GOLD Coast investment company Charter Pacific is poised to become an iron ore miner after it was awarded overnight a mining permit for a shovel-ready project in Mauritania.
Executive chairman Kevin Dart (pictured) has described it as a “company changer” for shareholders as Charter Pacific beat a number of international tenders to secure the mine in the West African nation.
Charter Pacific has held interests in iron ore exploration permits in Mauritania since 2010 and the latest acquisition was announced to the company by government email early this morning.
Charter Pacific has secured the 12.5 million tonne Legleitat resource, located adjacent to its current Kaoua El Khadra Permit 792 exploration tenement, for an outlay of just $US10 million over the next five years.
The previous operator has already spent $US45 million in developing the mine which has lain dormant since November last year.
Charter Pacific has secured the mine in partnership with local partner WAFA Mining and Petroleum which holds 10 per cent. The Mauritania Government retains a 20 per cent interest.
Dart says the acquisition cost will be funded from cashflows with the company targeting production to resume by the third quarter of 2015.
“We want to go hard and fast to get this project going,” Dart tells Gold Coast Business News.
He says the company is keen to further explore the mining permit area in the hope of unlocking a bigger resource.
Dart says Charter sees synergies between the Legleitat resource and the potentially more lucrative Permit 792, describing it as a bridge between the smaller and larger resource.
“One of the things that attracted us to the opportunity is that it enables us to get on with the bigger project as well,” Dart says.
Permit 792 is targeting a 4.4 billion tonne resource, but the true extent of the iron ore deposit has yet to be determined.
Charter Pacific has opened discussions with investment banks and commodities traders in the lead-up to today’s announcement, which Dart says took him by surprise this morning.
“We’re only now able to disclose what we’ve got,” he says.
Dart emphasises that Charter is not a mining company but an investment company that is seeking to unlock the potential in Mauritania, which has among the world’s highest grade iron-ore deposits and among the world’s lowest production costs.
“We’re not miners and we don’t pretend to be miners,” he says.
“Our skill-set has been in negotiating the tenement rights.”
Dart says discussions are under way with a party interested in buying the Legleitat iron ore at the mine gate, which he says would reduce transport costs further.
The Mauritania mine’s major market will be Europe, and not Asia, he says.
Charter Pacific’s win comes just months after Glencore Xstrata decided to pour $1 billion into its iron-ore interests in Mauritania.The company’s shares jumped 60 per cent on news of the Mauritania mining permit, to a high of 7.5c.
Get our daily business news
Sign up to our free email news updates.