HARANGA Resources’ 80%-owned subsidiary Haranga Khuder LLC, which holds mineral exploration licences and a pre-mining operations agreement for the Selenge Iron Ore Project, has been granted a mining licence. The Mineral Resources Authority of Mongolia has granted the licence for an area covering 3480.7 hectares.

The licence is valid for 30 years until June 19, 2045, and the company can apply to have it extended up to two additional terms of 20 years each. As a result of the mining licence, the area covered by an exploration licence has been split and a new exploration licence granted for the area outside the mining zone. Haranga now holds a total of 5459.85 hectares that remain valid under the status of the pre-mining operations agreement. The company’s remaining five tenements remain unchanged.

During the March quarter Haranga completed a fully underwritten non-renounceable rights issue which raised more than Aus$1.444 million before costs. The issue was underwritten by Golden Rain Holdings, which placed the shortfall.

The company also received results from metallurgical testwork carried out by ALS Iron Ore Technical Centre in Western Australia. A total of 400.1kg of samples were prepared and sent for testing, including 196.9kg of samples from Bayantsogt deposit and 203.2kg from Dundbulag deposit.

The results demonstrated a magnetite concentration of marketable specification with high iron grade and low impurities suitable for Chinese steel producers. Haranga is assessing the results in order to generate design flow sheets for engineering purposes of a potential beneficiation plant at the project site.

The Selenge project is in the heart of Mongolia’s premier iron ore development region and near the country’s second largest industrial centre of Darkhan in Selenge province, where key infrastructure such as railway, electricity and water supply is well developed. The main Trans-Mongolian railway is connected by local sub-rail spurs and the company has signed an MoU with both the Mongolian Railway Authority and the Ministry for Transportation requesting up to 5 million tonnes per annum of rail capacity.

In May 2013, Haranga announced a resource of 254.4 million tonnes in the measured and indicated categories, which is the largest JORC compliant iron ore resource in Mongolia with a significant further exploration upside.

The company plans to reach an annual export capacity of 3 million tonnes iron concentrate by 2016 when production is due to commence. Haranga is also working on infrastructure, engineering and technical solutions for a mine and processing plant complex at its project. The water and electricity supply can be provided within only 25km from the mine site. A scoping study to connect the project to Shariin Gol railway within only 45km distance is under way.