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Technical Report for Lake Giles Iron Project Feasibility Study

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Positive economics supporting a 25-year mine life with Pre-Tax NPV of USD 579m (AUD 816m)

/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

VANCOUVER, BC, April 11, 2022 /CNW/ - Macarthur Minerals Limited (ASX: MIO) (TSX-V: MMS) (OTCQB: MMSDF) (the Company or Macarthur) is pleased to advise that it has filed the NI43-101 Technical Report for the Feasibility Study of the Company's high grade magnetite Lake Giles Iron Project. The results confirm that the project is economically viable under long-term iron ore price forecasts.

The Feasibility Study confirms an economically viable project producing 3 million tonnes per annum (dry basis) of high-grade magnetite concentrate over a 25-year mine life. The project will leverage off access to existing regional rail and port infrastructure and deliver a premium concentrate (66% Fe) product with low impurities. The Feasibility Study underpins a maiden Mineral Reserve of 237 million tonnes as reported to the market on 15 March 2022 (See announcement here).

The independent technical report, entitled "NI 43-101 Technical Report and Feasibility Study, Lake Giles Iron Project, Menzies, Western Australia" with an issue date of April 4, 2022 was prepared in accordance with the requirements of National Instrument 43-101 ("NI 43-101"). The technical report is filed under the Company's profile on the System for Electronic Document Analysis and Retrieval ("SEDAR") website at www.sedar.com (filing date: April 11, 2022) and on the Company's website at www.macarthurminerals.com.

The Company will now proceed with post study optimization work, project development approvals and advancing project finance.

HIGHLIGHTS

  • Feasibility Study completed for a 3 Mtpa (dry basis) magnetite mining and processing operation.

  • Feasibility Study supports a maiden Mineral Reserve of 237Mt for a 25-year mine life.

  • Production of high-grade magnetite concentrate targeting 66.1% Fe with minimal impurities suitable for pellet feedstock.

  • Initial capital investment of USD 569m (AUD 801m) with mine pre-production capital of USD 43.8m (AUD 66.1m).

  • C1 operating costs of USD 71.74 / dmt (AUD 101.05/ dmt).

  • Positive project economics with Pre-tax NPV of USD 579m (AUD 816m) a 13% IRR and Post-tax NPV of USD 315m (AUD 443m).

The Feasibility Study was completed by independent engineering, mining and geological consultants, Engenium now Stantec, CSA Global and Orelogy Consulting.

Engenium now Stantec

Engenium now Stantec was engaged to complete the non-process and process infrastructure inclusive of capital and operating cost development for the Project.

Engenium now Stantec are experts in taking projects from conceptualisation through to operation and handover. This experience includes greenfield development, brownfield enhancement and fully integrated mine-rail-rort project solutions. Engenium's scope of services cover feasibility study management, construction management, commissioning, engineering management and design, procurement and contract management, and metallurgical test work supervision. Since its inception in 2003, Engenium has undertaken numerous projects across the iron ore sector in materials handling and non-process infrastructure for clients including BHP, Rio Tinto, ArcelorMittal, Atlas Iron and Amex Resources.

Orelogy Consulting

Orelogy was engaged to undertake the mine design from pit to ROM and responsible for establishing the mineral reserve for the Project.

Orelogy is a specialist mining engineering consulting company with strong experience in open cut mine design across a range of commodities including iron ore. Orelogy have a proven track record in applying world class technical solutions to mining projects at both the feasibility and operational phase. Orelogy has a proven track record in innovative application to open pit scheduling and optimisation. In 2008, Orelogy began development of a proprietary open pit scheduling tool called Evolution. In 2014 Maptek, a world leading mining software provider, acquired Evolution. Orelogy remain the power user of the software tool globally and have an unrivalled experience in its practical application.

Orelogy has significant experience in the iron ore sector in Australia and internationally for clients including Asia Iron, Magnetite Mines, Polaris Metals, Crosslands Resources, Atlas Iron, FMG, API JV, Australasian Resources.

CSA Global

CSA Global was engaged to complete the mineral resource estimates for the Project.

