Aurium Resources (ASX: AGU) has achieved a maiden JORC Inferred Resource of 850 million tonnes (Mt) at 27.3% iron (Fe) for the Telecom Hill Deposit at its Peak Hill Iron Project Joint Venture, beating market estimates of 500Mt.
Based on the exploration target at Peak Hill, further drilling in 2011 is likely to boost the resource base above one billion tonnes. The JV partners will embark on a Scoping Study to better evaluate the economics of the resource.
Considering that the resource was defined from only 4 kilometres of a 10 kilometre strike the upside potential in the resource base appears strong. There is also hematite material at Telecom Hill which will be further evaluated in 2011.
A recently announced mapping of Mt Padbury defined two deposits of high grade haematite - goethite mineralisation. The larger of the two haematite pods has an exploration target potential of 20 to 25 million tonnes at a grade of 55–60% Fe. The smaller pod, located to the north of Mt Padbury, has an exploration target potential of 2‐3 million tonnes at 55–60%.
Telecom Hill is located in the Mid-West region of Western Australia which is growing in stature as a significant iron ore province. The delineation and estimation of this first Mineral Resource is a milestone for the Project and demonstrates its potential.
Terry Quinn, managing director, said “this is a fantastic result for Aurium’s shareholders. A JORC compliant resource establishes a significant milestone and building block for the company moving forward.
"The next rounds of drilling at Telecom Hill and Mt Padbury will expand the volume of magnetite, move the JORC classification higher and will better define the hematite at Mt Padbury.”
Aurium (30%) and joint venture partner Padbury Mining (ASX: PDY) (70%) have been undergoing a drilling program designed to assess the potential of one third of the 1.5 to 2.0 billion tonne (Bt) exploration target, grading 25% to 35% iron.
The drill results from the prospect have demonstrated magnetite mineralisation is continuous over the entire tested length of 4 kilometres of the total 10 kilometre strike length. The best intersection was 198 metres at 34.2% iron (FE).
The Mineral Resource is defined from only 4km of the known 10km strike length of the Robinson Range Formation BIF. Three BIF units are present, ranging in thickness from 50m–320m, ann are separated by thin (5m–15m) shale beds.
The largest and highest-grade BIF unit, BIF1 forms the majority of the resource tonnes. The BIF has excellent continuity at surface, and this continuity was confirmed in the subsurface by drilling (up to 250m below surface).
Initial Davis Tube Recovery (DTR) test work shows the magnetite bearing BIFs can produce high-grade concentrates.
This adds to the highly successful geological mapping near Mt Padbury which delineated a number of new iron ore targets with potentially significant platy hematite-goethite mineralisation discovered with grades up to 63.2% Fe and an exploration target potential of 20-28 million tonnes at 55-60% Fe.
The JV partners will now commence a scoping study to provide a better understanding of the economic potential of this new resource and any additional resources that may be defined from identified exploration targets.
Additional resource tonnages are expected from new drilling programs scheduled for the second quarter of calendar 2011.
The programs will be a mixture of diamond core and reverse circulation (RC) percussion drilling programs aimed at enlarging and upgrading the Telecom Hill Deposit resource.
In addition, a number of complimentary technical studies will be undertaken including geotechnical studies, metallurgical test work and environmental baseline studies.
The resource is based on a number of evaluation programs conducted during 2010 which included detailed geological mapping, aeromagnetic interpretation, two RC percussion drilling programs and down hole geophysical logging.
Potential grind size, recoveries and deleterious elements of concentrate are encouraging. Resource modelling of the geological data and laboratory XRF results has begun and resource estimation will commence when all of the Davis Tube recovery results are available.
Best preliminary Davis Tube recovery test work demonstrated mineralisation grading 30% Fe was upgraded to 67.7% Fe at a grind size of 38 micron with mass recovery of 21.5% to concentrate. Similar results were received at a 45 micron grind.
With a market capitalisation of $25.65 million, and an exploration target of 3.5-5Bt there would appear to be a disparity in terms of valuation versus its peers at Peak Hill.
Gindalbie Metals (ASX: GBG) has a market cap. of $991.3 million and has a Resource of 2.5Bt at 35.9%.