Talga Resources’ (ASX: TLG) maiden drilling at its Masugnsbyn iron project in north Sweden has returned shallow intercepts that largely exceed the widths and grade of historic drilling.
Best intercepts include 69.3 metres at 30.2% iron from 31 metres and 45.9 metres at 44% iron from 33 metres.
The results indicate that a larger resource may be present and may allow the company to upgrade the majority of the existing resource to the Indicated category.
Both outcomes would support the company’s plans to raise funds by divesting non-core assets, of which Masugnsbyn is one of them.
A new resource estimate is currently being calculated and is expected over the coming weeks.
The nine hole diamond drilling program was carried out in late 2012 to extend and infill historic drill intercepts as well as gain fresh samples for metallurgical work and concentrate development.
This targeted previously untested updip positions in the northern 1,100 metres of strike of the Junosuando deposit, one of five historic magnetite iron deposits within the 48 square kilometre project.
Swedish iron
Talga’s iron projects are located in the Kiruna district, an active mining province with several magnetite iron mines, mills and pelletising plants in operation.
The largely hydrothermal deposits in the district grade from 25-45% iron and open cut operations although the largest are mined underground to as much as 1,300 metres depth.
The magnetite ore is usually beneficiated to form a concentrate or pelletised for export with grades reported as amongst the highest in the world, at 69-70% iron.
Mining takes place year round, aided by a workforce skilled in operating in the region, and high quality established transport infrastructure in roads and rail.
The region also has exceptional low cost power supply from hydroelectricity and nuclear sources.
Talga had around A$1.7 million in cash at the end of December 2012 and is looking to raise up to $3.1 million through a share purchase plan offering shareholders up to 16.32 million shares priced at $0.19 each.
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