CSA Global is a geological and mining consulting company providing strategic mining services and advice to companies in the international mining industry. CSA Global is an ERM Group Company that has been providing services to its clients across all mineral commodities and regions globally for over 35 years in most mineral commodities, with offices located in Australia, Canada, Indonesia, Ireland, South Africa, and the United Kingdom. CSA Global's Resources services team provides expertise in all aspects of geological and geostatistical modelling applicable to exploration and mining.

The Feasibility Study developed the following optimised 'go-forward' project scope and design. These components are presented in greater detail in the Annexure of this release.

Scope

Description

Geology

Banded Iron Formation (BIF) magnetite mineralisation comprising Mineral Resources classified as Measured - 53.9 Mt, Indicated - 218.7 Mt, and Inferred - 449.1 Mt, reported above a 15% DTR cut-off grade.

Mining

Open pit mining of Measured and Indicated Mineral Resources of the Moonshine and Moonshine North magnetite deposits. Mining rate approximately 9.68 Mtpa ore at an average LOM strip ratio of 2.6:1. Nine-month pre-strip stage with production over approximately 25 years.

Metallurgy and Process Plant

Definition of a flow sheet comprising conventional crushing and grinding (HPGR, ball mill and Vertimill), magnetic separation, followed by reverse flotation to reduce silica in the final concentrate. Concentrate production of 3 Mtpa (dry basis) with a size range of P80 38 micron.

Road Haulage

Road haulage by contract operator utilising side tipping trucks from site to a rail siding 93km south of the Project, along a private sealed haul road.

Rail Haulage

Rail siding to be constructed south of the Project adjacent to the open access Eastern Goldfields Railway. Rail haulage to be undertaken by contractor responsible for provision of rolling stock.

Port & Shipping

Concentrate to be shipped from the Esperance Port in southern Western Australia using cape class vessels. Base case assumes Port operations will be managed by the Southern Ports Authority via the existing iron ore rail unloading circuit and ship loader. A new concentrate storage shed is to be constructed to hold approximately 260kt of product. Product is sold on a FOB basis with the offtake partner responsible for shipping.

Power

Stationary power demand of approximately 40MW from a standalone microgrid comprising a combination of LNG gas reciprocating engines, solar array and battery energy storage system (BESS) with renewable penetration of 33%.

Water

Project water to be sourced from local paleochannel aquifer. Processing to be conducted with saline bore water with final concentrate wash in desalinated water to remove chloride and alkali metals.

Tailings

Mineral processing will include a coarse dry stream to be co-located with mine waste and wet tailings to be pumped to a tailings storage facility. Water is to be recovered from tailings and pumped back for processing use.

Support Facilities

Supporting site infrastructure includes a permanent accommodation village and airstrip for FIFO workforce.

Mine Closure and Rehabilitation

Mine closure has been costed for incremental closure of mining areas with final closure and remediation of non-project areas at the end of the mine

The Feasibility Study confirms the commercial viability of the Project to produce 3 Mtpa (dry basis) of high-grade magnetite concentrate over a long mine life of 25 years from Proven and Probable Mineral Reserves. The key production and financial outcomes are presented in the following table.

Production



Ore mined

236.6 Mt


Waste mined

624.9 Mt


Total mined

861.5 Mt


Strip ratio

2.64


Concentrate produced

74 Mt


Concentrate iron grade

66.1


Plant recovery

31%


Financials

AUDm

USDm

Sales revenue

12,614

8,956

Operating Expenses

8,116

5,672

Initial Capital Expenditure



Construction capex

801.1

568.8

Mining overburden pre-strip

61.6

43.8

Total initial capital

862.7

612.5

Future Capital Expenditure



Sustaining capital

203

144.1

Deferred capital - Tailings

39.8

28.3

Capitalised non-operational waste mining

355.7

252.5

Total future capital

598.0

424.6

Closure Expenditure



Closure and rehabilitation

58.2

41.3

Total Operating Cash Flows

3,625

2574

Taxes & Royalties



Tax paid

873

620

Royalties

631

435

Valuation

AUDm

USDm

NPV (6%) Pre-tax

816

579

NPV (6%) Post-tax

443

314

IRR Pre-tax

13.0%

-

IRR Post-tax

10.1%

-

A detailed summary of the Lake Giles Iron Project Feasibility Study is set out in the Annexure to this release.

