The company has extended its bankable feasibility study to include an option of producing 20 million tonnes a year after it upgraded the resource late last year to 400 million tonnes. The budget for the study has been raised by another $12.4 million.

It said the project economics were expected to be significantly improved.

Executive chairman Bryan Granzien said it was a compelling opportunity to maximise the value of the project. A slurry pipeline would give the project more autonomy and potentially opened up the Braemar province for further development.

The slurry pipeline had the potential to save costs involved in transporting the ore to Port Pirie, South Australia, by rail. Instead, it would be piped to the eastern Spencer Gulf, which also provided environmental benefits as well as cost savings.

Granzien said the outer boundary of the resource had yet to be fully defined, but the economic “pit shell” was now significantly larger than the one used in the pre-feasibility study.

The pre-feasibility study had capped production at 10 million tonnes a year because of the capacity of rail.

“The scale, quality and homegeneity of the Hawsons’ ore body and the demand for high quality magnetite due to the shift to green steel enables us to consider transport to remove that capacity constraint,” Granzien said.

“As you would expect a 20 million tonne per annum option would increase the capital costs for developing the project, however, the potential benefits are so compelling (that) the option warrants a thorough evaluation.”