GRANGEX AB On
The Company is today pleased to announce the results of an Updated Feasibility Study ("DFS") for Dannemora, confirming Dannemora's technical and economic viability to be a producer of high-grade magnetite concentrate. The Updated DFS was completed by
Together with the Company's recent acquisition of the brownfield Sydvaranger iron ore mine in
Updated DFS Summary:
Net Present Value at 8.0% (Pre-Tax) | |
Internal Rate of Return (Pre-Tax) | 25.6% |
Life of Mine ("LoM") | 11 Years |
Average Annual 68% Concentrate Production | 1.085 Mtpa |
Long-Term Average Product Price (CFR China) | |
Cash Operating Cost (FOB/tonne Oxelösund Port) | |
Pre-Production Capital Expenditure | |
Total Capital Expenditure (Including LoM Capital Expenditure) | |
USD / SEK Exchange Rate | 10.5 |
A full copy of the Executive Summary of the Updated DFS is available on the Company's website at: www.grangex.se
Conclusion
The conclusion from SLR is that based on the results of the DFS and future market expectations, Dannemora should be advanced to the next stage of development and project financing. Furthermore, SLR have identified a number of potential opportunities to further improve and optimize the development of Dannemora which will now be considered by the Company.
Grangex will now, together with its advisors, continue the development of Dannemora towards a final investment decision. Further announcement regarding Dannemora project development will be made by the Company as appropriate.
The most important contribution by Dannemora, once in production, is filling the supply gap by production of approximately 1.1Mtpa of high-grade magnetite concentrate that will enable customers to produce approximately 700,000t of fossil-free steel, thus reducing their Scope 1,2,3 emissions by more than one million tonnes of CO2 equivalent annually.
Developing mining projects is a complex process and it is therefore essential that we have the most up to date technical and economic validation of Dannemora. This Updated DFS provides to us confirmation that Dannemora is a robust project with strong development potential.
Dannemora is the project upon which Grangex was founded and we now look forward to taking the next steps in the mine's development. Together with our recently acquired Sydvaranger project, we are delivering on our promise to become a leading player in the `green iron ore' sector and to make the Nordics once again a showcase for mine development.
I would like to thank the SLR team, other related advisors and the Grangex team for their hard work in delivering this Updated DFS."
DFS Highlights:
Financial Evaluation
A cashflow model evaluation has been completed for Dannemora, analyzing capital costs, operating costs and revenue on an annual basis over the full 13-year project life. The Dannemora plan comprises a 28-month pre-development period, followed by 11 years of mine production and processing to a saleable high-grade magnetite concentrate.
A financial model for Dannemora has been prepared based on a run-of-mine ("RoM") estimate of approximately 30.95Mt @ 30.62% Fe, 1.75% Mn and 0.21% S, and on LoM physical schedules, capital and operating costs, discount rate and revenue assumptions provided by the Company and compiled by SLR.
A conventional discounted cashflow model has been prepared to derive a Dannemora NPV, IRR, payback period and cashflow results on a before and after-tax basis. A standard discount rate of 8% has been applied that considers cost of capital and geographical risk.
Based on the DFS capital expenditure and operating cost inputs, Dannemora generates a pre-tax
Pricing
Current indices for high-grade concentrate (MB65 or Platts IODEX65) are forecast to be at an average level of
In order to establish the Oxelösund Port FOB price, long-term freight rates from
Capital Expenditure
Total pre-production capital expenditure for Dannemora has been estimated at
In the capital expenditure calculations, leasing has been used to finance a major part of the underground equipment (such as loaders, drill rigs and trucks). Leasing has also been used to finance part of the electrical equipment.
The leasing for the underground equipment has been based on a 15% downpayment and the balance payable over the lifetime of the equipment and the monthly leasing cost calculated as operating costs. The leasing of the electrical equipment is based on a proposal received from a major player in electrical power industry in
Capital expenditure
Capital Cost | Cost (US$m) |
Initial | 215.1 |
Sustaining | 47.3 |
Total | 262.4 |
Pre-production capital expenditure (excluding contingency and indirect expenditure)
Initial Capital Cost | Cost (US$m) | % Cost |
Civil Works | 43.2 | 25% |
Mine Dewatering | 6.3 | 4% |
Mine | 32.1 | 18% |
Ore Treatment | 77.3 | 44% |
Infrastructure | 16.0 | 9% |
Total | 174.9 | 100% |
Indirect and contingencies
Other Capital Cost | Cost (US$m) |
Indirect | 21.9 |
Contingency | 18.3 |
Total | 40.2 |
Operating Costs
For Dannemora, total operating costs have been estimated at approximately
Expenditure is comprised of key areas throughout the project life as detailed in the table below. Unit operating costs per tonne of ore processed are also provided. Estimates have been based on quotations and in-house estimates prepared by the Company within a within a +/- 10 - 15% order of accuracy, reviewed and compiled by SLR.