Andrew Bruton, CEO of Macarthur Minerals commented:

"The filing of the NI43-101 Technical Report for the Feasibility Study of the Company's high grade magnetite Lake Giles Iron Project is the final step in the completion of the Feasibility Study process which the Company has pursued over the course of the last 18 months. The Feasibility Study has been undertaken and successfully concluded amidst the challenges of Covid-19 impacts, and these results confirm that the Lake Giles Iron Project is economically viable under long-term iron ore price forecasts.

The Company will now proceed with post study optimization work, project development approvals and advancing project finance."

On behalf of the Board of Directors, Mr Cameron McCall, Chairman

For more information please contact:

Joe Phillips


Managing Director


+61 7 3221 1796


communications@macarthurminerals.com






Investor Relations – Australia

Investor Relations - Canada

Advisir

Investor Cubed

Sarah Lenard, Managing Partner

Neil Simon, CEO

sarah.lenard@advisir.com.au

+1 647 258 3310


info@investor3.ca

Qualified Person Statement

Mineral Resources:

The Mineral Resources for the Lake Giles Iron Project disclosed in this press release have been estimated by Mr. David Williams, BSc (Hons), a member of the Australian Institute of Geoscientists. Mr Williams, an employee of CSA Global Pty Ltd and Independent Qualified Person, has reviewed and approved the above technical information relating to the Mineral Resource estimates contained in this release, in the form and context in which it appears.

Mineral Reserves:

The information in this report relating to Mineral Reserves is based on information compiled by Stephen Craig, a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Craig is a full-time employee of Orelogy Consulting Pty Ltd. Mr. Craig has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as an independent Qualified Person as defined by NI43-101. Mr Craig consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Company profile

Macarthur is an iron ore development, and lithium exploration company that is focused on bringing to production its Western Australia iron ore projects. The Lake Giles Iron Project mineral resources include the Ularring hematite resource (approved for development) comprising Indicated resources of 54.5 million tonnes at 47.2% Fe and Inferred resources of 26 million tonnes at 45.4% Fe; and the Lake Giles magnetite resource of 53.9 million tonnes (Measured), 218.7 million tonnes (Indicated) and 997 million tonnes (Inferred). Macarthur also holds 24 square kilometre tenement area iron exploration interests in the Pilbara region of Western Australia. In addition, Macarthur has lithium brine Claims in the emerging Railroad Valley region in Nevada, USA.

Forward Looking Statements

Certain of the statements made and information contained in this press release may constitute forward-looking information and forward-looking statements (collectively, "forward-looking statements") within the meaning of applicable securities laws. All statements herein, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, including but not limited to statements regarding expected completion of the Feasibility Study; conversion of Mineral Resources to Mineral Reserves or the eventual mining of the Project, are forward-looking statements. The forward-looking statements in this press release reflect the current expectations, assumptions or beliefs of the Company based upon information currently available to the Company. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct as actual results or developments may differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include but are not limited to: unforeseen technology changes that results in a reduction in iron or magnetite demand or substitution by other metals or materials; the discovery of new large low cost deposits of iron magnetite; the general level of global economic activity; failure to complete the FS; inability to demonstrate economic viability of Mineral Resources; and failure to obtain mining approvals. Readers are cautioned not to place undue reliance on forward-looking statements due to the inherent uncertainty thereof. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. The forward-looking statements contained in this press release are made as of the date of this press release and except as may otherwise be required pursuant to applicable laws, the Company does not assume any obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Cautionary Statement

