Project Overview

The Yalgoo Iron Project concept envisages the mining of magnetite iron ore from the Yogi deposit, which is 100% owned by Ferrowest and located 14km east of Yalgoo in the mid west region of Western Australia. The magnetite ore would be crushed and fed into a beneficiation plant, to be located at the mine site to produce around 1,500,000 tonnes per annum of magnetite (iron ore) concentrate grading 67% Fe.

The magnetite concentrate would then be transported 185Km by road tains (90 tonne trucks) via the existing Geraldton to Mount Magnet Highway to a site called Eradu, 60Km east of the Port of Geraldton.

The plan is to construct and operate a 1 million tonne per annum merchant pig iron plant ("MPI") using ITmk3(R) technology at Eradu. MPI is a value added 96%Fe iron product (in the physical form of iron nuggets) that is used as feedstock for high quality steel making, primarily by electric arc furnace (“EAF”) production methods.

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The high value MPI product (worth 4 to 5 times the value of direct shipping iron ore) can be stored in the open, is easy to handle, does not generate dust and does not present a combustion risk during shipping.

It is currently planned that the MPI product would be transported 60km on the existing railway from Eradu to the Port of Geraldton where it can be stockpiled. Ship loading will occur over Berth's 4 or 5 because unlike iron ore, MPI will not contaminate the ship loaders.

The project also envisages utilising natural gas for power generation, reduction of the ore and smelting with gas sourced from an existing gas pipelines at Eradu and the Yogi mine site.

The MPI market is growing rapidly with strong demand from EAF steel makers (35% of world steel production) who produce quality steel products (particular flat products). These steel makers require a source of low contaminant iron units (such as Ferrowest MPI) to supplement the scrap iron that is the predominant feedstock used by the EAF steel mills. The expanding world steel production has caused a shortfall in low contaminant scrap iron that in turn must be met by ‘scrap alternates’ such as MPI, direct reduced iron (“DRI”) and hot briquetted iron (“HBI”). Of these three products MPI is the premium product because of its higher metallised iron content and ease of shipping and storage.

At 1 million tonnes per annum of MPI, the project is expected to generate over A$400,000,000 revenue annually from this value added product.