re: Ann: Railway Funding Agreement Signed on ... GMP Research...

re: Ann: Railway Funding Agreement Signed on ... GMP Research from yesterday

SUBJECT: Drilling confirms DSO potential at MMIP - positive
SUMMARY: This morning Equatorial Resources reported initial drill results from the Makengui prospect at its Mayoko-Moussondji (MMIP) project in ROC. The results indicated a 8-39m interval of material grading in excess of 55% iron which we believe would be suitable for DSO. There is a smaller thickness of higher grade material in the 58-60% range.
The company published a cross section which suggests that the mineralised width is of the order of 150m wide and the aeromagnetic survey suggests that the orebody is up to 20km long. if we assume that mineralization is continuous over a 10km strike length we estimate that that has the potential to support a resource of up to 50Mt, more than enough to support a fast track, low capex DSO project at the site, in our view.
In that context these results have to be taken as extremely positive.
DETAILS:
• Drilling has identified three clear zones of mineralisation: DSO with grades of 55-60% Fe over 10-20m thichknesses; Enriched Haematite (similar to AMI’s saprolite or SDL’s itabirite) with grades of 40-45% over c.40m thicknesses and Magnetite BIF with grades of 30-38% Fe over 50-80m thicknesses.
• P levels are in acceptable ranges although combined silica and alumina are in the top range of acceptable levels for the DSO component, suggesting that there may be some kind of discount on the material.
• The centre of the Makengui orebody is less than 5km from an existing railway.
• The company plans to collect samples for initial metallurgical testing of the enriched haematite material during the month. It has already submitted samples for the magnetite BIF and expects results in November.
• By the end of August the company had completed 12 holes of diamond drilling for 1,478m. The current assay results are based on 5 holes. Three rigs are currently on site at Makengui and the company is targeting a 33,000m drilling program.
• The company is targeting a maiden resource by mid-2012.