The Feasibility Study referred to in this press release is based on technical and economic assessments to support the estimation of Mineral Reserves. There is no assurance that the intended development referred to will proceed as described, and will rely on access to future funding to implement. Whilst the Company believes that it has reasonable grounds based upon the results of the Feasibility Study to secure the required funding , at this stage there is no guarantee that funding will be available, and investors are to be aware of any potential dilution of existing issued capital. It is possible that Macarthur could pursue other 'value realisation' strategies such as a partial sale or joint venture of the project. If it does, then this could reduce dilutionary impacts for existing shareholders and improve the Company's overall prospects for project funding. The production targets and forward-looking statements referred to are based on information available to the Company at the time of release, and should not be solely relied upon by investors when making investment decisions. The Company cautions that mining and exploration are high risk, and subject to change based on new information or interpretation, commodity prices or foreign exchange rates. Actual results may differ materially from the results or production targets contained in this release. Further evaluation is required prior to a decision to conduct mining being made. The estimated Mineral Resources quoted in this release have been prepared by Competent Persons as required under the JORC Code (2012). Material assumptions and other important information are contained in this release.

ANNEXURE: Lake Giles Iron Project Feasibility Study Summary

1. Project Overview

The Lake Giles Iron Project ("Project") is located approximately 175 km northwest of the town of Kalgoorlie in the state of Western Australia. The Project is owned by Macarthur Iron Ore Pty Ltd (MIO), a 100% owned subsidiary of Macarthur Minerals Limited ("Macarthur" or "the Company").

The Project consists of a series of banded iron formation (BIF) hematite and magnetite prospects with mineral resources of the magnetite mineralisation defined for the Snark, Clark Hill North, Clark Hill South, Sandalwood and Moonshine deposits, previously reported in 2020 (CSA Global, 2020).

This scope of the Feasibility Study concerns the development of the Moonshine North and Moonshine magnetite deposits. Feasibility study level engineering was completed across all areas of the Project's required infrastructure in addition to investigation of existing regional infrastructure to be utilised. Associated capital and operating costs were generated to develop a financial model and define a maiden Mineral Reserve estimate.

2. Company Background

Macarthur is an Australian public company listed on the Toronto Stock Exchange (TSX-V: MMS) and the Australian Securities Exchange (ASX: MIO) and commenced exploration in 2006 for magnetite iron resources and subsequently hematite iron resources on its Lake Giles tenements in Western Australia.

In 2020, the Company reported an updated Mineral Resource estimate (CSA Global, 2020) that underpins this Feasibility Study focussing on development of the Moonshine and Moonshine North magnetite deposits.

3. Project Location

The Lake Giles Iron Project is located approximately 450 km east-northeast from the coastal city of Perth and 175 km northwest from the historic gold mining town of Kalgoorlie-Boulder, in the state of Western Australia (Figure 1).

Unless otherwise stated, all coordinates referenced in this document are in Geocentric Datum of Australia (GDA 94, Zone 50). The Project tenements are centred at approximately 788,000 mE and 6,687,000 mN.

Figure 1. Project location and existing infrastructure (CNW Group/Macarthur Minerals Limited)
Figure 1. Project location and existing infrastructure (CNW Group/Macarthur Minerals Limited)

4. Geology

Regional Geology

Macarthur's tenements cover a portion of the Yerilgee Greenstone Belt which is over 80 km in length and up to 10 km wide and lies within the Southern Cross Province of the Yilgarn Craton. The Yilgarn Craton consists of multiple lenticular greenstone belts surrounded by variably foliated gneissic granitoids.

The greenstone belts consist of metamorphosed ultramafic, mafic and sediments, including BIF which are Archean in age and are commonly intruded by mafic, intermediate and granitic rocks.

Local Geology

The parts of the north-northwest trending Yerilgee greenstone belt covered by the Project tenements comprise a layered succession of Archean rocks. At the interpreted base of the succession is a sequence of high-magnesium basalt flows more than 1 km thick overlain by komatiitic ultramafic volcanic rocks with narrow interflow BIFs and in some cases, other sedimentary rocks. High-magnesium basalt lavas with occasional interflow BIFs overlain, possibly unconformably, by sedimentary rocks (cherty, silicified, pyritic and graphitic) are interpreted to form the top of this sequence. In places, gabbroic sills interpreted to be co-magmatic with the upper high-magnesium basalts, have been intruded into the lower mafic and ultramafic lavas. The elongated lens shaped Yerilgee belt is bounded by major north-northwest trending fault/shear zones. The iron ore mineralisation consists of secondary pisolite mineralization, primary magnetite mineralization associated with un-oxidized BIF and ultramafic rocks, and goethite-hematite mineralization associated with oxidized BIF. (Figure 2)

