IRON ROAD LIMITED 28 July 2022
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QUARTERLY ACTIVITIES REPORT
For the period ended 30 June 2022
JUNE QUARTER REVIEW
Central Eyre Iron Project
useProposals that offer shareholders value with respect to the quality and advanced status of the Company's asset base will continue to be evaluated. A well understood feature of the high barriers to entry iron ore industry, is the scarcity of credibly advanced, high product grade greenfield development opportunities globally. This thematic continues to provide fundamental support for development prospects of the CEIP irrespective of short-term volatility in iron ore prices.
Iron Road Ltd's (ASX:IRD, Company) key focus continues to centre on patient and productive Central Eyre Iron Project (CEIP)
ngagement with potential strategic partners. The key attributes that have driven sustained strategic interest in the CEIP are
as outlined in the most recent March Quarter Review.
The Wood Mackenzie June 2022 chart below categorises the project pipeline according to expected product grade, post-tax Internal Rate of Return (IRR) and annual nameplate design capacity (relative circle sizes). In conjunction with each project's respective (internal) CAPEX and OPEX estimates, Wood Mackenzie's base case iron ore price forecasts and associated premiums or discounts that apply respectively to products above or below the reference 62% Fe grade for Sinter Fines, underpin the IRR metrics shown.
Importantly, as per the notes below, Wood Mackenzie differentiate projects that are either under construction or well advanced from the remaining balance of earlier stage projects that in total, comprise their view of the global project pipeline.
personal | 45 | ||||||||
40 | Bloom Lake Phase II | ||||||||
35 | |||||||||
IRR (%) | 30 | Hawsons | |||||||
25 | Zogota | Shymanivske | |||||||
Central Eyre | |||||||||
South West | |||||||||
For | tax | 20 | |||||||
Ashburton Hub | Creek Hub | Nimba | Casa de Pedra greenfield expansion | ||||||
Post | Kami | El Aouj | Blotberget | ||||||
15 | |||||||||
Mary River | |||||||||
Phase III | Iron Bridge | ||||||||
10 | West Pilbara | ||||||||
Mary River Phase II | |||||||||
Iron Ore | Southdown | ||||||||
Pampa de Pongo | |||||||||
5 | |||||||||
Pilbara Iron Ore Project | Simandou | Zanaga | Askaf | ||||||
(Blocks 3 and 4) | Mesabi Metallics | ||||||||
0 | |||||||||
55 | 60 | 65 | 70 | 75 | |||||
Fe grade (%)
Source: Wood Mackenzie, Iron Road, other project owners
- Blue/orange circles denote advanced project status (ie. construction phase or BFS/DFS completed). Dotted circles denote projects at PFS or scoping study stage.
- Central Eyre data sourced from Iron Road's post DFS and subsequent optimisation studies ASX announcement - "Revised CEIP development strategy reduces project CAPEX requirements by 56%", 25 February 2019. Iron Road 2018-19 data escalated to real terms in-line with CPI.
- IRR calculated using Wood Mackenzie's Q2 2022 price forecasts.
GPO Box 1164, Adelaide SA 5001, Australia | T +61 (8) 8214 4400 admin@ironroadlimited.com.au | ironroadlimited.com.au | ABN: 51 128 698 108
At a recent May 2022 Global Metals, Mining & Steel Conference, Vale S.A., the industry's highest grade iron ore producer amongst top global suppliers, noted that underestimated supply-side restrictions were a major contributing factor leading to market consensus iron ore price forecasts consistently falling short of actual commodity price performance.
Notwithstanding demand-side challenges materialising over recent months, Vale's analysis indicates 2022 is likely to be the 7th consecutive year (2016-2022 inclusive) where market analysts' median iron ore price forecast (1-year forward looking) will be lower than the subsequent average yearly price realised.
onlyMine depletion rates (orebody replacement + lowering of grades), complex licensing processes requiring adherence to stringent ESG standards, careful traditional landowner engagement and continued industry capital discipline are critical industry factors that will likely provide fundamental support for enduring constraints on the supply-side.
usepersonalCape Hardy Green Hydrogen
As communicated in its 27 July 2022 Cape Hardy green hydrogen hub update, the Company is very pleased with the market sounding outcomes facilitated jointly with WSP Australia. A shortlist of 10 domestic and international green hydrogen proponents have requested to partake in the Company's formal Expression of Interest (EoI) process following execution of non-disclosure agreements and access to relevant data room material.
Interested parties primarily comprise globally significant players in the power generation business and emerging energy transition groups with a focus on harnessing quality renewable energy resources for green hydrogen production. The competitive EoI phase is targeted to close during 4Q 2022, with the successful proponent or consortium of proponents expected to enter preliminary commercial arrangements with Iron Road.
The Australian Hydrogen Conference was held during 31 May - 1 June 2022 in Adelaide with more than 700 delegates. Attended by Iron Road, the conference was well timed with respect to the Company's market sounding process. Strong South Australian government support for Cape Hardy was evident with the Premier, Hon Peter Malinauskas MP referring to Cape Hardy in his opening address and introductions facilitated by representatives from the Department for Energy and Mining (DEM). These introductions were further strengthened at the Australia Japan Business Co-operation Committee (AJBCC) dinner attended by the Company's General Manager and CEO at the invitation of the Department for Trade & Investment (DTI).
For
Australian Hydrogen Conference - Australia Japan Business Co-operation Committee (AJBCC) dinner 1 June 2022 (Photo: DTI, SA Government)
ironroadlimited.com.au | ASX: IRD | Page 2 |
Cape Hardy Stage I grain-led port proposal
Iron Road, Eyre Peninsula Co-operative Bulk Handling (EPCBH) and Macquarie Capital (Macquarie) are parties to a September 2020 Joint Development Agreement (JDA) based on advancement of the originally proposed Cape Hardy Stage I multi-user,multi-commodity(grain-led) port facility.
