Emerging Australian miner IronClad Mining Limited has said that its Wilcherry Hill iron ore project in South Australia, a joint venture with Trafford Resources Limited, might substantially benefit from the increase in iron ore prices agreed between BHP Billiton and major Chinese steel mills.
The company pointed out that its pre-feasibility study (PFS) estimated price margin at approximately AU$30/mt is expected to shift to a margin in the order of AU$50/mt, thereby significantly increasing the overall value of the project.
Using the reported BHP Billiton April 2010 quarter price of US$120/mt delivered as a basis, if IronClad shipped DSO in the forthcoming April quarter, the company would expect to achieve a sales price of AU$105/mt after deducting freight costs.
Wilcherry Hill, which lies 45 km north of Kimba, Pilbara, is expected to begin production of its high quality, low contaminant direct shipping ore (DSO) magnetite late this year.
In February IronClad signed a memorandum of understanding (MOU) for the sale of a minimum of one million mt per year of Wilcherry Hill DSO to Chinese steel mill Liuzhou Iron and Steel Co. Ltd (LISCO).