CuFe Ltd (ASX:CUF) is continuing strong work across its iron ore projects with a Mining Management Plan approved for the next Yarram drilling program starting this month and JWD mine operations benefitting from a recent sales contract.
The company is also putting plans in place to ensure its team remains stable in a challenging labour market. CUF will allocate key staff and 34.25 million options at an exercise price of 2.7 cents and two-year expiry, vesting after 12 months.
CuFe intends to keep its team intact and robust to meet any upcoming challenges and continue to stay focused on its aim of developing near-term, high-grade premium product iron ore projects.
Drilling at Yarram
CuFe’s immediate focus is on its upcoming drilling program at the Yarram Iron Ore Project.
The company holds a 50% interest in Gold Valley Iron and Manganese Pty Ltd, the owner of the iron ore rights over the Yarram Project which is about 110 kilometres from Darwin Port.
CuFe’s work at the project was recently assisted by the approval from the Northern Territory Department of Industry, Trade and Tourism of an exploration Mining Management Plan (MMP).
The MMP facilitates three streams of work:
The company completed heritage clearance of the proposed drill lines this week with the direct involvement of representatives of the Traditional Owners.
Drilling is expected to start in September and take around 30 days to complete, with assay analysis to follow.
“Yarram has always been an exciting project for us given there are so few iron ore projects in Australia that host high-grade iron ore so close to available capacity at an established port," CuFe executive director Mark Hancock said.
"COVID restrictions impacted our ability to get our people on the ground and move the project along but with that now behind us we have made significant progress in recent months and look forward to drilling recommencing.”
What’s happening at JWD
CuFe has implemented cost and production initiatives assisting in maximising revenue and minimising costs at its 60%-owned JWD Project.
This is complemented by monthly shipments of high-grade lump product delivered for each of the past four months under the previously announced sales contract to a Southeast Asian steel mill.
For its August and September shipments, it entered an agency arrangement with Gold Valley Iron Ore Pty Ltd allowing CuFe to jointly ship tonnes from the neighbouring C4 project with JWD product so that shipment volumes can be maintained while reducing its exposure to the iron ore price while the headline index price is depressed (with current levels below US$100/DMT for 62% material).
CuFe has also recut its JWD mine plan to reduce near-term waste movement, which reduces total mining costs. Combined with a significant fall in sea freight cost and the company’s iron ore price hedge coverage, this has allowed operations to continue economically.
Further to this hedge coverage is in place for most of its proposed September and October shipment volumes at an average 62% Fe fines equivalent price of US$147/DMT and will continue to monitor market conditions closely to determine the economics of further shipments.
“With regards to our existing mining operations at JWD we are making some great inroads with the cost and efficiency of our operations," Hancock said.
"The iron ore price is tough for smaller miners at present so we are fortunate at CuFe to have a team that is very experienced in dealing with price volatility and can calmly manage through the process.
"Our focus at present is to preserve cash and tonnes during the downtimes to maximise our ability to participate in the upside when the market turns,”
CuFe’s ownership in the project comes via its subsidiary Wiluna Fe Pty Ltd as operator of the joint venture (JWD JV).