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Venture Minerals eyes Q4'19 start to iron ore shipments after Riley mine restart

Venture Minerals Ltd. said Aug. 22 that its board decided to restart mining at the Riley iron ore project in Tasmania, Australia, after a pre-feasibility study outlined an after-tax net present value of A$27.2 million and an internal rate of return of 303%.

The company also executed a full off-take agreement with iron ore trader Prosperity Steel United Singapore Pte. Ltd. for the first two years of output at Riley. The company said it is positioned to resume operations on the Riley mine, with first ore shipments planned for the fourth quarter.

The mine was suspended in August 2014 after starting operations in May 2014 due to low iron ore prices at the time.

Total revenue is estimated at A$172.8 million, and EBITDA is estimated at A$37.6 million over the mine's two-year life.

Preproduction capital costs are estimated at A$3.6 million, with a A$3.1 million additional cost for a wet processing plant, Venture Minerals said, adding that it is investigating steps to lower upfront expenditures at the project. The study estimated operating cash costs at A$56.09 per dry tonne and a further A$29.03 in shipping costs.

The study is based on Riley's probable ore reserve of 1.6 million tonnes grading 57% iron, representing an 80% conversion of the total indicated resource base, and producing about 1 million tonnes per annum of final product grade of 57% iron.