AKORA Resources (ASX: AKO) is progressing the development of its Bekisopa direct shipping iron ore (DSO) project in Madagascar, targeting an annual production of up to 2 million tonnes. The high-grade iron ore project boasts an average grade of 61.6% iron, intended for export to blast furnace-basic oxygen furnace (BF-BOF) steelmakers. A recent pre-feasibility study (PFS) indicates the potential to upgrade ore concentrate to over 68% iron at 75 microns, catering to direct reduced iron-electric arc furnace steelmakers for greener steel production.
The PFS significantly upgraded the results of a previous scoping study, confirming the project’s economic viability. At a benchmark price of $150 per tonne for 62% iron grade ore, the project exhibits a pre-tax net present value of approximately $229 million and an internal rate of return of 86%. This is based on an initial capital cost of $94.3 million, with C1 cash costs of $85.30 per tonne and a pre-tax capital payback period of 1.8 years from initial production. Over the life of mine (LOM), the project could generate a pre-tax cash flow of $482 million from revenues of around $1.2 billion.
AKORA’s staged development strategy for Bekisopa received a boost with the renewal of the project’s main tenement by the Madagascan Mining Ministry. The company will initially focus on mining, crushing, and screening at-surface ‘weathered zone’ iron ore to produce a LOM average blended grade of 61.6% across lump and fines products for shipment to BF-BOF steelmakers via the port at Toliara. The company is targeting average LOM grades of 61.4% for fines and 61.8% for lump products.
