Commodities, Exploration/Development, Iron ore, News

Hawsons Iron provides BFS update

Hawsons Iron

Hawsons Iron has indicated the bankable feasibility study (BFS) for its namesake iron ore project will not be completed by December 2022 as planned.

The company has chosen to slow the pace of work on the BFS to examine escalating expenditure costs and the options to progress the project, which comes as the global economic climate worsens.

Hawsons Iron chair Dave Woodall said the current inflationary environment combined with interest rate policy responses of central banks around the world had generated strong headwinds.

“We, like many companies, are being challenged by the current economic climate, falling Australian dollar, supply chain cost escalations and restricted access to equity markets which are beyond our control,” he said.

“A project slowdown is the most sensible and prudent response to preserve capital, given global cost pressures and will allow a focus on optimising pathways in the best interests of shareholders which are reflective of deteriorating world conditions.”

Hawsons Iron will conduct a managed slowdown of BFS activity and complete a thorough analysis of the capital and operating cost estimates presented to date, along with a strategic review of all options to progress the project.

“This analysis and review process is going to take some time,” Hawsons managing director Bryan Granzien said. “The BFS will not be completed by the end of December 2022, but we have been left with no other choice given the current state of global capital markets and world economy.”

Woodall said the company’s capacity to raise additional capital during the next 12 months would be contingent on the passage of resolutions to be put to shareholders at the forthcoming annual general meeting on November 15.

“The passage of these resolutions will significantly enhance the company’s equity funding capacity and options to fund the required BFS activities,” he said.

“We absolutely believe in the value of our project as a source of high-grade magnetite concentrate and are fully committed to examining all options available to us.”

Hawsons Iron has been developing its namesake project with the ambition to produce a 70 per cent iron (Fe) product once operations are up and running.

This is poised to be one of the highest-grade Fe products on the seaborne market.

To put it in perspective, BHP’s Western Australian Iron Ore (WAIO) operations have historically produced iron ore at 61 per cent Fe. This will increase to 62 per cent once BHP’s South Flank operation has ramped up.

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