borker action, page-3

re: iron ore a pipe dream The nine mining properties are located in the region close to Vallenar, northern
Chile. The NNE striking iron ore deposits are of the contact metamorphic type
and are alluvial and vein type hard rock of the Mesozoic age. There are more
than 40 known deposits of this type in Northern Chile that are between 500,000
and 100 million tonnes of high grade (>60% Fe) ore. The two most famous
deposits are El Algarrobo, some 15kms to the south of our mines where 250
million tonnes of ore has been extracted from two open pits, and Los Colorados
(previously owned by Santa Barbara) about 50 Kms north of our mines where
Mitsubishi haveproved over 200 million tonnes of final product).
Compania Minera del Pacifica, northern Chile’s largest iron and steel ore
producer, has assessed 211 samples and 22 drill holes of which 4 holes are in
two large tailings dumps at an average depth of 22 metres. The samples
included vein conglomerate material as well as alluvial. These samples were
analysed and Fe content ranged from 60.27% to 67.05%, phosphorous 0.07% to
0.18%, silicon 2.82% to 4.03%, Sulphur 0.012, Aluminium 0.38, Vanadium 0.16,
Calcium 0.88, titanium 0.20, and potassium 0.02, using the Davis tube assay
approach. The area has also been subject to airborne digital 3D and hand held
magnetic surveys. Both studies confirm the presence of significant anomalies
indicating iron ore on the nine properties.
The two tailings dumps, of which the first is 1 875,000 M3, with iron 16,75%,
density 2,5 with iron ore tonnage 2,189,250 M3 and the second stockpile
315,500 M3, iron 8,04%, density 2,6 with iron ore of 820,931 tonnes) were
magnetically separated for lump ore (>6.3mm size) in the 1970’s. The fines that
were left (and command a price premium today) are ready to be processed
immediately as soon as a plant can be installed. The average grade is 16% iron
ore, implying every seven tonnes of material processed will produce one tonne of
ore. Three mining operations are planned to commence in the next three
months,subject to commissioning of plant and equipment. Alluvial deposits will
be initially mined at surface level. Some surface high Fe hard rock deposits will
also be mined.