Murchison Metals says its decision to withhold from investors a capital cost estimate for its Oakajee port and rail project was justified, because any final costing of the project was "premature and should not be relied on by shareholders".
The iron ore miner was responding to a query from the Australian Securities Exchange regarding its announcement on March 22, which Murchison said it released in response to media speculation over cost blowouts.
Media reports claimed the project's cost had increased to $6.7 billion from $4.3 billion, while Murchison's March 22 announcement estimated the final cost for the port and rail infrastructure at $5.2 billion.
Murchison said it disclosed an internal cost estimate for the project because it believed the media speculation had the capacity to create a false market.
"The indicative capital cost estimate disclosed in the announcement was not, and was not intended to be, an updated capital cost estimate for the development of the Oakajee project, as the technical design and economics of the project remains subject to further optimisation and refinement," Murchison's statement said.
Murchison said it first became aware of the cost estimate on November 19.
"Any reference to capital estimates prior to completion of the (bankable feasibility study) for the Oakajee project is premature and entirely speculative," Murchison said.
"Accordingly, Murchison believes that the information in the announcement relating to the indicative capital cost estimate of the Oakajee project is not material, and that a reasonable person would not expect that information to have a material effect on the price or value of Murchison securities."
Murchison owns 50 per cent in the Oakajee project with Japanese joint venture partner Mitsubishi.
At 9:41AM (WST), Murchison shares had slipped 3.8 per cent to trade at $1.00.