Figure 2. Outcrop of BIF containing magnetite mineralisation at Moonshine (CNW Group/Macarthur Minerals Limited)
Figure 2. Outcrop of BIF containing magnetite mineralisation at Moonshine (CNW Group/Macarthur Minerals Limited)

5. Mineral Resources

The Mineral Resource estimate was completed by CSA Global Pty Ltd (CSA Global) and previously reported to the market on 11 August 2020. Mineral Resources for the Moonshine and Moonshine North deposits are presented in Table 1.

Table 1. Mineral Resources – Lake Giles Iron Project, Moonshine and Moonshine North, DTR >15%

Category

Tonnes (Mt)

Head Grades (%)

Concentrate Grades (%)

Fe

P

SiO2

AI2O3

LOI

DTR

Fe

P

SiO2

AI2O3

LOI

Measured

53.9

30.8

0.05

45.4

1.6

2.7

32.2

66.0

0.031

6.2

0.2

-0.7

Indicated

218.7

27.5

0.046

51.1

1.4

1.6

31.0

66.1

0.017

6.7

0.1

-0.1

Subtotal

272.5

28.1

0.047

50.0

1.4

1.8

31.2

66.1

0.02

6.6

0.2

-0.2

Inferred

449.1

27.1

0.047

52.6

1.0

1.4

29.2

65.0

0.026

8.4

0.1

0


Notes

1.

Figures contained within the above Table have been rounded.

2.

Resource estimates are based on block models constructed using three dimensional geological wireframes.

3.

Mineral Resources are reported from the block models above a DTR cut-off grade of 15%.

4.

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

5.

All Mineral Resources are reported on a dry-tonnage basis.

6.

Mineral Resources are reported inclusive of the Mineral Reserve.

6. Mineral Reserves

The Mineral Reserve estimate was prepared by Orelogy Consulting Pty Ltd (Orelogy) based on the diluted resource block model. The Mineral Reserve for the Lake Giles Iron ore Project is estimated at 237 Mt at an average grade of 28.2% Fe and DTR of 31.3%, as presented in Table 2. The Mineral Reserves have been disclosed to the market on 15 March 2022.

Table 2. Mineral Reserves – Lake Giles Iron Project, Moonshine and Moonshine North, DTR >15%

Category

Tonnes (Mt)

Head Grades (%)

Concentrate Grades (%)

Fe

SiO2

AI2O3

P

LOI

DTR

Fe

SiO2

AI2O3

P

LOI

Moonshine

Proven

34.2

28.1

51.6

1.2

0.04

1.7

30.5

65.9

6.8

0.2

0.02

-0.6

Probable

166.4

27.2

51.9

1.4

0.05

1.4

30.7

66.6

6.2

0.1

0.02

0.0

Sub-total

200.6

27.4

51.9

1.4

0.04

1.4

30.6

66.5

6.3

0.1

0.02

-0.1

Moonshine Nth

Proven

17.8

35.4

35.4

2.2

0.06

4.2

34.3

66.5

5.0

0.3

0.03

-0.9

Probable

18.2

30.4

44.7

1.3

0.05

2.9

35.9

63.2

9.4

0.2

0.04

-0.3

Sub-total

36.0

32.9

40.1

1.7

0.05

3.5

35.1

64.8

7.3

0.3

0.05

-0.6

Combined

Proven

51.9

30.6

46.0

1.5

0.05

2.6

31.8

66.1

6.1

0.2

0.03

-0.7

Probable

184.7

27.6

51.2

1.4

0.05

1.5

31.2

66.2

6.6

0.1

0.02

-0.1

TOTAL

236.6

28.2

50.1

1.4

0.05

1.8

31.3

66.2

6.5

0.1

0.02

-0.2


Notes

1.

The Mineral Reserves in Table 2 were reported in accordance with JORC Code 2012 and Canadian Institute of Mining, Metallurgy and Petroleum "CIM Definition Standards for Mineral Resources and Mineral Reserves" (CIM, 2014).

2.

