Venture Minerals Ltd has decided to start operations at the Riley iron ore project, in Tasmania, Australia, using dry screening as a way of realising early cash flow.
The company’s Board of Directors has delivered a positive final investment decision (FID) for the mine prompting preparations for mining and dry screening operations to commence immediately, the company said. This could see mining occur in the next week.
“The dry screening operations of the Riley mine is part of the ramp-up phase of the project with the full production rate to occur upon successful commissioning of the wet processing plant (which is subject to financing),” Venture Minerals said.
It is another key milestone on the company’s push towards its first shipment of Riley ore.
The company recently signed a Port Access Agreement with TasPorts and signed the Road Access Agreement with Hydro Tasmania, securing the pathway for Riley output from mine gate to shipping.
The Riley mining team has commenced preparations for low cost mining and dry screening activities given the zero strip ratio (iron ore at surface) characteristics of the Riley DSO deposit, it said. “The contracting of a dry screening plant for processing the top layer of the Riley deposit affords the company the opportunity to accelerate production and capture the current iron ore prices before the wet screening plant has been built and commissioned, and also reduce the capital cost requirements,” it added.
Venture is now finalising discussions on financing options including a debt facility to fund capital to complete construction of the wet screening plant at Riley. It is also focused on concluding the road haulage tender process as well as achieving more efficient ore handling logistics, including finalising negotiations on gaining access to other on-wharf storage.
The current Riley mine economics are well above the August 2019 feasibility numbers, which were based on a $90/t 62% Fe price, according to Venture. This is due primarily to higher iron ore prices (>$120/t 62% Fe price) and lower fuel prices, and further supported by a strong iron ore market outlook, it said.
At the $90/tonne 62% Fe price, the August 2019 feasibility study returned a post-tax cash surplus of A$31 million ($22 million) over the two-year production life of the mine.