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Flinders Mines Limited
ABN 46 091 118 044
www.flindersmines.com
62 Beulah Road
Norwood
South Australia 5067
PO Box 3126
Norwood
South Australia 5067
telephone +61 8 8132 7950
facsimile +61 8 8132 7999
email [email protected]
Encouraging Assays Returned
from Exploration Holes on
E47/882
FMS has received encouraging assays
from RC drilling on the company’s
Hamersley E47/882 licence, in the
Pilbara region of Western Australia
(Figure 2). The results are shown in
Table 1 and indicate good widths of
channel iron deposit (CID) mineralisation
in Area E and continuity of Fortescue
Metals Group’s (FMG) Serenity deposit
into E47/882. All drill holes are vertical
and represent true widths.
HAMERSLEY TENEMENT E47/882 Figure 1 (FMS earning 100%)
• Encouraging assays returned from exploration drill holes in Area E
• New drill rig onsite performing well
• Site camp commissioned
HAMERSLEY TENEMENT E47/1560 Figure 1 (FMS earning 100%)
• Flinders Mines Limited (ASX: FMS) has received an independent review of the iron ore potential on its
Hamersley tenement E47/1560 (100% owned), recently purchased from Cazaly Resources.
• An exploration target of between
120 and 175 million tonnes of
iron ore averaging 45 to 60%
iron is outlined on E47/1560
• The combined exploration
target on tenements E47/882
& E47/1560 is estimated to be
between 453 and 555 million
tonnes of iron ore averaging 45
to 60% iron
HIGHLIGHTS
ASX Announcement • 25 August 2008
ENCOURAGING ASSAYS ON FIRST CID INTERSECTIONS
NEW TARGET ON E47/1560 INCREASES COMBINED
IRON ORE EXPLORATION TARGET TO 453 - 555 M
TONNES IN HAMERSLEY PROJECT, WA
FMG Prospect Areas
FMS = Flinders Mines Limited FMG = Fortescue Metals Group Limited RIO = Rio Tinto Limited
-22º00' -22º00' 117º
30'
117º
30' 117º
30' 111111111111111111888888888ºº
220 Mt Inferred Iron Ore Resource on
220 Mt Inferred Iron Ore Resource on E47/1306 (included in 1014 Mt Resource) (FMG)
E47/1306 (included in 1014 Mt Resource) (FMG) 875 Mt Inferred Iron Ore Resource (RIO) 875 Mt Inferred Iron Ore Resource (RIO) Caliwingina North
Prospect
E47/1560
E47/882
Serenity
Prospect
325-390 Mt Iron Ore Exploration Target on E47/882 (FMS) 325-390 Mt Iron Ore Exploration Target on E47/882 (FMS) 702 Mt Inferred Iron Ore Resource (FMG)
702 Mt Inferred Iron Ore Resource (FMG) Solomon East
Prospect
1014 Mt Inferred Iron Ore Resource (FMG)
1014 Mt Inferred Iron Ore Resource (FMG) FMS Tenements - iron ore & diamonds 100% FMS-Prenti
FMS Tenements - FMG 100% iron ore, FMS iron ore royalty, FMS 100% diamonds
FMG Tenements - FMG 100% iron ore, FMS 100% diamonds, no royalties
RIO Tenements
0 10 km
RIO Calinwingina North Resource
FMG Proposed "Kennedy Railway Spur"
RIO existing Tom Price to Dampier Railway
Figure 1 Location of E47/882 and E47/1560 in relation to iron ore deposits and infrastructure
in the Hamersley Project Area.
Hamersley
WESTERN
AUSTRALIA
2 • FLINDERS MINES LTD • ASX Announcement
Figure 2 Southeastern part of E47/882 showing location of drill holes HRC2-4, 8 and 10-12.
The grades of iron and concentrations
of deleterious factors (aluminium, silica,
phosphorus and loss on ignition) are
comparable with those in the Serenity
deposit. All of these intersections are
on the eastern most drill line adjacent
to the Serenity deposit. The thickness
of CID intersected is greater than
the average estimated for the entire
exploration target, as previously defined
by Dr Richard Russell.
