Centrex Metals strengthens partnership with WISCO with JV agreement for proposed port
Centrex Metals (ASX: CXM) will form a joint venture partnership with Wugang Australian Resources Investment (WARI), a subsidiary of major China steelmaker Wuhan Iron and Steel Company, to design, build and operate the proposed Port Spencer.
Importantly, the joint venture agreement further strengthens the relationship between WISCO and Centrex, which are already partners in the Eyre Peninsula Joint Venture.
Port Spencer has been assigned major development status from the South Australian Government and will export iron ore and grain from the Eyre Peninsula, providing effective access to international markets.
The port would be capable of loading cape size vessels of up to 200,000 tonnes and would have a shiploader rate of 5,000 tonnes per hour for ore. Long term, there would also be the provision for rail access.
Potential customers of the port would include Eyre Iron, the 60/40 joint venture between WISCO and Centrex, which is targeting the export of 5 million tonnes per annum, Free Eyre, a consortium of Eyre Peninsula grain growers expecting to export at least 500,000 tonnes of grain per year, and iron ore explorer Iron Road, which has expressed interest in exporting magnetite via Port Spencer.
Port Spencer Pty Ltd, the joint venture company, will be owned 50:50 by WARI and Port Spencer Holdings, a wholly owned subsidiary of Centrex.
Centrex has granted the newly formed joint venture company a long term lease of the land on which land based port infrastructure is to be situated.
The first task of the joint venture will be to prepare the Bankable Feasibility Study for the port project.
The joint venture partners will decide whether to proceed with construction as well as make a decision on the development of a magnetite mine and magnetite concentrate processing plant late this year or early next year.
Eyre Iron Joint Venture
The Eyre Iron Joint Venture is funded by WISCO, which is one of China’s top five steelmakers and is seeking a long term supply of magnetite ore.
The partners have already established a JORC Inferred Resource at the Fusion Project of 454.4 million tonnes at 22.8% iron, utilising Davis Tube Recovery that can be upgraded to a magnetite concentrate at 66.1% iron from the Iron Mount, Kapperna, Brennand and Koppio prospects.
An additional JORC Inferred and Indicated Resource of 159.2 million tonnes at a Davis Tube Recovery grade of 27.8% iron, producing a concentrate of 66.9% iron, has been defined at Carrow, which is located 40 kilometres to the northeast of the resources at Fusion, for a total of 613.6 million tonnes within the WISCO Joint Venture Project area.
The partners have completed initial studies and have chosen Koppio, Brennan and Kapperna, which are all aligned along the same 20 kilometre long strike line, for development of their first long life iron ore mine.
A major infill drilling program is planned along all three deposits and holds potential for an additional 200 to 400 million tonnes of iron ore resources to be added to the mineable resource base.
The Iron Mount deposit, which sits on the edge of the Fusion Project area, may contribute resources to the latter stages of a proposed 20 year mine life.
Baseline environmental and social studies are underway, and large diameter drilling is collecting samples for metallurgical testing and for the upcoming Feasibility Study. Earlier metallurgical testing confirms that the deposits can produce a high quality magnetite concentrate blend.
The partners plan to transport the iron concentrate over a low impact slurry pipeline that will extend 40 kilometres to a planned port at Spencer.
A desalination plant will be constructed next to the port that will supply water for the mine and will contain a return pipeline back to the water treatment plant.
Construction of the Fusion Mine is expected to commence in 2013.