Jupiter Mines updates on iron ore spin-off
The Board of Jupiter Mines Limited has approved progressing the execution of the initial public offering (IPO) of its Central Yilgarn Iron Ore (CYIP) assets in Australia.
An IPO will crystallise value from the CYIP assets via a 3-pronged strategy:
- Development of the Mount Mason DSO Hematite Project on a fast track basis;
- A consolidation platform for growing the existing DSO resource base; and
- Explore creative options to advance the Mount Ida Magnetite Project in the mid-term, leveraging upon the existing rail and port infrastructure and the dwindling DSO resources in the Yilgarn.
Jupiter has appointed Greg Durack as the Chief Executive Officer to lead the IPO and implement the above strategy.
MOUNT MASON DSO HEMATITE PROJECT
The Mount Mason high-grade hematite mineralisation project is located approximately 12km NW from the Mount Ida magnetite project. It has the potential to be a low cost start-up, near term project with a short payback period and strong positive cash flows.
It is envisaged that the proposed Mount Mason project, upon completion, would lead to mining at the Mount Ida magnetite deposit.
The Mount Mason Mining Proposal was submitted for assessment by the Department of Mines and Petroleum in May 2014, and subsequently approved in July 2014.
Following the completion of the positive scoping study, Jupiter completed a feasibility study on the project in 2012. Optimisation of the feasibility study was undertaken in 2014 until the project was placed into care and maintenance until economic conditions improved and infrastructure access can be secured.
MOUNT IDA MAGNETITE PROJECT
Jupiter Mines has defined an Inferred Resource over the Central Zone of the Mount Ida Magnetite Project of 1.85 billion tonnes with a head grade (15% Fe cut-off) of 29.48% Fe, 45.88% SiO2, 1.10% Al2O3, 0.074% P, 0.201% S (ASX announcement 8/1/2013).
On the 4 September 2012 an increased resource estimate for Mt Ida of 1.23 billion tonnes at 29.79þ was announced, indicating the potential for a robust, long-life operation, which would underpin the Mount Ida Feasibility Study, which was due for completion by Q3 2013.
The Study was based on annual production of 10 million tonnes a year of beneficiated magnetite grading +68 per cent Fe. It was also stated that all work streams on the Mount Ida feasibility study were due for completion by December 2012, with the feasibility study to be delivered by Q2 2013.
However, on November 8th 2012, Jupiter froze further expenditure on the Project, mainly due to the increasing cost environment indicated by the preliminary estimates of the Mount Ida Feasibility Study.
This identified higher capital and operating costs than those contained in the 2011 Scoping Study. In light of these estimates, taken together with the depressed iron ore prices and strong exchange rate environment at the time, the Jupiter Board concluded that it was in the best interest of the Company and its shareholders to freeze expenditure on the project until market conditions improve and uncertainty in delivering key infrastructure to enable the export of magnetite concentrate is removed.
The Mount Ida Magnetite Project now has a significant magnetite resource with the Feasibility Study components well advanced.
