Charter Pacific, Mauritanian government partner in DSO iron ore project

CHARTER Pacific Corporation has attracted the Mauritanian Government as a 20% partner to its new hematite deposit containing direct shipping iron ore.

The successful bid was announced in late May. The hematite mining permit covers 995km2 and importantly is adjacent to Charter Pacific’s existing Exploration Permit 792. It increases the total Mauritanian footprint of 3,246km2 for iron ore.

It is easy to see the reasons why the project was so compelling given it is such an advanced DSO iron ore project with infrastructure either in place or close to completion. More than US$45 million has been spent on resource drilling, pre-stripping of the mine site, port preparation and haulroad build for the Legleitat Ore Deposit by the previous permit holder.

Operating costs are likely to be at the low end of around US$50 a tonne free on board which provides a strong profit margin even at current iron ore prices. A pre-tax NPV of US$112 million was estimated by an independent third party based on an iron ore price of US$94/tonne.

The DSO is currently defined as an Inferred Resource of 12.2 million tonnes grading 59% iron (CaFe grade 62.7% Fe). The plan is to establish a 1 million tonne per annum shipped operation for +10 years. However, this tonnage is likely to be significantly increased if other access routes can be opened.

The project also appeals as there is a likely short lead time to deliver product for shipping to market, possibly under 12 months.