Nevada Iron (ASX: NVI) is developing the Buena Vista Iron Project in Nevada, U.S. Buena Vista is an advanced pre-development iron ore project with potential for early production.
Richmond Mining receives key Special Use Permit to develop Buena Vista iron ore mine in Nevada
Richmond Mining (ASX: RHM) has taken a major step forward at the Buena Vista Iron Project in Nevada, U.S., with the granting of the Special Use Permit (SUP) by Churchill County.
Churchill County’s Planning Commissioners unanimously approved the (SUP) to allow development of the Buena Vista mine.
Max Nind, managing director of Richmond said, “The granting of this permit demonstrates the County’s enthusiasm for a regionally beneficial project and provides Nevada Iron with the ability to secure all Churchill County construction related permits for mine and mill infrastructure.”
Using Churchill County’s wide-ranging SUP approval, Richmond's subsidiary Nevada Iron will now complete the application process for the required permits from the State of Nevada to allow mine buildout.
Late last month in another boost for Buena Vista, Richmond signed a framework agreement with Hebei Iron & Steel Group Co., Ltd. (HBIS) to create a strategic alliance to accelerate the development of the project.
The agreement is mutually beneficial for both companies, with Richmond gaining strategic support to secure 100% of the financing for project development, and HBIS obtaining a long term stable supply of product to be underpinned by its shareholding in the company. HBIS, one of the largest steel groups in China, has a combined annual steel output of 40 million tonnes.
Strong project returns forecast
A recent Feasibility Study into Buena Vista indicated strong returns from the development of the Nevada project including an Internal Rate of Return of 41% with first production scoped for December 2012.
The study, which is based solely on accessing ore from the West deposit, investigated producing 1.75 Mtpa (million wet tonnes per annum) of concentrate for an initial 10 years of operation.
Importantly the mine will be the producer of a high grade iron ore concentrate with very low impurities, assaying 66-69% Fe; 1.5-4.5% SiO2; <1% Al2O3; 0.003% P; and 0.003% S.
The concentrate will be sent via a 40 km slurry pipeline to a rail siding located at Colado Junction, 10 kilometres northeast of Lovelock, and then transported by rail to a Port in the San Francisco Bay/Delta Region of California.
The existing resources and known exploration targets have the potential to significantly expand the Project’s life past the initial 10 years. This potential should underpin a long-life operation at Buena Vista.
At current valuation of $0.50, Richmond Mining is valued significantly below its emerging iron producer peers, with significant scope for re-rating based on near term production parameters.