by Ross Louthean
The executive chairman of Ironclad Mining Ltd (ASX: IFE), Ian Finch told the RIU Explorers Conference in the Western Australian port city of Fremantle that the company was working towards sending out its first shipment of magnetite ore late this year through Port Adelaide.
Ironclad owns the Wilcherry Hill project, east of OneSteel's Iron Knob operations that have converted from iron ore to magnetite which is railed to nearby Whyalla for its steelworks there and for shipping to other OneSteel facilities in eastern Australia.
Like its former parent BHP Billiton, OneSteel has tenure over shipping facilities in Whyalla which it has shown little interest in sharing with other aspiring mineral shippers.
Finch said Ironclad has secured access to ship out through Port Adelaide and has struck a memorandum of understanding with Liuzhou Iron & Steel Co Ltd (LISCO) of China for the sale of at least one million tonnes of direct shipping ore (DSO) per annum. This would represent about half of the targeted early annual production.
Wilcherry Hill has 60 million tonnes of indicated and inferred ore, while the nearby Hercules deposit has an inferred 215.6 Mt.
The magnetite grades about 36% Fe and as DSO ore can grade 61% Fe and have a low phosphorous content.
The plan would be to road haul the ore in containers to Lincoln Gap for onloading then onto a train to complete the 350 kilometre haul to Port Adelaide. The containers would then be lifted over the ship and emptied into the hull.
Finch said Wilcherry Hill magnetite was unusual in South Australia, in that it is crystalline as opposed to the usual sedimentary-banded iron formation ore. The crystalline ore is coarse-grained compared to conventional magnetite's fine-grain and, by comparison, is softer and lower in impurities.
Based on anticipated 2010 benchmark prices the average margin for finds and lump ore on the long run to Port Adelaide was expected to be $A28/tonne ($US24.80/t).
Finch said unlike the colossal cost of iron ore and magnetite projects in Western Australia, Wilcherry Hill's capital costs - including drilling - were expected to be A$45 million (US$40 million).
Ironclad is still 50% owned by its parent Trafford Minerals Ltd which has a package of mineral projects on Eyre Peninsula and launched Ironclad as the vehicle to look after the magnetite-iron ore projects.
Ironclad has put its hand up to join other Eyre Peninsula companies advancing into production to use the South Australian-government nominated Port Bonython facility in the upper Eyre Peninsula. This facility would slash the distance factor and allow for Cape sized vessels to load magnetite, iron ore and other minerals for shipping out through Spencer Gulf instead of Port Adelaide.
Port Bonython's development may be three years away.