Am still working on a post on the gold exploration plans the company announced after close of trade last friday for Parker Range but thought Gondwana holders might be interested in a couple of my initial thoughts on the excellent iron-ore samples and drilling campaign announced by the company at it's Pilbara tenement near a few other big players in iron-ore. Some key operational summaries and my rough observations from which Gondwana will hopefully also be looking closely at, at the nearby Atlas DSO Abydos project...ref' Merrill Lynch Emerging Companies presentation June 2008' (links below)
On the 17 oct 07, Atlas announced an inferred Resource of 8.6m tonnes at 57.5% at the Trigg deposit, N/W of Corunna Downs. In June 08 Merrill Lynch did a report on Atlas Iron Limited which revealed...about their Abydos project... Prod' commences Q4 2009 Initial prod rate 3 mtpa capital cost rail haulage option $46.5m operating costs $35-$40/tonne operating cash flow at 3mtpa $155m pa target DSO Tonnes 90-140Mt Target mine life 10 years Reference to rock chip samples ( extract from section 6 JORC statement p 2 of 2)....Rock chip traverse sampling method involved collection a sample totalling approximately 1 to 2 kilograms of rock chips collected by hammering surface outcrop at nominal 1 metre spacing along a predetermined traverse generally across strike mineralization, several rock chip samples are collected at each nominal 1m spaced sampling spot.
refer page 9 of the above report for satellite images and,
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00859710 refer page 9 and fig 5, GDA Exploration update, media release 11 July 08 for satellite images
and page 4 of GDA's 5 June 08 media release for satellite image with 1972 drilling locations http://www.asx.com.au/asx/statistics/getAnnPdf('/asx/statistics/showAnnouncementPDF.do?idsID=',%20'00848865',%20'Announcement');return%20false;
The key difference in relation to the Gondwana deposit is that in 1972 when the first drilling occurred at Corunna, iron-ore prices and demand for iron-ore was much lower , the 1972 drilling also missed the higher Fe content zones it appears and in June 2008 today's high demand and very much higher prices make the project much more profitable than 1972. Bad luck for the explorers back then and good timing for Gondwana as well as finding much higher iron-ore content in the results from the rock chip samples.
The Atlas Trigg deposit looks to be about 500m x 250m (from page 9 image), add in the Mettans, Mullaloo, S7, S2, S1 and S6 deposits which I think, from reading the company releases, will be the subject of a resource announcement in the next month or so and Atlas should be pretty happy about approaching their target DSO tonnage at Abydos. Looking at the GDA imagery and recent high iron-ore rock chip samples results, Gondwana's Corunna Downs iron-ore deposits have a lot of similar potential from what I can work out.
Further info' in an article on Atlas which has an early stage DSO project just west (NW ?) of Gondwana's Corunna Downs Iron-ore prospect...... The article is on the Atlas website and mentions the evolution of Atlas from being a company with three staff and ......
"Once a small explorer with a few tenements, Atlas has grown from three staff to 95 in about three years. It listed on the stock exchange in 2004 and its market capitalization has increased dramatically as investors have chased a slice of the red boom......" ...."We were a $9-million company and it's a $1 -billion company now,....." "......At Abydos, the second link in Atlas' future production chain, conditions are even more humble than at Pardoo, reflecting the relative immaturity of the project. A handful of men stay in a string of portable air-conditioned bedrooms flanked by a couple of large caravans and a makeshift demountable office......." The link.......
Interestingly, Gondwana has about 3 staff and a market cap of about $10.98m at the moment ! The FMG ( Fortescue) rail line is only about 80km to the West of Gondwana's Corunna Downs, tenement E45/2585. :) With the disappointing withdrawal of the agreement by the sellers of Wallal Downs, the Corunna Downs prospect is more advanced and more likely to put some juice in the tank of Gondwana I hope. Gondwana don't look like getting even close to Atlas as far as the tenement area goes but Corunna Downs looks set to be the project we have all been hoping for. I did some rough calculations on the iron ore and CaFe content ....... The average Fe content seems to be about 57% Fe in the surrounding iron ore projects of Atlas (Abydos), BC Iron, Giralia ( supposedly similar mineralization to that of BC Iron) ( ref p 28 of the Ocean Equities report, July 2008, see link below)
Ca Fe is short for Calcined Fe and is calculated as CaFe = (Fe%x100%)/(100-LOI%) The Gondwana exploration update released after market on Friday didn't have CaFe included but mentions that the rock chip samples produced results up to 62.5% Fe at Corunna Downs with an average of 60.6%Fe across four samples collected on one ridge. Not enough to make me go out and buy a holiday home but the CaFe calculations I did reveal something not previously reported ( from what I can see)...... From Table 2 , page 6 of the results from the SGS Perth lab, GDA news 5 June 08 ,I worked out the following CaFe percentages for 8 samples....
As reported in the numerous attachments, the sale of iron ore gets a higher price with the fewer impurities it has in it. The low impurities results in a higher LOI in the calculation and therefore a higher quality/content CaFe. The Ocean Equities report page 4 and 5, item 2.0 "Differentiation of grades and impurities for hematite deposits ", is very helpful in understanding the highs and lows of iron-ore content. There is a lot that can be learnt about the quality of a potential iron-ore discovery by knowing about the geological similarities of the peers deposits and the premium sale prices that can be potentially achieved. I am no geologist but from the research, it looks like the Corunna Downs (samples) quality stacks up more than equal to the best in the west (refer to the Company - Target resource summaries and key impurity levels and estimated lump-to-fines ratio of the juniors major projects, page 5) Lump gets a higher price than fines The good thing about the GDA reports is that the substantial body of hematite also appears to have longer term magnetite potential under laying the DSO ( Direct Shipping Ore). For Gondwana,these are first pass rock chip samples and there is a lot of drilling and resource exploration yet to be done but I like the fact that Gondwana have announced their focus on this initial drilling campaign and resource identification at Corunna Downs. The major players have JORC resources, Gondwana doesn't and the market cap of about $10.98m reflects that fact but it will have one in the not to distant future......what might be the "if factor" ? DYOR of course, These are just my observations and I could be wrong but the rock chip samples are fact. My calculations of the CaFe might be wrong and I am sure someone will tell me if they are.
GDA Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Held
(20min delay)