Iron Road’s Cape Hardy Delays and Pipeline Costs Pose Strategic Questions for 2025

Cape Hardy Milestones and Strategic Partnerships

Iron Road Ltd (ASX: IRD) reported a productive December quarter, highlighted by a $3 million non-dilutionary milestone payment from Amp Energy, following an earlier $1.5 million payment linked to Foreign Investment Review Board approval. These payments mark critical financial and regulatory milestones for the Cape Hardy Industrial Port Precinct, underpinning the project's advancement as a potential green iron industrial hub in South Australia.

Alongside Amp Energy's progress, Northern Water has continued to pay non-refundable monthly instalments and secured a three-month extension on its option to purchase Cape Hardy land. This extension reflects ongoing confidence in the site's strategic value, particularly as Northern Water undertakes extensive onshore and offshore geotechnical investigations, including trenching and diamond drilling, to inform the design of a proposed desalination plant integral to the precinct's infrastructure.

Environmental and Regulatory Progress

During the quarter, Amp Energy conducted terrestrial ecological surveys to document native species, complementing field surveying efforts. Land Services SA approved subdivision plans for the Cape Hardy land, with new certificates of title forthcoming. Amp is also pursuing regulatory approval to install up to three meteorological monitoring masts, essential for assessing wind conditions to optimize the design and scale of wind turbines for its green hydrogen project. Construction of these masts is anticipated in the latter half of 2025, pending approval.

Central Eyre Iron Project and Slurry Pipeline Study

Iron Road has made notable headway on the Central Eyre Iron Project (CEIP), commissioning WSP Australia to conduct a scoping study on a 130km slurry transport pipeline capable of moving 12 million tonnes per annum of iron concentrate from the CEIP mine near Wudinna to Cape Hardy. This approach is favored over heavy haulage alternatives for its efficiency and reduced community impact. The study confirms the technical feasibility of the slurry pipeline, leveraging proven commercial designs and the high-quality water supply from Northern Water's desalination plant, eliminating the need for additional water infrastructure.

The shift to a finer-grind, higher-grade direct-reduced iron concentrate aligns with growing market demand for DR-grade feedstock, positioning the CEIP product competitively. Detailed capital and operating cost estimates from the scoping study are expected in February 2025, providing further clarity on project economics.

Financial Position and Corporate Developments

Iron Road closed the quarter with a robust cash balance of $5.5 million and no debt, supported by net cash inflows from operating and investing activities totaling $2.6 million. Exploration and evaluation expenditures amounted to $162,000, primarily directed towards the slurry pipeline study and Cape Hardy development. The company also settled $236,000 in executive and director fees accrued over the previous nine months, reflecting prudent financial management.

Looking ahead, Iron Road aims to broaden its investor base by attracting global mining and energy sector participants and plans to appoint a preferred corporate and financial advisor in the first half of 2025. These strategic moves are designed to support the company’s ambitions to develop green iron products and industrial precinct infrastructure at Cape Hardy, aligned with South Australia's State Prosperity Project and green steel initiatives.