Queensland Bauxite (ASX:QBL) is fast tracking its goal of upgrading the current Indicated Resource at its flagship South Johnstone project near Innisfail in Queensland to Measured status with two drilling programs underway.
Drilling will also be used to finalise the initial mine plan for submission to the Queensland Department of Natural Resources and Mines for an initial Mining Development Lease Application.
Samples are being sent progressively to ALS Laboratories for assaying.
The MDLA is to be submitted as soon as practical after assay results are received and modelled.
Environmental and mining engineering studies are being undertaken concurrently at the project area and are expected to conclude at the same time as the Initial Resource Mine Plan is completed, for submission to the DNRM for the MDLA.
South Johnstone is located just 15-25 kilometres from the Port of Mourilyan, which has current available capacity to support a 800,000 to 1,200,000 tonne export project.
Independent Market Analysis of South Johnstone Bauxite
Independent bauxite industry consultant group CM Group (CM) has provided a market analysis of bauxite from South Johnstone as analysed by ALS Laboratories.
CM Group stated:
“The South Johnstone bauxite is suitable for low temperature Bayer processing as a single source feed to a refinery or it could equally be blended with other low temperature bauxites as a feed to refineries.
“On the Total Available Alumina (TAA) and Reactive Silica (RS) figures, the South Johnstone bauxite has similar grade characteristics to the bauxites of the Darling Ranges in Western Australia, which form the basis for Western Australia’s world-class alumina industry.
“The economics of South Johnstone bauxite were evaluated for both high temperature and low temperature Chinese refineries, the result being that low temperature processing is optimal for this bauxite.
“Being low temperature bauxite opens the market for the South Johnstone product to approximately 82% of the current Chinese merchant refinery capacity and increases the potential customer base.”
“When QBL-supplied costs for South Johnstone are considered on a ViU-adjusted pricing basis (relative to the CBIX price index forecast), the South Johnstone bauxite project is positioned in Q2 of the China import margin curve, again sandwiched between Malaysia and Australia.
“In other words, on a ViU-adjusted basis, relative to CBIX, South Johnstone bauxite could be treated at a lower cost than Malaysian bauxite, but a higher cost than Weipa bauxite.”
“The Chinese value quality bauxite, a diversified supply base, consistent supply and grades, and a SE Asia or Oceania location (to minimize freight costs). In this respect, if the South Johnstone project can provide a consistent quality of product, it will satisfy all of the value criteria. Thus the South Johnstone project is well placed to supply the Chinese market.”
The Company is looking at a 2015 commencement to mining and production at South Johnstone, given infrastructure does not need to be built, 15-25 kilometre proximity to the Port of Mourilyan which has available capacity for a bauxite export operation.
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