Operating costs
Operating Cost | US$/t Product | |
Mining | 285 | 27.1 |
Processing | 150 | 14.3 |
General & Administration | 39 | 3.7 |
Logistics | 145 | 13.8 |
Closure | 1 | 0.1 |
Leasing Related Costs | 44.5 | 4.2 |
Total | 664.7 | 63.3 |
Mineral Resource Estimate2)
The Mineral Resource Estimate produced for inclusion in the Updated DFS is compliant with the principles as set out in JORC-2012.
Mineral Resource Estimate for
Category | 2024 | 2022 | ||||||
Tonnes | Fe% | Mn% | S% | Tonnes | Fe% | Mn% | S% | |
Measured | 17,344,000 | 37.19 | 1.92 | 0.27 | 17,319,000 | 37.49 | 1.90 | 0.25 |
Indicated (In Situ) | 11,622,000 | 34.74 | 2.35 | 0.27 | 11,882,000 | 34.66 | 2.20 | 0.27 |
Sub-Total | 28,966,000 | 36.21 | 2.09 | 0.27 | 29,201,000 | 36.34 | 2.02 | 0.26 |
Indicated - Tailings | 2,200,000 | 21.00 | 2.50 | 0.19 | 3,000,000 | 22.50 | 2.50 | 0.19 |
Total Measured + Indicated | 31,166,000 | 35.14 | 2.12 | 0.26 | 32,201,000 | 35.05 | 2.07 | 0.25 |
Inferred (In Situ) | 5,709,000 | 34.16 | 2.32 | 0.13 | 5,948,000 | 33.33 | 2.27 | 0.15 |
The principal differences between the 2022 and 2024 Mineral Resource Estimates are:
- Addition of recently assayed samples which filled in gaps where the grades had either been set to 0% Fe and thus diluted the overall grade or not been included in the wireframing process thereby reducing tonnage;
- Re-classification from inferred to indicated of the tailings stored underground during the previous production phase;
- Recently acquired information on the previous depletion in Upper Konstäng mine body removed a substantial part of its tonnage; and
- Further studies on the recovery of the previously deposited tailings in Upper Konstäng have concluded that some 800,000t not recoverable due to geotechnical risks
Ore Reserve Estimate3)
The Mineral Resource Estimate presented above has been subject to detailed mine planning, including the consideration of expected or actual Modifying Factors such as, waste inclusions (dilution), and planned and operational ore losses. The resulting tonnage is therefore considered to be a Probable Ore Reserve.
The tailings included in the ore reserve estimate are based on tailings historically placed as backfill in a number of the stopes in the Konstäng and Kruthus orebodies, in the south of the
All Orebodies | Diluted tonnes (kt) | Diluted Fe-grade (wt%) | Mn-grade (wt%) | S-grade (wt%) |
Total | 30,949,000 | 30.62 | 1.75 | 0.21 |
Qualified Persons (CP JORC)
Competent Person for Mineral Resources: Mr.
Competent Person for Ore Reserves: Mr.
Competent Person for Mineral Processing: Mr.
Competent Person for Process Plant Engineering: Mr.
Notes
1) The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ('the JORC Code') is a professional code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and Ore Reserves. The JORC Code provides a mandatory system for the classification of minerals Exploration Results, Mineral Resources and Ore Reserves according to the levels of confidence in geological knowledge and technical and economic considerations in Public Reports.
2) As defined under JORC, a `Mineral Resource' is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
3) As defined under JORC, an `Ore Reserve' is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported.
4) A Table 1 according to JORC will be published shortly.
Contact person
This is information that
Grangex is a sustainable mineral development company headquartered in
ISIN code: SE0018014243
Instrument ID: 9XX
Legal Entity Identifier (LEI) number: 549300MZ7HL7X6AXMC13.
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