AKORA Resources advances Bekisopa iron ore project with strong pre-feasibility results
AKORA Resources (ASX: AKO) continues to tick all the boxes as it fast-tracks development of its Bekisopa direct shipping iron ore (DSO) project in Madagascar.
The company plans for the Bekisopa high-grade iron ore project to produce up to 2 million tonnes per annum of DSO at an average grade of 61.6% iron for export to blast furnace-basic oxygen furnace (BF-BOF) steelmakers.
It released a Bekisopa pre-feasibility study (PFS) in March that confirmed the potential to upgrade the project’s ore concentrate grade to more than 68% iron at 75 microns for shipping to direct reduced iron-electric arc furnace steelmakers to make greener steel.
Significant study upgrade
The PFS upgraded the results of a previous scoping study and confirmed the proposed operation is economically viable with strong financial, operational, environmental and product credentials.
The study found that, at a sale price of around $150 (US$100) per tonne for benchmark 62% iron grade ore, the project has a pre-tax net present value of around $229 million (US$147m) with an internal rate of return of 86%.
This is from an initial capital cost (including 15% contingency) of $94.3m (US$60.6m), with C1 cash costs of $85.30 (US$42) per tonne and a pre-tax capital payback in 1.8 years from first production.
Over the life of mine (LOM), the project has the potential to deliver pre-tax cash flow of $482m (US$310m) from revenues of around $1.2 billion (US$789m).
Staged development plan
AKORA recently saw its strategy to develop Bekisopa as a staged development boosted when the Madagascan Mining Ministry granted it a renewal for the project’s main tenement.
The decision to develop the project in stages benefits from the significant scale and particular mineralisation characteristics of Bekisopa’s iron ore resource.
AKORA will mine, crush and screen at-surface ‘weathered zone’ iron ore to produce a LOM average blended grade of 61.6% across the lump and fines products for shipping to the BF-BOF steelmakers via a port at Toliara.
The company is also targeting production of a fines product with an average LOM grade of 61.4% and a lump product of 61.8% grade.