Alien Metals (UFO) said an initial independent scoping study for the Hancock Iron Ore Project has demonstrated the potential of exceptionally strong returns from a potential development.
Last week, Alien announced that it was advancing the Hancock Iron Ore Project by engaging the mining consultancy firm Mining Plus to carry out a scoping study at the project area.
The global minerals exploration and development company said the scoping study would follow the maiden JORC compliant inferred resource of 10.4Mt @ 60.4% Fe (including 7.8Mt @ 60.1% Fe at the Sirius Extension target and 2.6Mt @ 61.5% Fe at the Ridges targets) at Hancock.
With the initial analysis of the samples, the iron ore appears to be a high-quality product with very little adverse deleterious minerals that would affect its appeal and usability, Alien noted.
The minerals exploration firm reported that the average grade of the DSO grade ore from the Western Ridges to date is around 61.5 % Fe and with the current volume of 2.6Mt it currently contains over 2 years’ initial mining material and is recommended as the initial ore to mine.
Initial Life of Mine studies show that the current resource will sustain an 8-year life based on a mining rate of 1.25Mtpa with a pre-production capital estimates of around $30m; exceptionally low strip ratios (around 1:1 on the Ridge Deposits); and operating costs of US$60/t FOB.
‘Such a project, as already noted, is an extremely low capex one as it does not require any type of on- site fixed plant nor railway or port requirement to begin mining,’ it told investors.
Following the results from the Scoping Study, which Alien describes as ‘exceptional’. the Company has begun planning the next stages of development with the appointment of a highly experienced iron ore operations manager to commence the permitting process.
Figure 1: Location of Hancock Iron Ore Project, Western Australia
Alien is also in the final stages of planning the next phase of drilling, which is targeting extensions to the Ridges resources, where substantial resource growth potential exists.
Bill Brodie Good, Chief Executive Officer & Technical Director of Alien Metals, commented: “We could not be more pleased with progress on the Hancock Iron Ore Project to date.”
Addressing shareholders, he said: “Having delivered a meaningful resource so quickly, and to follow up with a very compelling mine development scenario from the independent Scoping Study, we are now working aggressively in the development, mining and permitting arena to keep the momentum up and get this project into production within a very short timeframe.”
“We are really fortunate to have Lloyd Edmunds join the team and retain Mining Plus for the development phase. With Lloyd’s background in project delivery at Australia’s number 3 iron ore miner, Fortescue Metals Group (“FMG”), he is a key appointment for Alien Metals.”
Alien said it is also currently looking at off-take options as a way of securing the potential of the project and the feasibility of the project and will, now that an MRE is present, be able to talk in earnest with several parties on possible options for developing the project.
Figure 2: Target areas for further ground reconnaissance, Hancock Tenement, Hamersley Iron Ore Project, August 2021
View from Vox
In recent weeks, Alien reported that ongoing drilling at the Elizabeth Hill Silver Project continues to produce visible sulphides and silver and is providing “excellent geological information.”
In September, Alien said it was “extremely encouraged” by the initial findings of its inaugural drilling program at the Elizabeth Hill Silver Project in the Pilbara Region of Western Australia.
This inaugural program is designed to test some of the historic drilling undertaken over 20 years ago for quality control (QA/QC) purposes, but also to test the Company’s belief that the historical silver ore body forms part of a much larger and widespread mineralised system.
In September, the minerals exploration and development firm said ‘multiple occurrences’ of visible silver have been identified in the drill core which were recovered from shallow drilling.
It said drilling had confirmed its geological interpretation that the original Elizabeth Hill silver deposit appears to be associated with a much larger polymetallic mineralised system.
Earlier this month, Alien Metals announced that visible sulphides and native silver have been observed in core and reverse circulation (RC) chips, which appears to support the Company’s view that a larger polymetallic halo exists around the original high-grade silver deposit.
In its recently published results for the six months to 30 June 2021, Alien Metals highlighted a number of recent positive developments, including its recently declared maiden inferred resource in excess of 10Mt @60.4% Fe at the group’s Hancock Iron Ore Project.
The results were ‘significantly’ ahead of expectations with low levels of deleterious elements indicating that the project could produce high-quality Direct Shipping Ore products.
The Company highlighted that ridges E and C at Hancock are only partially tested to date, and that it feels there is ‘considerable’ potential to define further DSO grade material.
‘With only a quarter of the Western Ridges targets tested to date, we believe there is considerable scope to grow the DSO resource over the next 6 months,’ it told investors.
Whilst Capstone Mining Corp decided not to proceed with the farm-in JV in June 2021, the Company said it continues to see potential in the Donovan 2 copper-gold project in Mexico.
Commenting on the interim results, Dan Smith, Chairman of Alien Metals said: “In addition to driving value in our existing portfolio of assets, we continue to be presented with a number of potential acquisition opportunities across a range of commodities and geographies.”
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