With the Company already having incurred significant expenditure to date relating to JDA activities, both EPCBH and onlyMacquarie are understanding of Iron Road's primary ongoing focus on both the CEIP and Cape Hardy green hydrogen hub /
industrial precinct proposal. As a logical medium and long-term freight advantaged location for Eyre Peninsula grain exports, investigations will continue into the optimal business case for grain handling, storage and export facilities at Cape Hardy. Short-term activities will centre on monitoring of existing supply chain / logistics performance associated with the upcoming 2022 harvest.
Corporate
At quarter end, the Company held cash reserves of $1.9 million and no debt. Iron Road also retains a Subscription Agreement with Bulk Commodity Holdings LLC, a US based investor, for a private placement of IRD shares with a subscription amount of $1.25 million. The new funds are expected to be received from October 2022. Iron Road's Appendix 5B includes amounts in item 6.1 representing the payment of Director fees during the June quarter.
Tenement Schedule - 30 June 2022 | ||
useSouth Australia | Tenement Reference | Interest |
personalFor | Warramboo | ML6467 | |
Authorised for release by the board of | Iron Road Ltd | ||
Warramboo | EL5934 | ||
Lock | EL6425 | ||
Mulgathing | EL6012 | ||
EL6173 | |||
EL6502 | |||
EL6532 | |||
EL5767 | |||
Mulgathing | EL5998 | ||
EL6569 |
For further information, please contact:
100%
100%
100%
100% interest in iron ore rights
90% interest in iron ore rights
Larry Ingle, Chief Executive Officer | Jarek Kopias, Company Secretary |
Iron Road Ltd | Iron Road Ltd |
Tel: +61 8 8214 4400 |
ASX: IRD admin@ironroadlimited.com.au https://ironroadlimited.com.au
ironroadlimited.com.au | ASX: IRD | Page 3 |
For personal use only
Rule 5.5
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity | |
Iron Road Ltd | |
ABN | Quarter ended ("current quarter") |
51 128 698 108 | 30 June 2022 |
Consolidated statement of cash flows | Current quarter | Year to date | ||
$A'000 | (12 months) | |||
$A'000 | ||||
1. | Cash flows from operating activities | |||
1.1 | Receipts from customers | - | - | |
1.2 | Payments for | |||
(a) | exploration & evaluation | (230) | (574) | |
(b) | development | - | - | |
(c) | production | - | - | |
(d) | staff costs | (329) | (1,500) | |
(e) | administration and corporate costs | (70) | (856) | |
1.3 | Dividends received (see note 3) | - | - | |
1.4 | Interest received | - | - | |
1.5 | Interest and other costs of finance paid | - | - | |
1.6 | Income taxes paid | - | - | |
1.7 | Government grants and tax incentives | - | - | |
1.8 | Other (provide details if material) | - | - | |
1.9 | Net cash from / (used in) operating | (629) | (2,930) | |
activities | ||||
2. | Cash flows from investing activities | |||
2.1 | Payments to acquire or for: | |||
(a) | entities | - | - | |
(b) | tenements | - | - | |
(c) | property, plant and equipment | (27) | (930) | |
(d) | exploration & evaluation | (54) | (371) | |
(e) | investments | - | - | |
(f) | other non-current assets | - | - |
ASX Listing Rules Appendix 5B (17/07/20) | Page 1 |
+ See chapter 19 of the ASX Listing Rules for defined terms. |
For personal use only
Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report
Consolidated statement of cash flows | Current quarter | Year to date | ||
$A'000 | (12 months) | |||
$A'000 | ||||
2.2 | Proceeds from the disposal of: | |||
(a) | entities | - | - | |
(b) | tenements | - | - | |
(c) property, plant and equipment | - | - | ||
(d) | investments | - | - | |
(e) | other non-current assets | - | - | |
2.3 | Cash flows from loans to other entities | - | - | |
2.4 | Dividends received (see note 3) | - | - | |
2.5 | Other (provide details if material) | - | - | |
2.6 | Net cash from / (used in) investing | (81) | (1,301) | |
activities |
3. Cash flows from financing activities
3.1 Proceeds from issues of equity securities
(excluding convertible debt securities) | 100 | 797 | |
3.2 | Proceeds from issue of convertible debt | - | - |
securities | |||
3.3 | Proceeds from exercise of options | - | - |
3.4 | Transaction costs related to issues of equity | (5) | (27) |
securities or convertible debt securities | |||
3.5 | Proceeds from borrowings | - | 1,250 |
3.6 | Repayment of borrowings | (100) | (643) |
3.7 | Transaction costs related to loans and | - | - |
borrowings | |||
3.8 | Dividends paid | - | - |
3.9 | Other (provide details if material) | - | - |
3.10 | Net cash from / (used in) financing | (5) | 1,377 |
activities |
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 | Cash and cash equivalents at beginning of | 2,654 | 4,793 |
period | |||
4.2 | Net cash from / (used in) operating | (629) | (2,930) |
activities (item 1.9 above) | |||
4.3 | Net cash from / (used in) investing activities | (81) | (1,301) |
(item 2.6 above) | |||
4.4 | Net cash from / (used in) financing activities | (5) | 1,377 |
(item 3.10 above) |
ASX Listing Rules Appendix 5B (17/07/20) | Page 2 |
+ See chapter 19 of the ASX Listing Rules for defined terms. |
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Iron Road Ltd. published this content on 27 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2022 23:07:06 UTC.