The spacing between these drill holes
is 400m, with the three holes spanning
a total distance across the channel of
800m. Drill hole HRC4 is located to
the north of the interpreted extension
of the Serenity deposit into E47/882
and may indicate that the channel to
the northwest of HRC4 contains good
thicknesses of CID mineralisation.
Further exploration drilling continues
to intersect CID mineralisation. Four
additional drill holes have been
completed with all holes intersecting
CID except for a single drill hole. The
geology in these holes is consistent
with the interpretation by Dr Russell.
The CID intersections are up to a
further 1 kilometre to the west of the
intersections shown in Table 1. It is
noted that insufficient new information
is yet available to make meaningful
comparisons to previous target estimates.
FMS’s intention, once a regular flow of
assays is available, is to release a weekly
drilling update.
Additional Drill Rigs
The first of two new drill rigs has
commenced drilling onsite and has seen
an improvement in the rate and quality
of drilling (Figure 3). The drilling crew
quickly adapted to the difficult drilling
conditions and is increasing the rate of
drilling. The arrival of a second drill rig is
expected on 26 August.
Once both drill rigs are settled into
routine drilling the schedule will be
reviewed to determine if these rigs
will be capable of bringing the drilling
program back on track. The drilling will
initially focus on Areas C, D and E; the
largest exploration targets. A third drill
rig is available to be contracted if the
rate of drilling needs to be increased.
Consequently FMS still anticipates
returning JORC compliant inferred
resources for all five target areas prior to
the end of the 2008 calendar year.
The FMS owned geophysical down
hole logging truck is now on site and
operational (Figure 4). This will be
used to determine in situ physical
properties, such as density and
porosity, in all drill holes that can be
accessed. The collection of down hole
physical properties is important for
developing reliable resource estimates.
Table 1: Assays for exploration drill holes on E47/882 (Area E), including a weighted
average for the main unit, and a comparison to the grades from the Serenity
Deposit (as announced on 15/11/2007 by FMG).
Hole From To Interval Fe SiO2 Al2O3 P LOI
HRC2 56 66 10 56.7 3.5 5.7 0.120 9.0
HRC3 42 46 4 50.1 4.7 21.0 0.040 1.7
56 68 12 53.6 4.2 7.7 0.090 10.8
HRC4 58 68 10 55.2 4.1 7.4 0.070 8.9
76 84 8 50.0 4.8 12.5 0.100 10.7
Weighted average of CID
from similar depth
10.7 55.1 3.9 7.0 0.097 9.6
Grades of the Serenity deposit (FMG) 56.0 7.3 3.8 0.081 8.1
NB: These intersections are based on an Fe cut-off grade of 50% and a maximum internal dilution of 2m.
Analysis via XRF fusion at SGS Laboratories.
LOI – Loss on ignition
-22º10'
117º28'
117º26'
117º30'
HRC4 (10m @ 55% Fe from 58m)
HRC3 (12m @ 54% Fe from 56m)
HRC2 (10m @ 57% Fe from 56m)
E47/882
HRC8
HRC11
HRC12
Area E
HRC10
Exploration Camp
0 1 km
RC Drillhole completed (assayed)
RC Drillhole completed (awaiting assays)
Proposed RC Drill traverse
Exploration Licence
Track
3 • FLINDERS MINES LTD • ASX Announcement
Figure 3 Silver City Drilling carrying out RC drilling on hole HRC12.
Few geophysical logging trucks are
available to carry out such work due to
the amount of iron ore exploration work
currently being carried out in Western
Australia. FMS commissioned the
building of this logging truck to ensure
that physical properties are collected on
all FMS iron ore exploration targets.
Drill Site Preparation and
Archaeological Clearances
Drill site preparation is well ahead of the
drilling. Both Areas D and E have been
prepared for completion of drilling to an
inferred resource status. Areas B and C
have been marked out in preparation for
archaeological clearance, and Area A is
currently progressing.
Further archaeological clearances are
planned for mid September to allow
for the completion of all proposed
drilling in 2008, on E47/882. Preferred
earth moving contractors have now
been established and are scheduled
to complete all earthworks following
archaeological clearance.
Figure 4 FMS-owned geophysical logging truck preparing to log drill hole HRC12.
4 • FLINDERS MINES LTD • ASX Announcement
Site Camp Commissioned
Campsite construction at the Hamersley
Project has been completed (Figure 5).
