announcement upgrade, page-12

australasian growing its magnetite Australasian growing its magnetite

Michael Vaughan
Friday, 22 September 2006

AUSTRALASIAN Resources is approaching the 1 billion tonne mark for the Balmoral South magnetite deposit in the Pilbara following the latest upgrade that increased the resource estimate by 55% to 958 million tonnes.



Drilling at Australasian Resources Blamoral Southern Block magnetite deposit in the Pilbara

Australasian managing director Darren Hedley told MiningNews.net the company is now putting the foundations in place to kick-off a 12-month feasibility study on the project once a shareholder vote on the transaction to acquire the project is held in November.

Australasian has proposed a deal with Professor Clive Palmer's Mineralogy group that will see Palmer issued with 2.31 billion shares in exchange for 100% control of the project. He will become Australasian's major shareholder with a 76% stake.

The resource upgrade was based on the logging of 28 drill holes, with the results of a further three holes completed this month expected to increase the resource beyond the 1Bt mark, according to Australasian.

The 958Mt resource is graded 31.3% iron and, according to Australasian, can produce a concentrate grading 68.4% iron, 3.14% silica, 0.06% alumina and 0.027% phosphorus.

Promet Engineers has completed an engineering study review that indicated for $US2.1 billion ($A2.8 billion) Australasian can construct a 12Mtpa magnetite concentrator, 7Mtpa pellet plant and 1.45Mtpa Mindrex hot briquetted iron/direct reduced iron (HBI/DRI) plant.

The proposed operation would produce 5.2Mt of magnetite concentrate, 4.9Mt pellets and 1.45Mt of HBI briquettes on an annual basis.

Palmer has already done a deal with Chinese group CITIC Pacific for the sale of up to 6Bt of magnetite ore adjacent to the Balmoral South deposit. CITIC is proposing to construct a port at Cape Preston, which Australasian hopes to use should its own development get off the ground.

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