Arctic resource play, Oceanic Iron Ore (
TSX:V.FEO,
Stock Forum), enjoyed a positive shift today as shares in the company rose 13% to $0.17 just days after the company released results of a
shipping optimization study that indicated they would be able to ship product through arctic waters year-round, at a reasonable rate.
Oceanic hasn’t been a significantly active trader for the past month, but buys Monday totalling 505,000 shares gave the company a significant nudge into the green, much to the enjoyment of investors who have been waiting for ongoing positive news around the company’s
Hopes Advance Bay project to pay off with an upward spike.
The company, which is a Stockhouse Publishing client, needed good news on the shipping report, being as its business concept is built around being an efficient shipper, and the news was good.
“This Study concludes with greater certainty that the Company's shipping strategy, which will include direct shipments during ice free months from Breakwater Point and transshipment during winter months, is technically feasible and supports the cost projections contained in the Company's Preliminary Marine Facility and Shipping Logistics Study announced September 22, 2011,” said a statement from the company.
“We require no rail and can load product directly on to a ship resulting in lowest quartile projected operating costs of any of our peers globally,” Oceanic Iron Ore President and COO,
Alan Gorman, told Stockhouse in May.
“In a little over 2 years, we have signed an LOI with the local Inuit community, established an initial 43-101 compliant Resource, delivered a Preliminary Economic Assessment, increased our resources TO 1.58BN tonnes M&I plus 0.269BN tonnes inferred and most recently published a Pre-Feasibility study for Hopes Advance Bay outlining an NPV of $5.6BN,” CEO and director
Steven Dean told us in February. “Proven and probable reserves for Hopes Advance are approximately 1.36 BN tonnes Fe and extensive metallurgical test work, including completion of an extensive bench scale and pilot plant program confirm the quality and process flow sheet of the ore.“
The report claimed, considering current market pricing for Capesize vessels and fuel costs, insurance, port charges and commissions, the research projects estimated average annual shipping costs of approximately $31 per tonne of product from Nuuk, $33 per tonne from Rotterdam and $32 per tonne from St. Pierre and Miquelon on the destination being the port of Qingdao, China via the Cape of Good Hope.
In the event that some future product is sold into Europe the average annual shipping costs would decrease.