Rex Minerals may be able to develop its Hillside mining lease in a staged manner that will deliver the same large-scale project as originally planned but for less than half the upfront capital cost.

The Yorke Peninsula miner’s large-scale plans for construction of a mine at Hillside, near Ardrossan, were put on the backburner earlier this year after it failed to attract the necessary finance amid tough conditions in the capital and commodity markets.

But in an address to shareholders today,  chairman David Carland said an extended feasibility study had shown Rex could develop the project in a “staged, lower-cost manner”.

Providing shareholders with an update on the feasibility study, he said it had reviewed a range of “copper/gold only” start-up options that sat inside the large-scale copper, gold and iron-ore plan. The options could stand alone and then be expanded to a large-scale mine as originally proposed.

“The capital options available for a staged start-up have been confirmed to be less than half of the previously reported capital requirements for the larger-scale start-up,” Carland said.

More detailed design work and mine scheduling will be done to evaluate funding options for the staged approach, with an update to be provided in the New Year.

“The lower up-front capital cost of the staged development defined in the extended feasibility study should make project financing more achievable,” Carland said in his address.

“Ongoing discussions with potential funding sources such as offtake and strategic partnerships, EPC contractor funding and debt funding, continue to confirm that an appetite for Hillside financing exists.”

Rex formally accepted the State Government’s mining lease offer for Hillside in September, and has now received all the necessary consents and approvals to go ahead with the project.

Carland acknowledged it had been a “difficult year for Rex and our industry”, with the company undergoing a restructuring program and losing its chief executive.