Fe Limited’s (ASX:FEL) cash balance has been boosted by the September quarter iron ore royalty payment of $645,775 from mining by Mineral Resources Ltd (ASX:MIN) at the Deception Iron Ore Mine in WA.
The Q3 payment is 2.5 times larger than the June quarter payment with further and increased quarterly royalty payments expected as mining at Deception ramps up.
This payment will assist FEL ramp-up exploration at the Hillside earn-in project in WA’s Pilbara region where recent sampling produced copper results of up to 18.8% as well as a surprising manganese oxide result of 59.4%.
Provides “flexibility”
FEL's non-executive chairman Tony Sage said: “The significant increase to our royalty payment for the September quarter allows the company the flexibility to expand our drilling activities at the prospective Hillside project.”
The company holds a 1.5% Dry Metric Tonne, FOB Royalty in respect to M77/1259 that is around 20 kilometres north of the Windarling mine.
This Evanston Iron Ore Royalty area is in WA’s Southern Yilgarn Iron Province and forms part of MIN’s Koolyanobbing project.
For the March quarter of 2019 FEL received a royalty payment of $211,729 from the Deception operations and this increased to $241,498 for the June quarter.
These payments have supplemented more than $750,000 raised by FEL earlier in the year, enabling the company to increase activity at the Hillside project.
Earn-in with Macarthur
The company has entered into an earn-in agreement with Macarthur Minerals Limited (CVE:MMS) in respect of 18 tenements in the Pilbara ranging from south of Nullagine to north of Pilgangoora, including Hillside.
Outcrop sampling of Hillside Gossan over a 14-kilometre strike returned the impressive copper results, which were supplemented by high-grade gold, silver and zinc values along with some cobalt.
The manganese oxide result, which is equivalent to greater than 46% manganese, was returned from a new sub-parallel outcrop to the gossan line at which FEL will prioritise further exploration.
“Very exciting” results
At the time Sage said: “Results to date are very exciting for the company, highlighted by the emergence of manganese as well as the huge copper grades over a 14-kilometre strike.”
Fifteen of the samples gathered were from outcropping gossan both with and without visible copper minerals with eight returning copper values over 1% with a peak of 18.8%.
This sample also returned 1.2ppm gold, 77ppm silver, 0.17% zinc and 0.057% cobalt.
A sample from outcrop of a newly discovered oxide horizon returned the surprising manganese result which is in excess of the 31.4% grade of Consolidated Minerals’ nearby Woodie Woodie mine.
FEL has planned a drilling program targeting depth extensions of the gossanous mineralisation with initial shallow angled holes to intercept the interpreted dip as guided by the local structural setting.
Some deeper holes are expected to be drilled depending on what is discovered in the field and the program is anticipated to begin shortly, pending receipt of necessary approvals.