The Mineral Reserves was evaluated using a 62% Fe benchmark price of USD100/dmt with a 20% premium for 65% Fe and concomitant Fe concentrate grade bonus.

3.

Mineral Reserves are based on a Feasibility Study utilising Mineral Resources from Moonshine and Moonshine North deposits.

4.

Mineral Reserves account for mining dilution and mining ore loss.

5.

A Davis Tube Mass Recovery (DTR MR) cut-off grade of 15% was applied prior to scheduling for 2022 reserves estimate.

6.

Proven Mineral Reserves are based on Measured Mineral Resources only and Probable Mineral Reserves are based on Indicated Mineral Resources only.

7.

Mineral Reserves are reported on a Dry Tonnage Basis.

8.

Mineral Reserves are a part of Mineral Resources.

9.

The sum of individual amounts may not equal due to rounding.

7. Mining

Mining Method

The Moonshine and Moonshine North pits will be mined using conventional open pit mining methods based on 350-400 t class hydraulic excavators loading 180 t class rear dump trucks. The operation is proposed using experienced mining contractors with Macarthur (the Owner) maintaining orebody definition, quality control and medium to long term mine planning functions and management. The mining services include:

  • Supply of personnel, equipment and mining infrastructure required for the mining services excluding diesel fuel which is to be supplied by the Owner.

  • Mobilisation of buildings, equipment, and personnel.

  • Clearing and stripping of suitable material from all disturbed areas into discrete stockpiles.

  • Construction of haul roads and light vehicle service roads in the mine area and ongoing maintenance of haulroads.

  • Construction of the Run-of-Mine (ROM) pad and skyway using bulk waste.

  • Grade control drilling.

  • Drilling and blasting of ore and waste on 10 m benches.

  • Load and Haul utilising 350-400 t class excavators and 180 t class haul trucks mining on 5 m high flitches.

  • Hauling waste to external waste dumps.

  • Hauling ore to the ROM pad where it will be direct fed to the crusher ore placed onto a finger from skyway of stockpile adjacent to the ROM pad.

  • Rehandle of ore from ROM fingers or adjacent stockpiles.

  • Ongoing pit dewatering from in-pit sumps.

  • Rehabilitation of waste dumps and roads.

Pit Optimisation

The open pit optimisation process undertaken for the study has the following key assumptions on the constraints and parameters utilised:

  • Only material classified as Measured and Indicated in the Mineral Resource model were considered as potential ore during the optimisation process.

  • Mining dilution (averaging 2.0%) and mining recovery (averaging 97.5%) were modelled in the blockmodel.

  • Waste mining costs were applied in the mining model based on unit rates averaging A$2.54/dmt.

  • A net concentrate product price of A$145.50 (after deducting 5% government royalty).

  • Ore processing rate of 9.68 Mt/year at a cost of A$13.45/dmt.

  • Ore handling costs of A$2.99/dmt were added for additional ore mining cost, grade control, ore feed and reclaim from stockpile using Contractor unit rates.

  • Annual fixed mining overheads for the Owners team were applied as a unit rate of A$1.26/t to the ore tonnes processed.

  • Logistics costs of A$29.64/dmt for road, rail and port charges were supplied by MIO.

  • Overall pit slope angles of 27-33o in oxide and 27-41o in Fresh rock were based on geotechnical recommendations by Pells, Sullivan & Meynink.

  • Shell 20 with a revenue factor of 0.88 and a mine life of 20 years was selected as the basis for design. This shell captured 99% of the value within a pit containing 93% of the ore and 89% of the waste (when compared to the revenue factor 1.0 shell).

Mine Design

The design process provides a practical solution to the Whittle shells by adding an arrangement of benches, berms, roads and ramp systems. Dual lane ramps of 29 m and 10% gradient were designed to accommodate Caterpillar 798D trucks.

The final pit design comprises two separate pits with a total of seven internal stages. An overview of the final pit showing internal stages is presented in Figure 3.

Moonshine North pit is approximately 1,450 m long, 500 m wide and 225 m deep and Moonshine is approximately 3.7 km long, 700 m wide and 250 m deep. Each stage has a separate ramp system that exits on the west side to provide short hauls to waste dumps and ROM pad. The design process captured 0.9 % additional ore and added 6.6% additional waste than defined by the Whittle shell.

