Royalty Holder…………………..BC Iron
Revenue……………..…..………………..n.a.
Mine Life...……………………….30 years
Commodity……………………….Iron Ore
Operator………………………….Rio Tinto

#15 Koodaideri

BC Iron has taken a battering, down 96 per cent since early 2014, crushing its market cap to A$47m ($34m). But the company is sitting on a 2 per cent royalty over Rio Tinto's Koodaideri deposit in the Pilbara and at prices of $55 per tonne, the royalty could comfortably generate $5m per annum from 2022, according to UBS analyst Glyn Lawcock.

Rio continues to open new mines even as the iron ore price crumbles, benefiting from a collapse in construction costs. It began mining its Silvergrass operation in the Pilbara in early August, its 15th mine in the region, though Silvergrass is a tiddler compared to Koodaideri, where output could be as high as 35m to 70m tonnes per annum.

London-listed royalty group Anglo Pacific holds a similar royalty over BHP Billiton's undeveloped Railway deposit in the Pilbara, whilst Newfoundland-based Altius Minerals and ASX-listed Cape Lambert are both also focused on royalties outside gold.

Rio Tinto however knows the value of the Koodaideri royalty better than anyone else. It punched over 100 diamond drill holes into the deposit in 2011 and 2012 and the mine won permitting approval last year.

 

 

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