Red Hawk Mining's Blacksmith Project: Pre-Feasibility Study Reveals Strong Prospects
RHK (RHK) Share Update July 2024 Tuesday 23rd
Red Hawk Mining Announces Positive Pre-Feasibility Study Results for Blacksmith Project
Red Hawk Mining Limited (ASX: RHK) has announced the results of its Pre-Feasibility Study (PFS) for the Blacksmith Project, revealing significant improvements and promising economic viability for the development of a 5Mtpa Direct Shipping Ore (DSO) iron ore mine.
Instant Summary:
- Pre-Feasibility Study shows key improvements from Scoping Study.
- Inclusion of four deposits: Delta, Paragon, Blackjack, and Champion.
- Increase in annual production to 5Mtpa while maintaining a mine life of over 20 years.
- Compelling project economics with a pre-tax NPV of $523M and IRR of 31%.
- Maiden Ore Reserve at the Delta deposit of 45.98Mt at an average grade of 60.54%.
- DSO Mineral Resource update converts 77% of the MRE for the Delta Deposit to the Measured category.
Pre-Feasibility Study Overview
The Pre-Feasibility Study (PFS) for Red Hawk Mining's Blacksmith Project demonstrates the economic viability of developing a 5Mtpa Direct Shipping Ore (DSO) iron ore mine. The study includes four key deposits: Delta, Paragon, Blackjack, and Champion.
Key improvements from the previous Scoping Study include an increase in annual production to 5Mtpa while maintaining a mine life of over 20 years. The PFS also outlines a robust capital and operating cost estimate, with a pre-tax Net Present Value (NPV) of $523 million and an Internal Rate of Return (IRR) of 31%.
Maiden Ore Reserve and Resource Updates
As part of the PFS, Red Hawk Mining announced a maiden Ore Reserve for the Delta deposit of 45.98Mt at an average grade of 60.54%. This reserve underpins the first 13 years of production. Additionally, the DSO Mineral Resource Estimate (MRE) update for the Delta deposit converts 77% of the resource to the Measured category, enhancing the predictability of ore tonnes and grade.
The total Blacksmith MRE now stands at 172Mt at 60% Fe, with significant additional value expected from the remaining deposits. Red Hawk plans to release a maiden DSO resource for the Eagle deposit by the end of July 2024.
Project Execution and Logistics
The PFS mine planning has continued to optimize the mining sequence and ore feed composition to the crushing plant while considering heritage and approvals. The design development of the process and non-process infrastructure at both Blacksmith and Whim Creek has advanced significantly.
Red Hawk has entered into a strategic partnership with MGM Bulk Pty Ltd to provide ore haulage services for the Project. The transport and logistics strategy has been optimized to maximize productivity and reduce unit operating costs. The Project Execution Plan includes a robust strategy for development, with commercial engagement confirming interest and available capacity for execution.
Next Steps
Over the next six months, Red Hawk intends to undertake several key activities, including the release of a maiden DSO resource for the Eagle deposit, commencement of the Definitive Feasibility Study, RC infill drilling at Delta, and submission of a Mining Proposal for the first five years of mining. The company will also continue to optimize haulage logistics and design the camp infrastructure.
The positive results from the PFS are likely to boost investor confidence in Red Hawk Mining's Blacksmith Project. The compelling project economics and significant maiden Ore Reserve at the Delta deposit indicate strong potential for long-term profitability. This announcement may positively impact the company's stock price as investors react to the promising prospects.
Investor Reaction:
Analysts have responded positively to the PFS results, noting the strong project economics and significant maiden Ore Reserve. Investors are optimistic about the project's potential for long-term profitability and the strategic partnerships that enhance logistics and reduce costs.
Conclusion:
Investors should closely monitor Red Hawk Mining's progress as it advances the Blacksmith Project. The promising PFS results and strategic partnerships position the company well for future success. Stay informed on the latest developments and consider the potential long-term benefits of this project.