Eastern Iron's (ASX:EFE) drilling at Nowa Nowa iron project in Victoria has paid off with a lift in the confidence level of the existing resource with the addition of 2.1 million tonnes of Measured resource.
Five Mile prospect is the largest of the magnetic targets at Nowa Nowa.
Total Resource for the Five Mile project is estimated at 9.6 million tonnes at 50% iron at a lower cutoff grade of 40% total Fe.
Current JORC resource at Nowa Nowa is 11.5 million tonnes at 49% iron (magnetite/hematite).
The results will feed into an increased confidence level in the resource model to assist in mine planning and production scheduling studies that form part of the ongoing Feasibility Study into the development of the Five Mile deposit.
A DFS is scheduled for completion in 2013.
The concept
Eastern Iron is carrying out a feasibility study into the potential mining of magnetite-rich iron ore at the Five Mile deposit located some 10 kilometres north of the village of Nowa Nowa and 50 kilometres east of Bairnsdale in East Gippsland, Victoria.
Conceptually, the iron ore would be mined at Five Mile and processed into saleable product at site and trucked to an export port at Two Fold Bay south of Eden in southern NSW.
A scoping study shows that the project would have relatively low capex (around $30 million) as Eastern Victoria has strong project infrastructure, roads, power and port.
Operating Cost (OPEX) is also reasonable at: Total FOB $70/tonne including $35/tonne transport and port costs.
Elevated copper levels
Interestingly, during drilling of the magnetite resource at Five Mile it was found that portions of the mineralised body are relatively rich in copper sulphides.
Elevated copper zones within the orebody can be an indicator of potential for a copper by-product, hence improving project economics.
The average of these copper-rich intersections is 18.8 metres at 0.37% copper with the best being 44 metres at 0.46% Cu in hole NRC027.
Results of metallurgical testwork associated with producing a magnetite-rich iron product show that during magnetic separation copper sulphides report to the non-magnetic fraction along with hematite.
Further work is being undertaken to determine if a saleable copper concentrate could be produced during recovery of the hematite to further improve the potential cash flow from the project.
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