Legacy Iron Ore (ASX: LCY) is a Perth-based Australian exploration company, established to search for iron ore and gold deposits. The flagship project is Mt Bevan Iron Ore project located approximately 100 kilometres west of Leonora in the central Yilgarn region.
Mt Bevan is a joint venture between Legacy and Hawthorn Resources whereby Legacy will earn a 60% interest in the project by expending a minimum of $3.5 million to develop the project to a pre-feasibility status.
Legacy Iron Ore eyes "significant resource upgrade" after Stage 2 drilling at Mt Bevan
Testwork has already validated Mt Bevan as one of the highest quality magnetite deposits in Western Australia, and the ongoing exploration success highlights the potential of an economic deposit. The resource upgrade is expected in January 2012, after the Exploration Target was revised upward to 1.5 – 2.0 Bt.
Legacy Iron Ore (ASX: LCY) is eyeing an upgrade to the Inferred JORC Resource of 617 million tonnes at 32.1% iron at Mt Bevan - after the company rounded out the phase two drilling program.
NMDC has indicated a willingness to fund Legacy’s share of the joint venture expenditure as Legacy looks to aggressively expand exploration and project development programs.
Exploration so far indicates virtually no change in dip, thickness or grade along the entire 11 kilometre strike, with recent highlights including 140 metres at 34.0% iron.
The 5000 metre program targeted an extension to the known resource and a substantial upgrade, with early exploration success highlighting the likelihood that a boost to the resource will be delivered in January 2012 - which will be conducted by SRK Consulting.
Mt Bevan has already delivered some outstanding metallurgical testwork results which has provided further validation that the resource is amongst the highest quality level of any Western Australian magnetite project.
Sharon Heng, managing director, commented on the positive news and said, “The ongoing drilling and exploration success at Mt Bevan continues to indicate that this project has the potential to host an economic deposit, and is likely to result in a significant upgrade in the current resource due for release in mid to late January 2012.
"Shareholders can be assured that these exciting results achieved to date will be followed up with continued aggressive exploration and project development programs, and potential new project acquisitions all aimed at increasing the value of the company."
Mt Bevan has an exploration target for magnetite of 1.5 to 2.0 billion tonnes at 30% to 40% iron to a depth of just 300 metres.
A new phase three drilling program for 7000 metres using two rigs will commence in February 2012, and will take around two months, with the aim a boost in the resource confidence categories to Indicated from Inferred - which will act as a precursor to the Pre-Feasibility Study.
Heng added, "This ongoing aggressive exploration and the ramping up of activity at Mt Bevan will require additional funding, which will be available to Legacy should shareholders approve the $18.9 million placement to National Mineral Development Corporation Ltd (“NMDC”) at the coming EGM.
"Not only will the placement to NMDC provide immediate funding, but more importantly as NMDC have indicated, it will ensure access to additional debt financing facilities which they will make available to fund Legacy’s share of expenditure and development costs under the Joint Venture with Hawthorn once it earns its 60% interest.”
The deal is a first step in NMDC’s vision of using the company a vehicle to acquire large-scale bulk commodity projects in Australia, with the NMDC already indicating an intention to spend $500 million on overseas acquisitions.
Mt Bevan is a joint venture between Legacy and Hawthorn Resources (ASX: HAW), where Legacy is earning a 60% interest in the project by expending a minimum of $3.5 million on exploration.
