Baobab Resources resumes drilling at Tete iron-vanadium-titanium project

Baobab Resources (AIM: BAO) has resumed drilling at the Tete iron/vanadium/titanium project in Mozambique, focusing on the Chimbala prospect which comprises the central zone of the 8km long Massamba Group trend. Drilling aims at improving confidence in its exploration target of 400 to 700 Mt (million tonnes) estimated in 2009.

The scout drilling campaign at Chimbala commenced on 10 March 2010 and will include both diamond and reverse circulation (RC) drilling for a combined total of approximately 12,000 metres.

Rock chip sampling collected during recent mapping of the Chimbala prospect area has returned what the company said were encouraging concentrate grades, including 67.4% Fe (iron), 2.11% TiO2 (titanium), 0.67% V2O5 (vanadium) with a 25.6% mass recovery grade, 64.4% Fe, 5.04% TiO2, 0.69% V2O5 with a 47.2% mass recovery grade, and 65.6% Fe, 3.55% TiO2, 0.71% V2O5 with 42.2% mass recovery grade.

Last month, the company reported results from the last three diamond drill holes of the 2009 campaign, which returned the best results to date with an intersection of 46 metres grading 64.5% Fe to beat the previous two holes, which produced Fe grades of up to 62.9%.

The Chimbala prospect comprises the central zone of the Massamba Group trend. The current drill traverse transects the broadest section of the prospect's aeromagnetic signature, located in proximity of Chitongue Grande prospect where drilling in 2009 defined a maiden 47.7 Mt Inferred Resource over a strike length of just 500 metres.

“The Chimbala prospect covers almost half of the Massamba Group trend and its assessment is key to unlocking the potential of the Tete project. Investors may expect a consistent flow of news over the coming months as results from the drilling become available,” said Managing Director of Baobab Resources Ben James.

The Tete project, covering an area of 632 square kilometres, is located immediately north of the provincial capital of Tete and shares licence boundaries with Vale and Riversdale's mega coal projects. The project has access to low tariff hydro-electric power from existing and developing schemes on the Zambezi River, where the ports of Beira and Nacala are being refurbished, as are the rail corridors through to Tete.

The project contains two areas of magnetite-ilmenite mineralisation; the Singore area to the south and the Massamba Group trend in the north. The Massamba Group trend is composed of a series of five prospects including Chitongue Grande and Pequeno, Caangua, Chimbala and South Zone that have experienced little or no historical exploration.

Independent scoping metallurgical studies at the project and financial modelling have indicated positive project economics in the production of high quality magnetite (iron and vanadium) and ilmenite (titanium) concentrate commodities.

The International Finance Corporation has earned a 15% interest in the Tete project after entering a strategic partnership with Baobab in January 2009.

Shares in Baobab climbed 3.5% on the news.