There was bound to be a pull back and now it’s come, Alien still doesn’t look in too bad a shape.įor one thing, it’s got all the other assets in its portfolio to fall back on – drilling at the Elizabeth Hill silver project is ongoing, work on the Brockman iron ore project is underway, and although the coronavirus is hampering activity on the Mexican silver assets, progress is being made. That’s lead to a drop-off in demand for iron ore, and consequently a drop-off in the price too.īut bear in mind, that in the run up to this correction iron ore had previously been running really hot. The Chinese have abruptly implemented a go-slow for their steel manufacturing, partly because of a shortage of coal, and partly for environmental reasons. You pay a price and your buyer brings a ship in.”įenix Resources is already up and running to the south of where Alien is, with a project that looks pretty similar to Hancock – they’ve got buyers and they’ve shown it can be done.Īlien’s share price jumped 10% on news of the scoping study, and in other circumstances might have been expected to go even higher.īut the broader economic backdrop is hard to avoid. The port infrastructure’s in place – you can hire a facility at a nominal costs. “This type of high grade ore, and where it is – it’s economically viable,” he argues.Īfter all, if there’s one commodity Australians really know about transporting in bulk, it’s iron ore. “Our upside is big,” says Brodie Good, simply.īut now that the initial resource is in the bag, there are other things to be getting on with too. Handily, the higher grades tend to come at ridges at the surface, and initial surveys show that there are plenty of similar ridges that have yet to be drilled. He also highlights the grade, which at 60.4% is well above the usual economic threshold for profitable iron ore operations in this region. There are still kilometres of it that are untested.” “It’s better than expected as an initial resource,” he says, with the emphasis on the word ‘initial.’ That’s a nice number to be going on with, but Alien chief executive Bill Brodie Good reckons there could be plenty more to come.
HOW TO RISE OF IRON FREE
The study envisages a 1.25mln tonnes per year operation, with each tonne of iron ore costing US$60 to mine and deliver free on board, with a modelled iron ore selling price of US$100.Īccording to independent consultant Baker Geological Services Ltd, the inferred resource at the Hancock project in the Pilbara rings in at over 10mln tonnes. The company came a significant step closer to answering the first question at the end of September when it released drilling results, and has now taken another giant step with the release of a scoping study that shows the Hancock project to be capable of delivering significant margin. The remaining questions were: how much ore is there really there, and is it economic? We always knew that the iron ore ground held by Alien Metals Ltd ( LSE:UFO) in Western Australia was highly prospective in terms of grade and location.