卡拉拉铁矿项目进展
GINDALBIE COMPLETES KARARA CONSTRUCTION COST REVIEW
COMMISSIONING OF MAGNETITE CONCENTRATOR SCHEDULED TO COMMENCE IN JANUARY 2012 Gindalbie Metals Limited (ASX: GBG – “Gindalbie”) is pleased to advise that it has completed a comprehensive review of the construction cost estimate and development timetable for the Karara Iron Ore Project in Western Australia, as foreshadowed earlier this year.
Construction Cost
The revised total construction cost estimate for the Karara Project is A$2.57 billion, which is consistent with the guidance provided to the market in March (see ASX Release – 16 March 2011). The revised cost estimate is based on all available data from the detailed design for the Karara concentrator (currently over 95% complete) as well as tender prices for the final remaining major construction packages (structural, mechanical, piping and electrical and instrumentation) for the concentrator.
As previously foreshadowed, most of the increase (~70%) relates to increases in material quantities (such as concrete and steel) which have emerged as detailed design work nears completion and construction contracts are awarded. The balance relates to the higher cost of materials, labour and fuel due to general inflationary pressures and scope changes on the plant. Scope expansions relating to port and power line are expected to account for $125 million of the increase in forecast capital cost, which sets the project up for its first expansion phase.
The underestimation of material quantities has been the result of the Joint Venture’s strategic decision to commence construction at Karara in 2009 prior to completion of the detailed design process in order to ensure the Project was developed as quickly as possible in the increasingly-competitive WA construction market.
Approximately $1 billion of the overall construction cost is invested in the construction of infrastructure which is being built with additional capacity for an ultimately larger project at Karara. This up-front investment in infrastructure is expected to result in substantial cost savings over the long term as the Project increases production from an initial 8Mtpa of magnetite concentrate to its long-term potential of +30Mtpa. Approval has been given to start scoping studies on a proposed expansion of the Karara Project from its start-up production level to potentially 16Mtpa.
Funding
The ongoing construction of the Karara Project is underpinned by the existing US$1.2 billion Karara Project Loan Facility, which is currently drawn down to US$676 million, as well as the equity payments already made to Karara Mining Limited (KML) by Gindalbie and its partner Ansteel.
To cover its share of the estimated increased construction cost Gindalbie is considering equity alternatives that would give shareholders the opportunity to participate on an equitable basis. The Company is expected to be in a position to make a decision on the funding strategy for Stage One of the Karara Project in a few weeks time.
Gindalbie’s major shareholder, Ansteel, has indicated its commitment to support any equity raising, continuing its long-standing support of the Karara Project development.
As announced in April KML have signed a framework agreement for an additional US$336 million working capital facility to fund non-construction related working capital and financing expenses to be incurred prior to the emergence of positive cash flows, from the sale of magnetite concentrate during the second half of 2012. Operating Cost Review
The review of forecast operating costs for the Karara Project is nearing completion, subject to finalisation of key rail, port and mining contracts. Current indications are that forecast average cash operating costs will be in the
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