Shares in Sydney-based exploration company Australian Bauxite (ASX: ABZ) jumped almost 38% after the company announced the latest details on its 17 bauxite exploration tenements in eastern Australia covering over 5,000 sq kms.
The company was trading 11c, or 37.9%, higher to 40c just after midday.
In a statement, the company said a small area of one tenement, EL 6977 at Inverell in northern New South Wales, has been drill tested by 118 holes totalling 1,773 metres. The drilling has only evaluated 15% to 30% of bauxite Deposit A-B which has been mapped for 4.6 kilometres to date and is open to the north and west.
Deposit A-B is only one of 4 major bauxite areas identified to date on EL 6977, with the initial resource area represents less than 10% of the known major bauxite areas identified. Around 40% to 50% of the tenement is yet to be explored.
The company has also recently identified additional major bauxite areas within another of its tenements - EL 7268 at Pindaroi, located 10 kilometres northeast of EL 6977.
The maiden Resource contains 22 million tonnes of gibbsite-rich bauxite on first target area on EL 6997, with the figure based on drilling of less than 10% of known bauxite areas on EL 6997.
The Gibbsitic bauxite upgrades to premium grades at high yields with simple screening, with large proportion of the resource Direct-Shipping Grade, which is bauxite that is of sufficiently good quality that it can be mined and sold in its raw form after simple crushing and sizing.
Approximately 75% of the deposit tested to date meets DSO grades.
Several additional deposits also identified, some covering areas larger than deposit A-B and many times larger than the maiden resource area
The initial resource target for Inverell is between 200 and 300 million tonnes
The potential for very large regional bauxite resources in these two tenements has been increased by these recent developments in EL 6977 and EL 7268.
Drilling in the initial resource area encountered a remarkably uniform bauxite layer typically 3.5 to 9 metres thick with less than 1 metre of overburden. Most of this very thick deposit lies at surface with no overburden.
Australian Bauxite Chief Executive Ian Levy said the discovery of very thick, high quality bauxite was a good start for a rapidly growing small company that aspires to prove-up large bauxite resources over the next 2 years.
"Drilling during 2010 is expected to expand the drill tested area of deposit A-B substantially and will commence testing the other 3 major deposits already indentified at Inverell," Mr Levy said.
"We should also make headway in evaluating nearby Pindaroi which has indications of extensive bauxite zones.
"We hope to upgrade resource estimations in the Inverell-Pindaroi areas during the year."
The ABx project tenements consist of seventeen exploration tenements granted or under application covering over 5,000 sq kms of ground considered prospective for bauxite; 3,477 sq kms in NSW and 1,617 sq kms in Queensland.
The bauxite deposits are located close to existing transport and other infrastructure, close to coal mines, industrial centres and ports on the east coast of Australia.