Lincoln Minerals upgrades Gum Flat hematite resource on SA’s Eyre Peninsula

Lincoln Minerals (ASX: LML) has upgraded the inferred hematite resource for the Barns Prospect to indicated status after drilling at Gum Flat, during the period November 2009 to February 2010. It has also defined extensions to both the magnetite and hematite mineralisation previously identified.

Gum Flat Iron Ore Project is located on EL 3422, on the southern Eyre Peninsula, South Australia.

Reverse circulation (RC) drilling along the southeastern margin of the high priority Barns exploration target has outlined a shallowly west-dipping medium grade hematite-goethite (+limonite+magnetite) deposit up to 35m thick and 495m in strike length.

A total of 5,041m of RC drilling has been undertaken on the Barns Prospect to date with 1,814m of that utilized to determine the Indicated Resource.

The Barns Hematite Indicated Resource is: 0.9 Mt at 54.8% Fe (50% Fe cutoff) or 58.8% CaFe – potential DSO, 2.4 Mt at 47.7% Fe (40% Fe cutoff) or 51.6% CaFe.

Hematite mineralisation extends down to 65m to 70m below ground level whence magnetite becomes the dominant iron ore mineral. The lower section of hematite mineralisation is variably magnetic and could be amenable to upgrading by magnetic separation.

Depth to the top of mineralisation varies from 20m to 25m below ground level with a strip ratio Waste: Resource < 1.8:1. Most of this is relatively soft saprolitic clay and sandy limestone (calcarenite) that can be easily excavated.

The density and spacing of drill holes and the continuity of mineralisation between drill holes is deemed to be appropriate to classify the resource as an Indicated Resource in accordance with the JORC Code (2004).

Assay results from the RC drilling program have been processed to define an Indicated Resource for the central hematite Barns Prospect based on SG = 3.0.

RC drilling to date has only focussed on the central Barns hematite zone. This represents only 600m of a 3km long zone of potential hematite alteration and enrichment.

Not all of this zone may be enriched but the exploration target for hematite along this zone is 2.4 Mt to 13.8 Mt at an average grade of 45-60% Fe including some DSO.

The company wishes to note that the potential quantity and grade of this exploration target is conceptual in nature, since there has been insufficient drilling and it is uncertain if further exploration will result in the determination of a Mineral Resource.

Recent core drilling through the Barns Prospect magnetite resource has not yet been assayed but, based on magnetic susceptibilities, high grade magnetite mineralisation has been shown to extend to at least 325m below ground level.

This is 75m deeper than previously identified. There are also additional zones of magnetite banded iron formation (BIF) not previously drilled.

On the basis of ongoing good drilling results, LML is planning to undertake a scoping study within the second quarter of 2010. This will include a detailed hydrogeological survey and construction of water monitoring bores to ensure that any proposed mining will not affect groundwater in the region.

This will be essential for approval to mine since the iron ore deposit is located adjacent to the Uley East groundwater basin within a Prescribed Wells Area.

LML entered into a joint venture agreement with Indian iron ore miner Mineral Enterprises Limited (MEL) and MEL subsidiary Mineral Enterprises Australia Pty Ltd (MEA) in December 2007. Since that date MEA has earned a 40% participating interest in EL 3422 by spending in excess of $2.5 million on exploration expenditure.

The resumption of full ownership of the company’s flagship Gum Flat iron ore project on successful completion of this contract will enable Lincoln to maximise the potential development of the iron ore resources for the benefit of its shareholders.

It is in addition to LML retaining 100% ownership of its other major iron ore project at Wilcherry (Hercules South) on northern Eyre Peninsula earlier this year.