Alien Metals Ltd on Wednesday said that its wholly-owned subsidiary, Iron Ore Co of Australia Pty Ltd, has chosen a contractor for the Hancock iron ore project in Western Australia.

Iron Ore Co has picked Regroup Australia, a civil construction, mining operator and haulier, as its preferred primary contractor for Hancock.

Under the terms of the agreement, Regroup will oversee the construction of an intersection of the project area at the Great Northern Highway, as well as the construction of an access track from the highway to the mine site.

It has also been chosen as Iron Ore Co’s preferred operations contractor, and will be responsible for mining and haulage services - namely hauling ore from the mine site to Port Hedland.

According to Alien Metals, choosing Regroup significantly derisks the project, and removes inherent interface and delay risk across the mine construction and operational activities.

Further, the firm said that the pricing submitted by Regroup’s bid supports potential for capital savings when compared to those forecasted in the scoping study.

The award of this contract remains subject to the completion of a positive definitive feasibility study, approvals, funding and the board making a final investment decision.

‘Securing Regroup as a key contractor for the Hancock project is a significant milestone for the company as it further de-risks the Hancock project. This is the first step in locking in relationships with contractors on the back of the IOCA sourcing process, securing competitive pricing from contractors, which moves planning for the project forward,’ said Alien Metals Chief Executive Officer Troy Whittaker.

Alien Metals shares were trading 2.1% higher at 0.19 pence each in London on Wednesday morning.

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