Additionally we believe Ferreus’s (“FRS”) deposits are very much dependant on gaining third party access to BHPB’s Jimblebar network to support development into production. FRS’s deposit is a typical example of a very attractive resource dependent on gaining appropriate infrastructure access to become economic and crystallise value, given the deposits remote location (at the end of BHPB’s railway line).
However, what we believe is in FRS’s favour is its premium product ore which could assist the Company agreeing some form of commercial agreement with BHPB.
Given the improved margins offered from high grade, low impurity lump deposits relative to fines and the likely development of an increased divergence in pricing, we would expect investors to increasingly focus on the characteristics of the deposits held by the juniors.
We believe Atlas Iron (“AGO”) and Ferraus (“FRS”) are best positioned to benefit relative to their peers based on known resources and estimated lump-to-fines product mix. FRS has commissioned mining and metallurgical studies which indicated a lump-to-fines ratio of 41:59, which is relatively high compared to other Marra Mamba deposits and a mining proposal and permitting for the Company’s flagship Robertson Range deposit are ongoing.
FRS has highlighted a number of substantial high grade resource targets and offers investors significant exploration blue-sky potential relative to a number of its junior peers, albeit with significant exploration risk as a number of these targets have been inferred on gravity survey data and neighbouring resource size/grades only.
A key element to the development of the iron ore projects is FRS gaining appropriate access to infrastructure given the significant distances its prospects from Port Hedland. Therefore agreeing access to BHPB’s Newman/Jimblebar rail infrastructure is critical (even FMG’s rail network is 200km+ away). A key element which we believe is in FRS favour is that metallurgical studies to date have supported a favourable lump-to-fines ratio of 41-59% at its Robertson Range Marra Mamba deposit which enjoys a Fe grade of 58.9%.
The Company is currently investigating the following alternatives to develop it projects: 1. MGS; 2. transportation through a co-operative cost and profit share agreement; or 3. seeking access under the WA Government rail access regime. FRS is a foundation member of the North West Iron Ore Alliance.
Top 20 as at 28 September 07 = 69.06% Lots of funds in there.
LARGE, NEW IRON ORE RESOURCE
at the DAVIDSON CREEK PROJECT
- supports development of mine, rail & port.
FerrAus Limited (ASX: ”FRS”) is pleased to report on continued exploration
success by announcing an initial resource for the Gwardar & Python prospects
at its Davidson Creek project in the East Pilbara region of Western Australia.
Gwardar & Python = 71.0 Million Tonnes @ 58.8% Fe
4.3% SiO2, 2.5% Al2O3, 0.08% P, 8.5% LOI and calcined Fe = 64.3%
Included in total resources for FerrAus’ East Pilbara Projects
= 123.4Mt @ 58.8% Fe
“This significant new resource more than doubles the resource base in our East Pilbara licence areas to over 120 million tonnes, confirming the potential for multiple, large deposits of high quality, direct shipping iron ore”.
“These resources provide the fundamental basis for project development of iron ore production at 10 Million tonnes per year and construction of transport infrastructure, both rail and port” said FerrAus Managing Director - David Turvey.
Highlights & Future Work:
- Initial resource estimate for the Gwardar & Python prospects (Inferred Resource = 71Mt @ 58.8% Fe) is based on results from RC and diamond drilling
conducted in March – July 2008 (refer Figures 1-4). It was completed by Coffey Mining Pty Ltd in accordance with the AusIMM JORC Code for Reporting of Exploration Results (refer attached resource statement).
- Including the Gwardar & Python resource, the total resource base for FerrAus’ licence areas in the East Pilbara has increased to 123.4 million tonnes grading 58.8% Fe (refer details in Table 1).
In addition, FerrAus estimates the exploration potential for iron mineralisation as extensions of current resources and at prospects and targets to be 250-350 million tonnes.
• Exploration during Q4 2008 is focussed on down dip extensions to current
resources at both Davidson Creek and Robertson Range (Figures 1 & 2).
Internal company targets are to increase the resource base to 150-180 million
tonnes during 2008 and 220-250 million tonnes by end 2009.
• Project development studies being conducted include: a) pre-feasibility study on 2-5Mtpy “fast track” production in 2010, b) scoping study on 10Mtpy production in 2012, and c) concept study on >20Mtpy production in 2014.
Australian Enterprise Holdings just bought 5.78% of FRS at a price of 90cents. What do you know.....only trading at 24cents (announcement after market close).
Glad someone sees value in it! We might have a green day tomorrow seeing it is only trading at 26% of this recent transaction!
Becoming very very illiquid this one!
167.1 million shares @ 24cents = $40 million mc (25mill cash)
123.4 mill tonne @ 58.8 fe (and growing to 500 million tonne imo)
$15 mill for all of those projects. Glad it's tightly held so noone else can get their hands on it at these prices!
investor presentation......
http://imagesignal.comsec.com.au/asxdata/20081021/pdf/00892831.pdf
Total resources for FerrAus’ East Pilbara Projects
150.1Mt @ 58.7% Fe
Gwardar & Python 85.7 Million Tonnes @ 58.7% Fe
Taipan 14.6 Million Tonnes @ 57.7% Fe
Robertson Range 40.0 Million Tonnes @ 58.8% Fe
South West Zone 10.1 Million Tonnes
potential to increase resource to 3-400M t...
The total iron ore resource inventory for FerrAus’ licence areas in the East Pilbara has increased to 166.6 million tonnes grading 58.6% Fe
Resources at the Davidson Creek project have increased to 114.4Mt @ 58.4% Fe including
Improved resource classification at the Taipan Resource to 9.3Mt Indicated (68%) and 4.4Mt Inferred Resources (32%)
Reconnaissance RC drilling is planned on new iron ore exploration targets at the Davidson Creek project during mid 2009.
...
ann out this morning regarding an increase in direct shipping ore
potential to increase resource to 3-400M t
sp currently up approx 14% on above average volume
cheers
Have a small interest in FRS, and noticed the jump in sp from 28.5c to the current 53.0c close over the past 10 days or so, and on what appears a not insignificant rise in volume of shares traded.
Being a "Sad Scotsman" , any local investors heard anything to warrant the rise ? Can the rise be expained solely by the 3rd June resources increase ?
wallyscot
This looks to be the cheapest junior on my cheap junior scale coming in at a lowly 41c per tn DSO, followed by GWR on 46c, and then GIR at 66c. Then, it's daylight to the rest well over $1.00.
Why is this one so cheap? Under the radar? Not going to get the capex or access to infrastructure? Crap management?
ABN review last Oct:
Investment view
FRS’s tenements contain a high-quality iron ore resource. We anticipate access to rail
infrastructure can be resolved commercially, but the terms, structure and timing of an agreement
remain uncertain and will prove critical to the realisation of value. As part of the North West Iron
Ore Alliance FRS has an option to secure access to multi-user port capacity, and will need to meet
the progress payments scheduled by the Port Hedland Port Authority. With the potential for a
further major increase in the resource base, FRS is now evaluating options for a stand-alone iron
ore mine with its own rail line. With the scale of operations and the funding structure uncertain, we
retain our valuation of A$2.68 per share based on naïve modelling.
Keep an eye on this formation. Can't see it making the target as the fundamentals would probably be well overextended by then, but nice formation at the moment. Overall market sentiment probably won't help it's chances.And while looking cheap to the peers, is in a pretty good set up here. On a break up, the technical target is the length of the pole. Just a probability of course.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?