Hawsons Iron is poised to release the findings from a strategic review into its namesake iron ore project in NSW, so what can be expected?
The company made the decision to slow work on its bankable feasibility study (BFS) in mid-October 2022, with a strategic review examining escalating capital expenditure and operating cost estimates amidst an increasingly turbulent economic climate.
Hawsons Iron will conceptually consider a multi-stage mining operation with a lower base production rate to “right-size” the project before eventually scaling up towards the development of the preferred 20-million-tonne-per-annum (Mtpa) operation.
This could involve using existing rail and port infrastructure to reduce upfront capital costs before the possibility of an underground slurry pipeline is considered.
Whatever the revised operation looks like, the critical outcome for Hawsons Iron is to find the capital “sweet spot”.
“There will be a sweet spot based on the volume, capital cost and opex (operational expenditure) – all of those factors need to be considered,” Hawsons Iron managing director Bryan Granzien told Australian Resources & Investment in a December 2022 feature.
“So what we’re saying is, let’s minimise the capital upfront cost wherever we can by using existing infrastructure, but let’s not lose sight of what we’d like to achieve in the long term.
“Most people we’re talking to – whether it’s consultants or banks – can see that this is sensible and probably the only decision in this current climate. And we’re not the only company that’s doing exactly that.”
Hawsons Iron has engaged a team of specialists to conduct the strategic review, with all available project data being assessed by partners including project management specialist JukesTodd, international engineering company Stantec, mining consultancy Australian Mine Design and Development, resource specialist H&S Consultants and Flinders Ports.
The company continues to advance discussions with potential offtake partners, where non-binding letters of intent (LOIs) have been signed for up to 58Mtpa of the Hawsons Supergrade (70 per cent iron) product.
LOIs from steel mill operators account for 22Mtpa of the offtake, with marketers making up the remaining 36Mtpa. This equates to 12 steel mill operators and six commodity trading houses.