Project and the Eradu MPI project, and the Board’s expectation
that Ferrowest’s plan of value adding to iron ore to produce
MPI is a superior business plan for the long-term iron market.
It also highlighted the potential weakness of Ferrowest’s sole
focus on large-scale projects requiring high levels of investment.
Recognising the depth of the existing in-house skill base and
competencies to chase short and medium-term opportunities in
parallel with the long-term drivers of company growth, Ferrowest
made the decision to embark on a process of diversification and
project acquisition to provide a more robust portfolio of projects
for development. As a result, Ferrowest is now a diversified
exploration company with a solid pipeline of projects at varying
stages of development and timetables, and spread across a number
of commodities from iron ore to gold and
base metals.
The company’s most advanced
project is the Yalyirimbi haematite iron
project located in the Northern Territory.
A simple near surface, open cut mining
operation, for which Ferrowest has
acquired the right to earn a 60% joint
venture interest, this project has the
potential to generate solid cash flow
within 18 months. It is ideally located
close to existing infrastructure of the
nearby Darwin to Adelaide railway line.
Additionally, a major gas pipeline runs
close to the tenement and the project
can take advantage of the port facilities
at Darwin.
Ferrowest believes that with the
limited drilling planned for late 2013
and further successful studies, much of
the current resource can be upgraded
from inferred to a mix of indicated
and measured. Once in production,
it is planned that cash flow from the
Yalyirimbi iron project will be used to continue the development
of the company’s larger flagship projects.
Reflecting on Ferrowest’s change of strategy, Managing Director
Brett Manning said: “At a time when many juniors battened down
the hatches, Ferrowest took the decision to spread its risk in the
rapidly changing markets and diversify, whilst maintaining focus
on its overall business plan of value adding to iron ore here in
Western Australia.
Each project that Ferrowest has acquired in the last 12 months
has been evaluated for its overall ‘fit’ in terms of commodity, level
of advancement and exposure to different markets. As a result, we
believe we have a balanced portfolio of opportunities that we will
continue to progress,” concluded Mr Manning.
Ferrowest’s rock solid approach
to adding value
Brett Manning
Managing Director
Ferrowest Ltd
Banded iron magnetite drill core at Yogi
Ferrowest Ltd was formed in 2005 by a small group of resource
project specialists who saw the opportunity to add value to a
potentially large magnetite mineralisation by processing the
iron ore through to merchant pig iron (MPI). The company’s
Yogi Mine Project is located 14 kilometres east of Yalgoo in the
mid-west region of Western Australia.
The business plan is simple enough: to couple the state’s
energy, infrastructure, skilled workforce and iron ore with state-
of-the-art processing technology in order to make a high value
product in Western Australia for export to niche iron markets.
MPI is almost pure iron at 96% Fe.
However, following dramatic changes in the world market
for mineral resources and particularly iron ore since the middle
of 2012, Ferrowest initiated a strategic review to ensure the
company would be best placed to protect itself from any perceived
new risks, and to take advantage of any opportunities that may be
presented from a challenging environment.
This evaluation confirmed the Board’s long-held belief in
the viability of the company’s flagship projects, the Yogi Mine
Minesite 2013
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