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Korab Resources' Winchester magnesite deposit a low cost DSO operation
2015-01-19
Jan. 14, 2014 - Korab Resources has completed a pre-feasibility study indicating a low capital cost of $4 million to develop the Winchester magnesite deposit in the Northern Territory as a direct shipping ore operation.
Operating costs at 1 million tonnes run of mine per annum is estimated at $21 per tonne of saleable coarse magnesite.
The study is based on a JORC 2004 Resource of 16.6 million tonnes at 43.2% MgO.
Korab is continuing to evaluation proposals to start mining of magnesite from the deposit.
Evaluation involves review of several development proposals, all of them being direct shipping ore operations but with different schedules, outputs, end users and partners.
No decision to commence mining or to enter into any development, sale, off-take, or joint venture agreements with any of the interested parties has been made as yet.
Pre-Feasibility Study

The PFS was completed by using information collated and prepared by Golder Associates Pty Ltd, the company, URS, Bateman Tenova and Devmin Consultants.
This has an estimated accuracy of +/-30% and consequently a 30% contingency has been added to all capital and operating costs.
It assessed capital and operating costs of the Winchester project supplying a direct shipping ore crushed on site to 25mm and screened to separate fines.
No additional processing of magnesite rock was evaluated.
The output from the quarry would consist of crushed magnesite rock with a waste stream consisting of waste rock and fines which would be stored on site.
The estimated ratio of coarse saleable magnesite rock to fines was 80%.
This study showed that there may be a market for magnesite fines in agriculture and feedstock production; however any potential revenue from sale of fines has not been included in this study.
The study assumed that contractors would be used for majority of project operating tasks thus reducing capital costs by limiting the need for owner operated equipment.
Capital cost has been estimated for the development of open pit operations with required access roads, diversion channels, waste and water management and site infrastructure etc.
Two variants were evaluated, bench-bench and staged development.
The study was based on a conceptual mine that could operate at various capacity levels, 250,000tpa ROM capacity, 500,000tpa ROM capacity and 1,000,000tpa ROM capacity.
Under the staged development variant the capital costs will be slightly reduced but the operating costs will not change. However, the difference in capital costs estimates between the two development variants is negligible and can be disregarded for the purposes of this study.
The company also undertook high level assessment of alternative method relying on continuous surface miners and ancillary equipment for moving the in-situ crushed ore and for direct loading onto trucks.
This option reduces the handling costs, drilling and blasting and eliminates the need for primary crushing (and potentially secondary crushing).
Preliminary assessment of the alternative method suggests that the use of continuous miners with either an integrated loading system, or a wheel loader and conveyor would yield 20%-30% operating cost savings compared to the shovel and truck method.
Consequently, Korab will undertake more detailed assessment of this method.
Results of the study show that average waste rock to ore ratio for the entire mining operation is 0.5 to 1 though the actual ratio will fluctuate over the life of the project.
Winchester Magnesite Deposit

The Winchester magnesite deposit is located approximately 85 kilometres south of Darwin in the Northern Territory, less than a hundred meters from sealed road, and less than 5 kilometres from railway line.
The deposit is a shallow, flat laying body covered by up to 5 meters of soil overburden. It can be mined at a low cost by open cut method.
Related Reading
Korab Resources gets export capacity at Darwin   2017-11-09
Korab Resources : Chinese firm invests $6m in Korabs Winchester magnesite project   2016-03-24
Korab mulls restructure after December's MoU for Winchester magnesite mine   2016-01-12
Korab Resources inches MoU to develop magnesite in Winchester   2015-12-09
Korab signs Winchester magnesite heads   2015-11-05
Korab gains magnesite mining licence at Winchester   2015-10-23

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