On January 29, emerging Australian iron ore producer BC Iron issued its quarterly activities report for the period ending on December 31, summarizing the situation at Nullagine Iron Ore Project (Nullagine) in Pilbara, Western Australia, the company's key joint venture with Fortescue Metals Group (FMG).
According to the report, the results from trial mining in the project produced a positive reconciliation of 13 percent over the estimate for premium iron ore, with the development activities now focused on securing final regulatory approvals. The production is predicted as an initial 3 million mt per annum for late 2010, increasing subsequently to 5 million mt within a short time.
The project has a strong financial position with approximately US$21.5 million in cash at the end of the quarter, following the securing of the first part worth US$15 million of the fund to be provided by the off-take and pre-sales agreements with Hong Kong's Henghou Industries. The total funding from Henghou Industries will be US$50 million to be used for project development. The updated pre-production capital expenditure is estimated at $51.5 million.