West Perth-based Polaris Metals NL has been given the all clear to proceed to a bankable feasibility study for its Yilgarn iron ore project, after an initial study pegged capital costs of the project at up to $130 million.
Prodemas International, which carried out the prefeasibility study, gave its recommendation to Polaris to proceed to the next stage of the study.
The prefeasibility study was centred on a base case 2.5 million tonne per annum mining rate, which gave the project an initial mine life of eight years.
The ore could then be trucked to a new siding on the Trans Australia rail line and then railed to the Fremantle Port Authorities Kwinana operation.
Start up is anticipated in late 2010.
Polaris said capital cost including rolling stock is estimated between $120 million and $130 million with operating costs between $60-70 per tonne, depending on operating options.
"Polaris believes that subject to state environmental approvals it is possible to bring the stage 1 Carina project into production in 2010," Polaris said.
"As resources are established on the other prospects in the project and approvals to mine are granted, the study indicates the benefits and potential of increasing production to 5-10Mtpa."
Polaris added it will make its decision to proceed to the next study stage after optimisation studies into rail and port infrastructure are completed in the fourth quarter f this calendar year.
Shares in Polaris dipped 0.5c to 37.5c at 12:10 AEST.
