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- Discussions advancing with potential strategic and commercial offtake partners
- Finalisation of mining licence grant and rapid progression though requisite environmental approvals
- Additional ore sorting, metallurgy and geotechnical workstreams underway
- Further drilling programs planned across Kangaroo Hills and Miriam
Ore Resources (ASX: OR3) has identified a fast-track path to early cash flow from the Kangaroo Hills lithium project in WA with a positive scoping study confirming a direct shipping ore (DSO) opportunity.
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MD and CEO, Nick Rathjen, said the study results have demonstrated the robust technical viability and strong forecast economic outcomes of a capital-lite, rapid-deployment operation at Kangaroo Hills, involving the open pit mining, crushing, trucking and export of lithium-bearing pegmatite ore under a DSO arrangement.
He told shareholders, it delivers a compelling assessment of Kangaroo Hills’ development potential and establishes a strong platform for rapid execution. Kangaroo Hills is a key component of the broader Coolgardie lithium Projects located in the Eastern Goldfields.
“The study demonstrates that a contractor-led DSO development pathway at Kangaroo Hills offers a low-cost, rapid pathway to substantial free cashflow generation, underpinned by robust technical and operating outcomes,” Mr Rathjen said.
“By leveraging contract mining, crushing and logistics services, the proposed development minimises upfront capital requirements, shortens implementation timelines and delivers attractive project economics.
“Importantly, the speed to market offered by the DSO approach aligns strongly with current lithium market conditions. This operating model generates a strong projected operating margin at modest pricing assumptions and delivers a quick payback, highlighting the potential for rapid cash generation and value creation.”
The release of the study coincides with the declaration of an initial mineral resource (MR) for Kangaroo Hills, comprising 3.10 million tonnes (Mt) at 1.01% lithium oxide (Li2O) for 31,200 tonnes contained Li2O.
Mr Rathjen said the initial mineral resource is a key milestone representing the culmination of more than 38,000m of RC, air core and diamond drilling completed since the discovery of lithium mineralisation in 2022.
In addition to lithium, the mineral resource contains an average grade of 118 parts per million (ppm) tantalum pentoxide (Ta2O5), comparing strongly with several regional lithium operations that produce tantalum concentrates as a by-product.
“This multi-commodity potential reflects an additional potential revenue stream which we intend to evaluate and unlock.
“We also remain highly encouraged by the broader exploration potential across our Coolgardie lithium projects.”
A final investment decision, prompt project commencement and first DSO production are targeted for mid-2027.
OR3 was steady at 9.0¢ with a Mkt cap of $74.47M prior to markets opening.
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