Chris CannThursday, 22 March 2007AN INDEPENDENT review of Indo...

Chris Cann
Thursday, 22 March 2007

AN INDEPENDENT review of Indo Mines' 605 million tonne Yogyakarta iron sands resource in Indonesia has returned low-grade variability, which will make project mining and processing cheaper and more efficient.

The news prompted a considerable improvement in the Indo share price this morning, up 5.5c or 6.3% to 93.5c.

Managing director Phil Welten told PNGIndustryNews.net the result was very welcome news for Indo.

"The low variability in mineral grade is expected to simplify both mining and concentrating options, leading to reduced capital and operational costs and provides an important foundation for the scoping study being completed," he said.

"We were concerned we would have to blend ore from different parts of the resource and that the operation would have different processing streams, but what this means is that we will have a single mining and processing operation – the cost savings could be considerable.

"The completion of this analysis provides further support for the prospectivity of the project as the company moves to the completion of metallurgical test work and the finalisation of the scoping study."

The average grade of the Yogyakarta was recorded as 10.8% iron.

The independent review is part of an ongoing scoping study that aims to prepare the project for full-scale feasibility work, which is due to start by May and costs less than $10 million. Indo hopes to have the feasibility complete by early next year.

Initial mining will focus on the Sand Surface Unit, which hosts 273Mt of iron sands grading 14.2% iron – the equivalent of 39Mt of iron.

That resource is expected to support production of 500,000t pig iron annually for at least 20 years.

http://www.miningnews.net/storyview.asp?storyid=96131§ionsource=s0