Vancouver — Soon-to-be iron ore producer
Mining is scheduled to begin this month at its Comstock-Mountain Lion iron project in southwestern Utah. Palladon is concluding arrangements with its contract miner, Gilbert Engineering, as well as with railroad and port facilities.
The deposit will be mined by open-pit methods, crushed and magnetically treated, producing shipping-quality ore to hauled by rail to a port in California. Initial production is expected to come from higher-grade zones in the pit.
On the back of strong world iron prices, Palladon expects to generate significant cash flow from the contract. Terms of the agreement were not disclosed.
Palladon acquired the project earlier this year for US$10 million from an affiliate of the now-bankrupt Geneva Steel, which previously operated the mine.
The Comstock-Mountain Lion open-pit operation produced roughly 80 million tonnes of iron ore over several decades. Operations ceased in 1995 owing to weakening demand and steel prices.
The remaining ore reserves following the closure of the mine, as estimated by Geneva Steel, are 25 million tonnes grading 47.1% iron. Several low-grade stockpiles also remain and are estimated to contain about 12.5 million tonnes averaging 42% iron. The Rex deposit, which could be mined by open-pit methods, contains a measured iron resource of 89 million tonnes averaging 39% iron. The reserve and resource figures all predate National Instrument 43-101.
Shares of Palladon were trading around 90 in a 52-week range of $1.27-30.
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