangements. Under a BOO/T arrangement a
third party contractor would build and operate the infrastructure and Macarthur
would pay the third party to use it. This removes higher upfront capital costs
from commencement of the Project and the third party would receive the benefit
over the life of the infrastructure. The additional operating costs are built
into the estimated revised per tonne opex numbers above.
The figures below are estimates based upon revised quotations due to the
changing market place and do not reflect a new economic analysis that replaces
the 2012 PFS. The results and implications of a BOO/T arrangement will not be
fully understood until the FS has been completed.
Table 6. Capital Costs
----------------------------------------------------------------------------
2012 PFS 2013/2014 Revised Estimates
-----------------------------------------
Owner BOO/T(i) TOTAL
Direct Costs A$M A$M A$M A$M
-----------------------------------------
Mine (including mobilisation and
technical services) 3.4 3.4 - 3.4
Processing plant 66.5 - 49.5 49.5
Tailings storage facility - 9.1 - 9.1
On-Site infrastructure 20.7 20.7 - 20.7
Off-Site infrastructure 17.4 6.9 10.4 17.3
Product transport and logistics 46.2 23.0 13.7 36.7
Construction facilities 4.0 4.0 - 4.0
General spares and services 3.0 - 3.0 3.0
-----------------------------------------
Subtotal Direct Costs 161.2 67.1 76.6 143.7
Sustaining capital over LoM 52.4 30.0 - -
-----------------------------------------
Sub-total Direct Costs over LoM 213.6 97.1 76.6 173.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other Costs
Engineering Procurement &
Construction Management 16.5 13.5 - 13.5
Owner's costs 5.2 4.2 - 4.2
Contingency 27.4 35.0 - 35.0
-----------------------------------------
Sub-total Other Costs 49.1 52.7 - 52.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total Capital Costs 262.7 149.8 76.6 226.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) The estimates should be considered to be +/-20% order of accuracy.
(i) Potential third party contractor contribution under BOO/T
11. Government policy and taxation
The Australian Government introduced the Mineral Resource Rent Tax ("MRRT") for
coal and iron ore projects, effective from July 1, 2012. The impact of MRRT was
included in the 2012 PFS financial analysis.
The Australian Government implemented a carbon pricing mechanism under the Clean
Energy Legislation Package, which commenced on July 1, 2012. The impact of the
Carbon Tax however was not factored into the financial analysis for the Project.
The Australian Government elected in September 2013, has publicly stated that it
intends repealing the MRRT and the Clean Energy Legislation Package and has
opened repeal legislation for public comment. If approved in parliament the MRRT
and the carbon pricing mechanism would cease from July 1, 2014.
12. Approvals and Environment
On October 24, 2013, the Company received environmental approval from the
Western Australian Government under the Environmental Protection Act 1986 (WA)
based on the Company's proposal to develop an iron ore mine and associated
infrastructure at the project location (refer to news release October 29, 2013).
The Company is now in the process of completing a mining proposal for submission
to the Department of Mines and Petroleum for approval to mine under the Mining
Act (1978) (WA). The Company's objective is to secure these mining approvals in
early 2014 which will allow for commencement of the Project.
FOR FURTHER INFORMATION PLEASE CONTACT:
Macarthur Minerals Limited
Alan Phillips
President, Chairman & CEO
+61 418 726 230
aphillips@macarthurminerals.com
www.macarthurminerals.com
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