Murchison Metals Limited (ASX:MMX) Announce Oakajee Port And Rail Delivers A Draft Bankable Feasibility Study (BFS)

Perth, Mar 30, 2010 AEST (ABN Newswire) - Murchison Metals Limited (ASX:MMX) (PINK:MUMTF) is pleased to announce that Oakajee Port & Rail ("OPR") has completed and delivered to the Western Australian Government a draft Bankable Feasibility Study (BFS) for the mid-west Oakajee port and rail infrastructure project (the Oakajee Project).

OPR is 50% owned by each of Murchison and Mitsubishi Development Pty Ltd.

The study, compiled with assistance from Worley Parsons in its role as Project Management Study Contractor, found that the Oakajee Project is both technically and operationally feasible, paving the way for commercial feasibility to be completed later this year.

The draft BFS will allow OPR to engage more fully with the State and potential foundation customers in order to finalise the initial configuration of the supply chain in the second half of this year.

The draft BFS will also be used to advance discussions with potential financiers and to assist in determining early long lead procurement strategies.

The Oakajee Project comprises a standard gauge, heavy haul 546km rail line extending from the Jack Hills Project through to the Oakajee port site, with rail spurs for foundation customers to connect to the line.

The rail line will connect miners to a 45 million tonnes per annum (mtpa) port facility at Oakajee where two cape-sized berths will be constructed as part of the initial configuration.

OPR recently announced that the planned initial capacity at Oakajee Port has increased to 45mtpa as a result of higher than expected demand from potential customers. There is potential for further expansion beyond 45mtpa to meet additional demand from potential foundation and expansion customers.

As a result of the planned initial capacity increasing by almost 30%, OPR has revised the capital cost estimate for the full port and rail project to A$4.37 billion, including a contingency of A$403 million. The estimate is reported by OPR to have an accuracy range of +/- 15%.

The WA and Federal Governments have committed $678 million towards the cost of the project.

-------------------------------------------------------Capital Item                                 A$ million-------------------------------------------------------Above Rail (including Rolling Stock)               $422Below Rail                                       $1,805Port PUI Facility (Private User)                 $1,178Contingency                                        $343-------------------------------------------------------TOTAL OPR COSTS (Excluding Govt Contribution)    $3,748-------------------------------------------------------Port CUI (proposed finance by Govt Contirbution)   $565Contingency                                         $60-------------------------------------------------------TOTAL CUI Costs (Common User)                      $625-------------------------------------------------------TOTAL PROJECT COSTS                              $4,373-------------------------------------------------------

Capital cost estimates are in 2010 dollars and are inclusive of, amongst other things, allowances, EPCM estimates and indirect costs. Land acquisition and owner costs, which include engineering and design costs up to financial close, are outside the capital cost estimate and are subject to further review.

Operating and capital costs will be further defined over the coming months as leasing opportunities are considered and as OPR works with its foundation customers to finalise the supply chain agreements.

Murchison Executive Chairman Paul Kopejtka said the draft BFS milestone confirmed the Company's belief that the port and rail infrastructure was the key to commercialising the untapped mineral riches of the mid-west region.

"We have now confirmed the operational and technical feasibility of this hugely significant project, supported by higher than expected tonnage nominations from the miners who plan to use OPR's facilities," said Mr Kopejtka.

"OPR will play a pivotal role in allowing mid-west miners such as Sinosteel Midwest Corporation, Crosslands Resources and Gindalbie's Karara joint venture to unlock the value of their world class mineral deposits.

"We look forward to OPR, the Government and the miners completing their arrangements in the months ahead and the project moving towards first exports in early 2014."

For the complete Murchison Metals Announcement including a copy of OPR's Media Statement, please click the link below:

http://www.abnnewswire.net/media/en/docs/62530-ASX-MMX-485626.pdf

Contact

Trevor Matthews Managing Director Murchison Metals Ltd Tel: +61-8-9492-2600