Figure 3. Pit designs showing stages and mineralisation coloured by DTR (CNW Group/Macarthur Minerals Limited)
Figure 3. Pit designs showing stages and mineralisation coloured by DTR (CNW Group/Macarthur Minerals Limited)

The final pits contain a total of 236.6 Mt at an average grade of 28.2% Fe and 31.3% DTR reported above a cut-off grade of 15% DTR. The total tonnage to be mined is estimated at 861.5 Mt at a strip ratio of 2.6:1. The Moonshine pits contains 85% of the magnetite ore with a lower strip ratio at 2.4:1 compared to the smaller Moonshine North pit which has a strip ratio of 3.8:1. The inventory by stage is presented in Table 3.

Mineral Reserves represent 87% of the Measured and Indicated mineral resources. The production target of the Feasibility Study is underpinned by 22% of Proven and 78% of Probable Mineral Reserves. No inferred resources have been incorporated into the Mineral Reserve or production target.

Table 3. Moonshine and Moonshine North Pit Inventories reported by stage

Stage

Ore

Grades

Waste

Total

S/R

Mt

Fe %

SiO2 %

Al2O3 %

P %

S %

LOI %

DTR %

Mt

Mt

W:O

1

22.4

28.3

50.5

1.5

0.05

1.2

1.2

31.2

53.8

76.2

2.4

3

22.2

27.8

51.6

1.2

0.05

0.9

1.4

31.2

65.3

87.5

2.9

5

69.9

27.3

51.9

1.3

0.05

1.0

1.4

30.7

154.0

223.8

2.2

6

55.9

27.4

52.1

1.3

0.05

0.9

1.4

31.1

135.3

191.3

2.4

7

30.2

26.7

52.7

1.8

0.04

1.1

1.7

28.5

79.1

109.2

2.6

Moonshine

200.6

27.4

51.9

1.4

0.05

1.0

1.4

30.6

487.5

688.0

2.4

2

6.4

31.8

43.8

1.3

0.05

1.3

3.0

35.0

52.1

58.5

8.2

4

29.6

33.1

39.3

1.8

0.06

1.5

3.7

35.1

85.4

115.0

2.9

Moonshine Nth

36.0

32.9

40.1

1.7

0.05

1.4

3.5

35.1

137.5

173.5

3.8

TOTAL

236.6

28.2

50.1

1.4

0.05

1.1

1.8

31.3

624.9

861.5

2.6

The blending strategy to manage silica levels reporting through to the concentrate requires stockpiling on long-term stockpiles. All material above a DTR cut-off of 29% was categorised as primary ore feed. The material below 29% and greater than 15% DTR was split into low and high silica categories as follows:

  • Low Silica stockpile: SiO2 in concentrate < 6.7%; and

  • High Silica stockpile: SiO2 in concentrate >= 6.7%

Primary feed ore will be hauled to the ROM pad and direct tipped into one of two crusher pockets or placed on temporary finger stockpiles from a skyway for later rehandle using a front-end loader (FEL). Each of four fingers has been designed with a capacity of 96,000 dt ore, sufficient for 14 days of feed. Based on the disparity between the primary crusher (1,265 t/h) and the excavator (2,080 t/h), the proportion of direct tip into the primary crusher is estimated to be approximately 60%.

A total of 295 Mt of oxide overburden requires pre-stripping to expose the ore within the Fresh BIF rock units. A further 328 Mt of fresh waste rock will be mined over the life of the operation. The waste material will be stored in three external waste dumps designed to a maximum height of 60 m.

The overall strategy for haul road design was for a central road linking the Moonshine and Moonshine North pits. The ROM pad was located close to the centre of mass between the two pits, with the waste dumps branched of the main haulage corridor providing flexibility for dumping of waste material.

Prior to commencement of mining, the disturbed areas will be cleared and the topsoil removed and stored in various stockpiles around the site. These have been strategically located to minimise haulage distances both during stripping and when reclaimed for rehabilitation of the waste rock dumps. The topsoil locations are shown in the general site layout plan, Figure 4.

