![](https://www.hancockprospecting.com.au/wp-content/uploads/2023/06/6zsh8qyz_400x400.jpeg)
Gina Rinehart’s Hancock Prospecting has delivered a prefeasibility study as part of its earn-in of Legacy Iron Ore and Hawthorn Resources’ Mt Bevan magnetite project, 100km west of Leonora in Western Australia’s central Yilgarn.
Hancock has been eyeing Mt Bevan since late 2021 and kicked off a PFS through its Atlas Iron subsidiary the next year.
The PFS, based on a recently upgraded 1.29 billion tonne at 34% iron resource, defined a A$5 billion development highly sensitive to future iron ore prices for a 70% direct reduction iron product that could obtain a significant premium to prevailing prices.
Pricing estimates ranged between US$116.30-181.70/t with a midpoint of $152.40/t.
The project is designed as a 12 million tonne per annum operation with C1 operating costs of $64/t (A$99/t), with a net present value range between A$740 million and $3.6 billion.
The 25-year mine life would be supported by a 125km-long slurry pipeline to connect Mt Bevan to a rail terminal at Menzies. The ore would then be exported out of Esperance.
Hancock now owns 51% of the project alongside Legacy (29.4%) and Hawthorn (19.6%).
As part of its move to 70% Hancock will fund further define, optimise and derisk the project, examining options to acquire tenure to support water exploration and service corridors, power supply alternatives and other preparatory works for a mining licence.
Legacy CEO Rakesh Gupta said the PFS put “real numbers” around the world-class potential at Mt Bevan.
Hawthorn managing director Brian Thornton said the PFS had been a complex undertaking for a greenfields development that could unlock a next-generation iron ore project with one of Australia’s highest-grade in situ magnetite deposits.
A statement from Hancock complained that while the project’s technical merit was clear, “Australian government tape and the approvals process in Australia add uncertainty to the project”.
The most recent magnetite development in Australia was the Fortescue-led Iron Bridge operation in the Pilbara, which cost almost $4 billion and was targeting 5Mtpa in year one. However, leaks in the Canning Basin high-pressure raw water pipeline have limited plant capacity.
Despite the setbacks, Iron Bridge’s mining operations remained on schedule, and no ‘showstoppers’ were identified during the commissioning process.
Iron Bridge was budgeted at US$2.6 billion but ended up costing $3.8 billion.
When ramped up, it will target 22Mtpa.
Other large magnetite operations are being examined in WA and South Australia.
Legacy shares were up 7% this morning at A1.5c, valuing the company at $116 million. Hawthorn’s stock was steady at near 12-month lows of 6c, valuing it at $20 million.