Carpentaria Resources shareholders have endorsed the company's strategy for the development of its flagship Hawsons Iron Project in Broken Hill, Australia at the latest Annual General Meeting (AGM) held in Brisbane.
|Exploration drilling at Carpentaria Resources’ Hawsons Iron Project, Broken Hill. Image ©Carpentaria Resources|
Carpentaria's Chairman, Dr Neil Williams noted the company’s success in attracting blue-chip Japanese trading house Mitsui & Co to the Hawsons project's bankable feasibility study (BFS), which he described as validating the company’s strategy and reducing Hawsons' financing risk.
Dr Williams said Carpentaria now had 140 per cent subscription for Hawsons’ initial planned production of 10 million tonnes per annum, from blue-chip steelmakers and trading houses across Asia and the Middle East.
“High-grade raw materials provide considerable benefits in increasing productivity and reducing pollution and therefore attract a higher price. Currently, high quality products from fines to pellets are attracting a US$27 to US$75 per tonne premium over the benchmark price. With both the direct reduction (DR) and pellet feed markets needing new supply, Hawsons is perfectly placed to deliver and we have the right people with the right product and right location to ensure success,” said Dr Williams.
Carpentaria's Managing Director, Quentin Hill pointed to recent milestones including a positive prefeasibility study, resource upgrade and the Mitsui & Co announcement as evidence that the company is delivering on its strategy.
Carpentaria has developed a construction finance plan for Hawsons in consultation with leading project finance banks, involving a 65 per cent to 35 per cent debt/equity split.
Analysts Wood Mackenzie have rated Carpentaria's Hawsons Iron Project as the world’s leading undeveloped iron ore project of its type in their latest industry assessment.
Based on Carpentaria's independent prefeasibility study results and current iron ore prices, the company has assessed Hawsons’ post-tax, equity internal rate of return at 43 per cent.
Data by analysts CRU has pointed to increasing demand for pellet feed in China, as steelmakers seek to enhance productivity and curb emissions. CRU sees China’s imports of such material surging over the next decade, potentially resulting in a 70 million tonnes per annum rise.
Consequently, Wood Mackenzie expects “high grade concentrate and pellet feed projects to be the focus of project finance in the near term.”