Flinders not worried by ore price falls
Flinders drilling in the Pilbara.

Flinders Mines says a steep fall in the iron ore price won't harm the company's prospects in the Pilbara , as it heads towards first production.

The iron ore explorer is looking for a partner to develop its flagship $1.1 billion Pilbara Iron Ore Project, after a takeover bid by a Russian steel-maker fell through in July.

The development is against a background of iron ore spot prices having dropped to about $US87 ($A85.43) a tonne today, less than half the record levels of about $US180 ($A176.76) a tonne in the first half of calendar 2011.

Managing director Gary Sutherland said everyone in the Pilbara would like to see a bounce in the iron ore price as margins continued to be squeezed.

"I guess the difference for us is we're not in production yet and we've assumed conservative long-term iron ore prices for our project," Mr Sutherland said.

"Whilst the iron ore price is getting a beating, and it might seem counter-intuitive to a whole lot of people, we're actually finding where we're at on the project development curve is actually driving the positive interest in our project."

Shares in Australia's third biggest iron ore producer Fortescue Metals plunged by more than 9 per cent today, amid concerns about the miner's about-face on expansion plans as prices fall.

Still, Flinders is upbeat about producing from its one billion tonne resource in WA.

Mr Sutherland said the company would continue to press on with its Pilbara Iron Ore Project after holding discussions with several groups.

However, due to the sensitive and ongoing nature of these matters, Flinders was not in a position to comment on specific terms relating to the discussions.

Mr Sutherland said he was confident that the company's expenditure levels and cash balance would hold it in good stead as it continued negotiations.

Flinders shares closed down 0.1 cents, or 3.4 per cent, lower at 8.8 cents.

The West Australian

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