US iron ore – global expertise
Nevada Iron is focused on the development of the Company’s 100% owned Buena Vista magnetite project. Located in the mining friendly state of Nevada in the United States the project offers investors a low risk entry into an emerging steel mill feedstock.
The United States provides mining companies with well situated and established infrastructure with road, rail and port facilities all in place. For Buena Vista, this established infrastructure reduces the development costs by well in excess of a billion dollars and significantly shortens the time taken to get the project into production.
Inclusive to the many advantages inherent in BuenaVista are the low capital cost, the very low risk political environment, the cash costs which are equivalent to or better than the majority of emerging magnetite producers and the relatively short time to production. The project also represents a much lower operational risk than most emerging producers because of the proposed scale of production.
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Buena Vista - USA - Overview
Buena Vista is a magnetite iron deposit that was discovered in 1898, intermittently mined in the 1950s and 1960s and most recently explored by US Steel in the period 1961-1979 as a potential feed for a US based smelting plant. At least 320 diamond holes have been completed over the whole property, together with extensive metallurgical test work and mining studies.
As part of a their studies, US Steel outlined substantial pre-JORC reserves and resources within the West, South Central, Iron Point, Southwest and Section 5 deposits. These deposits within the historic pit designs had a combined waste to ore ratio of less than one.
All of the current JORC resources and reserves at the Buena Vista project are on private land under patented mining claims. This is an important consideration within the United States and allows Nevada Iron to fast track development through accelerated approvals.
In addition, Buena Vista is located approximately 40 kilometres from the Union Pacific rail line that connects to port facilities at Sacramento, Stockton, Richmond and San Francisco.
In January 2010 Nevada Iron entered into an option to purchase a 100% equity in the project and in June 2011 this option was exercised.
The purchase price of US$6,000,000 was satisfied by the payment of US$3,000,000 in cash and by the issue of 6,187,092 fully paid ordinary shares in the capital of Nevada Iron.
NI-LLC (a 100% owned subsidiary of Nevada Iron) now owns 100% of the Project and the vendor (Kircher Mine Development LLC) retains a 20% beneficial and net profits interest (“NPI”). NI-LLC has an additional 18 months to acquire from Kircher the outstanding 20% beneficial interest and NPI for a cash consideration of US$2 million or alternately US$1 million in cash and the granting of a gross revenue royalty of 1.5%.
Feasibility Study
At the end of November 2010, Nevada Iron commissioned GR Engineering Services (GRES) to prepare a Feasibility Study (“FS”) for the proposed development of the Buena Vista magnetite ore deposit. The development concept involves an open pit, producing on average some 6 million tonnes per annum of ore along with a similar tonnage of waste per year. Following crushing and grinding the ore is to be concentrated by conventional wet low intensity magnetic separation (Wet LIMS) to produce a high grade concentrate assaying 66-69% total iron (Fe) at an annual production rate of between 1.6 and 1.8 million tonnes. Plant tailings will be discharged to a tailings storage facility (TSF) adjacent to the plant site.
In addition to GRES, RHM selected a Nevada based engineering group, TEC Engineering (TEC); located in Reno to conduct investigations and prepare capital and operating costs for the supply of local services in particular water, power, and general civil construction requirements for the Project. In addition TEC assisted in obtaining local costs for construction materials along with general civil engineering supplies.
The FS confirmed that the Buena Vista Iron Project is an economically robust, long-life iron ore project which will generate substantial returns for the Company and deliver significant benefits to the local Churchill Pershing and Counties and the State of Nevada.
Location & Infrastructure
The Buena Vista project is located in western Nevada, around 450km northeast of San Francisco. Access to the project area is via Interstate 80 to Lovelock (around 107km east of Reno) and then 38km from Lovelock via Interstate 80 and Coal Canyon road, which is a bitumen road for the majority of the distance.
A rail head is located at Lovelock and the Southern Pacific railway that parallels’ Interstate 80 connects to four ports in the San Francisco region.
It is proposed to construct a rail siding at Colado which is at the junction of Coal Canyon Road and Interstate 80. Concentrate will be transported from the mine site to this siding by slurry pipe, dewatered and then trained to the ports.
Grid power is available within 10 km of the site and it is proposed to utilise grid power for all of the proposed operations energy requirements.
Sufficient water has been sourced from ground water aquifers located in the North Carson Sink, 2 miles southwest of the mine site. A total of five wells will be drilled to provide all the water requirements at the mine site.
An application was made to the Nevada Department of Conservation and Natural Resources (Division of Water Resources) for 1,750 acre feet per year, equivalent to 2,159,000 m3 per year, which has been granted for the life of the mine. The water will be pumped some 3.8 km from the bore field to the beneficiation plant.
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| Proposed Rail Siding Site – Colado | Coal Canyon Road |
Land Title
The Buena Vista magnetite project contains mineral rights over approximately four square miles secured through lease agreements on 45 patented mining claims (covering 808.7 acres) and former railroad fee title land (525.8 acres). Included within the four square miles of mineral rights are also 70 unpatented mining claims on Federal land. Full surface rights are included as part of the lease agreements over the patented mining claims.
The patented claims and fee title land are subject to royalties to the beneficial owners, the former with RGGS Land and Minerals Ltd, LP (RGGS) and the latter with Nevada Land and Resource Company, LLC (NLRC).
On 22 June 2011, Nevada Iron announced that NI-LLC had acquired the surface rights to the Section 5 patented land claim that comprises some 525.75 acres.
The acquisition of the Section 5 surface rights provides NI-LLC with full surface rights to the land that will house all of Buena Vista’s proposed production facilities, plant, workshops, stockpiles and the tailings dam.