Shree Minerals has moved from greenfield iron ore exploration to production in Tasmania in less than five years. The Nelson Bay River Iron Ore Project is the first greenfield mine to come into production in Tasmania in many years and won out despite a long statutory approval and legal process.
Nelson Bay River will ship first iron ore from Burnie Port in either the last week of December or the first week of January 2014.
Shree will produce a very low deleterious elements lump & fines products from Nelson Bay River. Annual production is expected to be about 400,000 tonnes for 2.3 years.
Company officials say that for a business with a market capitalization just shy of Aus$19 million, earning revenues of Aus$36 million over two years is highly significant for the wider market. Shree then plans to move on to stages 2 and 3 of the project.
In May, Shree entered into an offtake agreement with Singapore-based Frost Global. Frost has provided US$4 million in funding to progress development of the project towards iron ore supply. This will be paid back over the first eight shipments at a rate of US$500,000 per shipment.
The hematite ore is similar to ore found in Western Australia’s prolific Pilbara region with low alumina content and a premium product that is easy-to-extract.
The production schedule for the first stage is to develop two relatively shallow open-cut mines producing direct shipping ore (DSO) grade hematite, which will require just crushing and sizing.
The second stage involves continuation of mining of the second open-cut situated above the main magnetite ore body. The hematite oxide cap consists of the central DSO ore section mined in stage one which is surrounded by lower grade ore considered to have potential to produce a commercial beneficiated oxide product.
Shree will then move to the third stage of the project, which involves open-cut mining of the deep magnetite ore body beneath the oxide cap. Earlier studies have demonstrated magnetite ore can provide either a dense media magnetite product suitable for coal washery applications or a blast furnace pellet magnetite concentrate.
The mine life for the project based on the current mine plan is expected to be 9-10 years and there is potential to increase this with further exploration.