Carpentaria Exploration looks to build on Hawsons discoveries with $3.5m exploration budget

Carpentaria Exploration (ASX: CAP) has allocated a substantial budget of $3.5 million for greenfields exploration in financial year 2012 to continue aggressive exploration across eastern Australia, which excludes Hawsons Iron Project pre-development costs.

Carpentaria already has a selection of priority drilling targets identified at the Koonenberry Nickel and Temora Gold Projects, with the Yanco Glen and Apollyon tin-tungsten projects near Broken Hill to be advanced.

At Koonenberry the company has an extensive footprint of 1800 square kilometres, which comprises six new exploration licenses, with a high priority prospect including Mt Arrowsmith East.

Boosting the prospectivity at Mt Arrowsmith East is a past sulfide bearing drill intersection of 22 metres at 0.23% nickel and 0.18% copper was recorded in a deformed ultramafic intrusion, which is part of a 7 kilometre geological belt containing similar intrusions.

At the Temora Gold Project in the Lachlan Fold Belt of NSW, Carpentaria said access by the state government is expected to allow drilling at the Mother Shipton porphyry gold-copper prospect this year, where more than 30,000 gold ounce was historically mined.

Adding to the potential of Mother Shipton is shallow historical drill intersections including 4 metres at 3.95 grams per tonne (g/t) gold from 2 metres, and 6 metres at 2.35g/t gold from 38 metres are yet to be followed up.

Nick Sheard, executive chairman commented, “the company is focused on further discoveries following its successes at Hawsons and Euriowie”.

“Carpentaria is committed to exploration, and the large budget for this year confirms our determination to become a miner as quickly as possible."

The exploration budget excludes pre-development expenditure at the company’s flagship Hawsons Iron Project, but includes provision for over 3,000 metres of reverse circulation and diamond drilling to test already defined targets across five wholly owned projects in the Broken Hill and Lachlan Fold Belt regions.

PFS points to development of Hawsons JV Iron Project

Carpentaria recently completed the Pre-Feasibility Study (PFS) at the company's 60% owned Hawsons Magnetite Iron Project with results indicating potential production of 20Mtpa of high grade iron ore concentrate (69.9%) to mine gate.

The company is planning a start-up mine of 5 to 6Mtpa of iron concentrate using existing transport and port facilities with a mine life of at least 20 years after an initial ramp up.

Importantly, the project is strategically located to existing key project infrastructure and has and ready access to skilled labour.

Development capex for the project is estimated at A$2.8 billion including all mining, processing and infrastructure requirements and there is a forecast site cash operating cost at mine gate of A$35.75 per tonne of concentrate.

A positive NPV after tax of A$2.8 billion and IRR of 21.3% has been forecast.

The initial Inferred Resource of 1.4 billion tonnes underpins the PFS outcomes with further significant tonnage potential. Additional pits or a deeper single pit are expected to have a 50 year plus total mine life.

The joint venture is with the private company Bonython Metals Group.