A new iron ore facility in Western Australia expects to start mining in early 2017.
Final approval for the Iron Hill mine, being developed by Mount Gibson Iron Limited (ASX:MGX), came from the Western Australia environment minister.
The state’s environmental protection agency (EPA) gave the project the green light in July. The new mine, located just 3 km from the company’s existing Extension Hill operation, is expected to offset an imminent output drop as mining at Extension Hill will cease by the end of this year. It will use the existing mine’s facilities and logistics arrangements.
Iron Hill has 8.8 million tonnes of indicated and inferred mineral resources graded at 58.3% iron content.
“We welcome this important environmental approval of the Iron Hill mine, which takes us one step closer to commencing mine development in early 2017,” Mount Gibson Iron CEO Jim Beyer said in a statement published on Friday.
The announcement bumped Mount Gibson Iron’s stock price by 4.6% on Friday, to 34 cents a share.
The company expects to sell 2.8 to 3.1 million tonnes of product in the 2016-17 financial year, with all-in cash costs in line with those of Extension Hill.