WPG released the highlights of the $3 million PFS to the market on Friday, which was completed on time and on budget.
Once in production, the project is expected to provide 550 long-term jobs with 800 personnel to be required for the construction phase.
The base case scenario includes construction of an open pit iron ore mine and magnetite concentrator at Giffen Well, in addition to an open pit coal mine and power station at Penrhyn.
The company also has plans for construction of a 24km spur line connecting the Central Australian line near the Carnes siding, and construction of storage and outloading facilities on its land at Port Pirie.
The magnetite deposit will be mined at a rate of 13 million tonnes per annum to produce 5Mtpa of high-grade concentrate.
A further 400,000t of low-cost hematite concentrate will be recovered from scavenging the magnetite tailings.
With resources totalling 689.1Mt grading 31.4% iron, the operation is tipped to have a 30-year life from the mining and treating the main lode at Giffen Well.
However, with an additional two lodes and an oxide lode at Giffin Well, there is considerable upside to extend the life of the mine.
Meanwhile, the Penrhyn coal deposit will be mined at a rate of 480,000tpa of coal that will be washed and fed to a small power station to provide energy for the iron ore project and associated infrastructure.
Proposed initial capital costs for the development for the integrated project total $1.58 billion, inclusive of contingencies.
The company expects a further $153 million will be required for working capital, rehabilitation bonds and refundable deposits, taking total costs to $1.73 billion.
The free on board cash operating cost was estimated at $71.48 per tonne of concentrate sold.
WPG executive chairman Bob Duffin said the study showed it had an affordable iron ore project complete with key infrastructure solutions.
“We do not need to build an enormous mine and treatment plant in order that the cash flows will support very expensive new port developments or new slurry pipelines,” he said.
“There is little doubt that the project is feasible.
“To our knowledge, the capital required for the development of Giffen Well is the lowest of any greenfield magnetite project in Australia, and perhaps the world.”
Of particular importance was the change to reduce WPG’s initial capital commitment by some 30% to about $1 billion, with the company having already received expressions of interest from institutions for the provision of off balance sheet power solutions.
Production at Giffen Well is being targeted for 2017.
At the end of the December quarter, WPG had $13.4 million cash in the bank.
Shares in WPG fell 1.05% to 9.4c.
