Savage River

Project History

Magnetite mineralization was discovered at Savage River in 1887 by State Government surveyor C.P. Sprent. For many years, interest in the deposit centered on the copper and gold potential of the area.

Adits were developed in the hillsides but no significant base or precious metal mineralisation was identified.

Exploration of the prospect was carried out by the Australian Bureau of Mineral Resources in 1956, including ground and air magnetometer surveys. Diamond drilling was undertaken in 1957 and 1959. In 1965 Savage River Mines Limited, a joint ventures of Australian, Japanese and American interests, was formed to develop the project.

The Savage River Project was operated for the full term of a 30-year lease by Pickands Mather & Co. International (PMI), an affiliate of Cleveland-Cliffs Inc., on behalf of the joint venture. To access the magnetite reserves PMI developed an open cut mine, concentrator plant and township at Savage River. A pipeline was constructed from the concentrator to a pelletising plant and dedicated port facilities at Port Latta. Production commenced in 1966 supplying the Japanese steel mills 45 million tones or pelletised iron ore over a 20 year period. Annual pellet production reached as high as 2.4 million tpa during the period.

During the late 1980s, PMI approached its joint venture partners and proposed that it acquire their interests in the Savage River Project. This proposal was accepted and, shortly thereafter, Savage River in early 1997 and ownership of the Savage River Project was transferred to the Tasmanian Government on 26 March 1997.

In March 1997, ABM purchased the assets of the Savage River Project from the Tasmanian Government.

In June 2000, Ivanhoe Mines Limited ("Ivanhoe") signed a Head Agreement with ABM and acquired all of the shares in the entity that owned the ABM assets in December 2000.

In February 2005, Ivanhoe subsequently disposed of its interests in the Savage River Project to Stemcor Holdings.

The original mine plan developed at the time ABM took over the Savage River operation contemplated completion of mining operations in 2009. During 2006 a feasibility study was completed on a possible extension of the mine beyond 2009. It concluded that it would be possible to extend the life of the Savage River mine until 2023. Potential equity investors were sought to fund the Mine Life Extension Project.

On 16 August 2007, Stemcor completed a transaction in which it sold a 90% interest in ABM to a group of Chinese shareholders. The corporate entity known as SMAPL was formed to give effect to this transaction.

On 2 January 2009 Grange Resources Limited acquired the 90% interest in SMAPL held by the Chinese investors and the remaining 10% interest in ABM held by Stemcor.