Figure 4. General site layout (CNW Group/Macarthur Minerals Limited)
Figure 4. General site layout (CNW Group/Macarthur Minerals Limited)

Mine Production Schedule

Pre-production required a total of 28.1 Mt mined over an 11-month period comprising mostly oxide waste from Stage 1 with 164 Kt ore stockpiled for processing. The peak mining rate of approximately 43 Mt/year utilising 3 excavators is reached in year 2 and maintained for 14 years. The mining rate is reduced to two excavators for 7 years before reducing to a single excavator for the final 5 years of operation. Figure 5 illustrates the oxide pre-strip and fresh waste movements compared to the ore mined to the ROM pad for processing or to stockpile for blending.

Figure 5. Annual material mined by type (CNW Group/Macarthur Minerals Limited)
Figure 5. Annual material mined by type (CNW Group/Macarthur Minerals Limited)

The Contract mining operation will be conducted with two 12-hours shifts per day. Both Owners and Contractors management, technical and support personnel will work a 10-hour day shift. All personnel will be sourced from either Perth or Kalgoorlie on fly-in fly-out basis.

The operation will require a total fleet of 42 mining units comprised of three primary 350t excavators, eighteen 180t dump trucks, five dozers, two graders, two water carts, five drills, a wheel dozer, a small excavator for ancillary work, two large Front-end loaders, 2 trucks for rehandle and a single RC rig. Manning levels will vary over the life of mine peaking at 307 personnel, including 38 Owners staff and 13 Contractor staff.

8. Mineral Processing and Metallurgical Testing

A metallurgical drilling programme collected HQ sized core and split the core for assays and Davis Tube testwork. Half core was available for testing. As core was limited, sample selection focussed on maximising the inclusion of mineralised ore, whilst also including diluting intervals not rejectable by selective mining. The interval considered was a half bench height of six metres.

The composite details are provided in Table 4.

Table 4. Testwork composite details

Prospect

Hole Identification

Core Selected at BV

Sample Mass (kg)



Start

End

m


Moonshine

LGDD_006

144.0

265.0

121.0

965

Moonshine

LGDD_066

83.7

165.3

81.6

407

Moonshine

LGDD_067

69.0

135.6

66.6

332

Moonshine

LGDD_068

83.0

193.5

110.5

551

Moonshine

LGDD_069

88.0

115.0

27.0

135

Moonshine

LGDD_070

88.0

132.8

44.8

223

Moonshine

LGDD_070

143.0

152.4

9.3

47

Moonshine

LGDD_070

166.0

173.5

7.5

37

Moonshine

LGDD_072

56.3

117.2

61.0

304

Moonshine

LGDD_073

110.4

140.9

30.6

152

Moonshine

LGDD_073

200.0

269.7

69.7

347

Moonshine

LGDD_023

101.1

198.7

97.6

973

Moonshine Total

630

4473







Moonshine North

LGDD_071

81.8

162.0

80.2

400

Moonshine North

LGDD_074

47.1

71.0

23.9

119

Moonshine North

LGDD_074

80.7

98.9

18.2

91

Moonshine North Total

122

610

The magnetite testwork core drillhole locations are shown in Figure 6.

Figure 6. Magnetite testwork core drillhole locations (green) against preliminary site layout. (CNW Group/Macarthur Minerals Limited)
Figure 6. Magnetite testwork core drillhole locations (green) against preliminary site layout. (CNW Group/Macarthur Minerals Limited)

The testwork was performed at the Bureau Veritas Laboratory (BV) in Canning Vale, Western Australia, an ISO9001 certified Laboratory.

There were two test plans developed, one for magnetic separation and one for high pressure grinding rolls (HPGR) testwork. The test plans are described in full in the Feasibility Study Technical Report.

Head Assays

The composite head assays for Moonshine and Moonshine North are presented in Table 5 and a summary of the test work is presented in Table 6.

Table 5. Composite head assays

Composite

Fe

SiO2

Al2O3

P

S

LOI-1000


%

%

%

%

%

%

Moonshine Actual

30.7

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