Venture Minerals signs road access agreement for Riley iron ore project
Venture Minerals plans to ship its first ore from Riley next month.
Perth-based Venture Minerals (ASX: VMS) has moved a step closer to re-starting the Riley iron ore mine in north-west Tasmania after signing an access agreement with Hydro Tasmania covering the initial 21km of haulage road from mine site to port.
The agreement has secured an all-weather transport route from Riley’s mine gate to the Port of Burnie, 120km away, and affords Venture a clear and rapid development pathway, with the first shipment targeted for next month subject to completion of financing.
Venture has been assessing its options including a debt facility to fund working capital to sustain mining operations as well as capital to complete the construction of a wet screening plant.
The company expects to make a decision on funding initiatives and a final investment decision in the coming weeks.
Transition phase
Managing Director Andrew Radonjic said his team was poised to commence mining and dry screening activities at short notice.
“This is an exciting phase for our company as we transition from explorer to producer,” he said.
“We are seeking to quickly bring the final pieces of this puzzle together to enable the first shipment of ore from Riley to occur in July.”
Project re-start
Riley’s direct shipping ore project has been reported to contain reserves of 1.6 million tonnes at 57% iron with low impurities.
The ore is believed to be all at surface with zero strip ratio, meaning it can be accessed at very low cost.
Development and mining activities at Riley commenced in 2013, but were suspended soon after due to declining iron ore prices.
The years that followed saw a sustained recovery in the commodity’s price and in August, Venture launched a review targeting a potential re-start this quarter.
Operating costs
The agreement with Hydro Tasmania joins a list of completed project elements, including production-ready on-site infrastructure and confirmation of the first shipment delivery timeframe with offtake partner and global iron ore trader Prosperity Steel United Singapore Pte Ltd.
Mr Radonjic said the company would work to reduce Riley’s operating costs including a focus on minimising ore handling inefficiencies, additional detailed mine scheduling and enhancing the logistics chain for transporting ore including an application to transition to 24-hour, round-the-clock haulage operations.
At mid-afternoon, shares in Venture were trading 25% higher at $0.02.