New ironore research underlines investment potential of flagship

This morning, our Wise-Owl long-term iron ore investment Iron Road (ASX:IRD) provided a recent chart from global research consultancy Wood Mackenzie comparing global iron ore projects, including IRD’s flagship Central Eyre Iron Project (CEIP) in South Australia.

As you can see from the Wood Mackenzie chart below, CEIP rates among the highest projects globally for both expected product grade, and post-tax Internal Rate of Return (IRR) (i.e. generally, the more north-east the project, the better the investment case). The size of the circle represents the nameplate capacity (ie how much it will produce), and the solid circles represent development-ready projects (ie pass the DFS stage).

The research underlines the strong investment case for IRD’s flagship, and is among the reasons we like IRD as a long-term investment in the sector.

As it can take decades to progress significant iron ore projects to development, IRD has already done the hard yards at CEIP (advancing the project since 2008 through to DFS and beyond), spent the money (approximately $180M to date), and we think is now among the next cabs off the rank to transition to production.

IRD has grown the project into Australia’s largest undeveloped magnetite deposit with a whopping 3.7 billion tonne Ore Reserve that is capable of producing 589Mt of high-grade magnetite (66.7% Fe) over the life of the mine.

With its flagship so advanced, the next milestone we want to see IRD deliver is securing a partner to greenlight development.