Onsite catering has commenced and
FMS staff and subcontractors have
successfully settled into site. A water
bore was completed in early August
and is supplying water to the camp
and being used for drilling purposes in
Area E.
Iron Ore Exploration Target on
E47/1560
In June 2008 FMS completed an
agreement with Cazaly Iron Pty Ltd
to purchase E47/1560 for a total
consideration of $750,000 in cash and
$750,000 worth of Flinders shares.
The tenement is located 15 kilometres
southwest of Flinders’ 100% owned
Figure 6 Location of potential CID areas within E47/1560 as tabulated on Table 2.
Figure 5 Aerial view of FMS’s Hamersley Project camp.
117º20'
-22º12'
117º24'
E47/1560
Area A
Area D
Area E
Area B Area C
Area F
Area G
Exploration licence
Potential Channel Iron Deposit (CID)
0 2 km
E47/882 in the Hamersley Ranges,
WA (Figure 1). The tenement totals 44
sq km of ranges and valleys with high
potential for channel iron mineralisation.
FMS commissioned an initial study
by independent iron ore consulting
geologist/geomorphologist Dr Richard
Russell on the iron ore exploration
potential of E47/1560.
Dr Russell has carried out fieldwork
for FMS on the Hamersley over the
last 3 years and is familiar with the
geology and geomorphology of the
area. Specifically he has carried out
assessments of the exploration target
potential of E47/882, detailed in earlier
announcements. Dr Russell’s work
utilised aerial photography and his local
geological knowledge to determine
the possible location of channel iron
deposits (CID) and detrital iron deposits
(DID).
The results of this work are shown
on Figure 6. Dr Russell has divided
the tenement into seven main areas
of potential mineralisation (A to G on
Figure 6), then from the surface area
5 • FLINDERS MINES LTD • ASX Announcement
Table 2: Exploration target estimate on E47/1560.
Area
in
E47/1560
Area of CID Estimated Average
Thickness Volume Possible Tonnage
Km2
Metres Million Cubic Metres Million Tonnes
Minimum Maximum Minimum Maximum Minimum SG 2.6 Maximum SG 3.0
A 1.313 2 2.5 2.6 3.3 6.8 9.9
B 0.656 3 3.5 2.0 2.3 5.1 6.9
C 0.719 2 2.5 1.4 1.8 3.7 5.4
D 1.594 3 3.5 4.8 5.6 12.4 16.7
E 1.031 2 2.5 2.1 2.6 5.4 7.7
F 3.094 4 5 12.4 15.5 32.2 46.4
G 4.188 5 6.5 20.9 27.2 54.4 81.7
TOTAL POSSIBLE TONNAGE CID 120.1 174.7
DID 0.228 1.5 2 0.34 0.46 0.9 1.4
and probable average thickness has
estimated a total tonnage of CID of
between 120 and 175 million tonnes.
The estimate based on each area
is presented in Table 2. Dr Russell
estimates that DID mineralisation in this
tenement is less than 1% of the total
possible iron mineralisation - a much
lower proportion than in E47/882.
The grade of the CID exploration target
is estimated to be between 45 and
60% iron. The range of values for the
tonnages is calculated on varying the
probable average thickness and specific
gravity, which in turn has been derived
from knowledge gained from exploration
on E47/882.
The combined exploration target
in E47/1560 and E47/882 is now
estimated to be between 453 and 555
million tonnes with an estimated grade
of 45 to 60% iron.
It is emphasised that, although based
on the best available local experience,
this exploration target in E47/882 and
E47/1560 is conceptual in nature and
there has been insufficient exploration
carried out to estimate a Mineral
Resource. It is also therefore uncertain
whether further exploration will result
in a larger, smaller or any Mineral
Resource.
Planning for drilling on E47/1560 will
commence once a thorough assessment
of Dr Russell’s report is complete. A
program of works will be submitted
as soon as possible to the Western
Australian Department of Industry and
Resources to provide sufficient time
to carry out Native Title clearance and
the earthworks. Providing all approvals
are obtained in a timely manner, some
reconnaissance drilling may commence
on E47/1560 prior to the end of 2008.
Dr Kevin Wills
Managing Director
25 August 2008