increased magnetite exploration target

When I read the new announcement on Centrex's increased exploration target of between 1.1 and 2.3 billion tonnes of magnetite at Eyre Penninsula, my first impression was that they were overly optimistic. Apparently their geologists have re-examined existing data on drill holes, aeromagnetics and field maps and concluded that the initial inferred JORC magnetite resource of 250 million tonnes is very conservative.

After a second read of the report, I noted that every hole they have drilled has come up with high concentrations of magnetite and at very thick layers. All holes have between 63 and 69% Fe concentration with ore thicknesses between 30 and 80 metres. I assume that their optimism is partially based on the fact that every hole drilled so far has produced a lot of high Fe concentration magnetite.

It will take a lot of drilling to bring this conceptual target to a JORC resource. Centrex has stated they will move quickly to further explore these tenements over the 2008 calender year.

The report also made two brief mentions of hematite. One statement concluded that these magnetite tenements are also highly prospective for hematite. The other statement confirmed that Centrex will commence hematite mining at Wilgerup in late 2008 (I thought that the mine wasn't starting up until first quarter of 2009, but I won't quibble over a few months). This means that they will have to grade the roads to Proper Bay Wharf and build the big ore storage shed within 6 months or so. They'd better get cracking!