Murchison Metals Limited will significantly progress the development of its Jack Hills Stage 2 Project in the Mid West region of Western Australia

Substantial advances in infrastructure development, marine facilities at Oakajee Port , rail and industrial infrastructure, and environmental work on project locations outside the mine footprint keep Jack Hills Stage 2 on schedule for first shipments in late 2010.

Murchison Metals has already started mining at Jack Hills Stage 1, with first shipments of ore through Geraldton Port scheduled for later this year.
The Jack Hills Stage 2 feasibility study is targeting annual production of 25 million tonnes per year, with potential to expand.

Murchison Metals executive chairman Paul Kopejtka says the latest developments for Jack Hills Stage 2 are critical components of the world scale project.

"With mining at the 1.5 million tonnes per year Stage 1 project under way, we are maintaining strong progress for the development of Stage 2," Paul Kopejtka says.
"In particular, we have seen important advances in the development of project infrastructure that will underpin the project."

"We have also had productive negotiations with the State Government on its likely policy position on the development of the rail and port facilities."
Paul Kopejtka says the Jack Hills Stage 2 feasibility study remains on track for completion in mid 2007, along with environmental surveys and other government approvals targeted for completion in late 2007.

An international consortium comprising the engineering arm of South Korean steel giant POSCO, Mitsubishi and Toll Holdings has entered an agreement to consider the development of the new port and rail facilities.

Key recent developments for Jack Hills Stage 2 include:

Oakajee marine facilities

Port design work has progressed very satisfactorily and is now at an advanced stage.
Leading international engineering group Maunsell Aecom has now completed work on the conceptual port design, including a critical evaluation of the costs and construction times for alternative breakwater designs.

These studies confirm the viability of the southern breakwater acting as an effective protection against the south-south-western ocean swell. Further modelling and oceanographic studies to refine design of the Capesize class port are already under way.

Oakajee industrial area

Agreement has been reached with the State Government on a process for the integration of planning studies for Murchison's port and industrial facilities with the wider government plans for the Oakajee Industrial Area.

The process will deliver time, cost and efficiency benefits and provides significant support for Murchison's plans for this important infrastructure location.

Work will start shortly on additional geotechnical programs to confirm previous studies indicating the construction materials for the breakwater can be obtained from the Oakajee Industrial site. Additional offshore geotechnical drilling will also be undertaken.

Studies have continued on both the layout of iron ore industrial facilities and the land use structure plan and both of these are close to finalisation.

Railway

Aerial surveys of the likely rail corridor were completed in September and more detailed mapping and high definition aerial photography for the final rail alignment will be available in November.

Discussions with major rolling stock providers in North America are under way, with progress on the characteristics and availability of the latest locomotive and rolling stock technology aimed at reducing to a minimum noise and other emissions.
Work has continued on an Alternatives Analysis of rail route options required as part of the community consultation program and is an integral part of the environmental approval process.

Approvals and agreements

Spring environmental flora surveys are complete at the port, mine and along the vast majority of the naturally vegetated area within the pastoral leases which covers most of the rail corridor. All of this work is on schedule.

No unexpected species have been identified to date. Additional surveys are scheduled to be undertaken in autumn. Preparations for the fauna survey are also complete. The survey work will take place as scheduled during the optimum survey period in November.

Underwater work in the marine environment has started with no unexpected outcomes or issues identified to date.

A meteorological station will be constructed on the Oakajee site in the near future.

Work has also started on the preparation of the environmental referral documents for the mine, rail and port approvals. In addition, positive discussions have taken place with traditional owners covering all of the potential project area including all rail route options and the port area. A program of meetings including strategic planning sessions is planned with each group to build strong relationships with the indigenous communities they represent and to reach agreement on cultural heritage and Native Title land use matters.