Aurox Resource has today released revised figures for the development of its Balla Balla iron ore-vanadium-titanium project in the Pilbara, with capital cost estimates at a total of $2 billion.
The Perth-based company today released results from an integrated study over the project, which had to be revised due to the downturn in global markets some 12 months ago.
Prior to the financial meltdown, Aurox had estimated the cost of Balla Balla, then a magnetite iron ore and vanadium project, to be at $603 million for a 6 million tonne per annum operation.
In an updated study released today, Aurox said capital costs required to start production in 2012 for phase one of the project are currently at $1.3 billion for a 6mtpa operation for iron ore.
The capital cost includes a 280,000 tonnes per annum titanium circuit, slurry pipeline from site to Port Hedland and infrastructure at the Utah Point port.
Phase two will ramp up the iron and titanium circuits to 10mtpa and 470,00tpa, respectively, at a further cost of $700 million.
Capital estimates were compiled by Orelogy and GR Engineering Services.
The Balla Balla operation currently has a mine life of 16 years, however conceptual mine plan studies show this could increase to more than 26 years.
The project has a total reserve of 207 million tonnes with iron ore grading at 45 per cent, 0.63 per cent for vanadium and 14 per cent titanium. Total resource currently stands at 456mt at 45 per cent iron, 0.66 per cent vanadium and 14 per cent titanium.
On a 16-year mine life, Balla Balla is estimated to have a net present value of $1.5 billion and reap $510 million each year in earnings before interest, tax, depreciation and amortisation.
The average annual net cash cost is estimated at $22.04 a tonne.
Aurox said it has mandated Sigiriya Capital to secure financing for the project. Sigiriya recently advised Aquila Resources on its $285 million investment by Baosteel Group.
Balla Balla received state environmental approval earlier this year.
Shares in Aurox were 3.5 cents higher at 30c at 13:13 AEDT.
