permit to mine 3.9mt

PERMITS ISSUED TO MINE 3.9 MILLION TONNES PER ANNUM OF IRON ORE
FROM JAPONESITA, MIRADOR, PRIMAVERA AND MARIPOSA TENEMENTS
AT SANTA BARBARA
The Board of Directors are pleased to announce that a major milestone in our production
expansion strategy to reach 7.2 million tonnes per annum from the Santa Barbara mines has
been reached. The environmental permits have been issued to mine iron ore from the
tenements Japonesita, Mirador & Primavera and Mariposa areas increasing permitted
production to 3.9m tonnes per annum. In revenue terms at an FOB price of $43 per tonne,
this means the Santa Barbara mines will be capable of producing revenues of $167m per
annum.
Plant Construction and Mining Permits
The current permit allows 1.5m tonnes per annum from the 32 hectare Japonesa tenement.
The new permit for the Japonesita-Mirador-Primavera tenements which covers 127 hectares
has been approved for 1.2m tonnes per annum. A permit to mine 1.2m tonnes per annum
from the Mariposa tenement which covers more than 35 hectares was also issued. Mariposa
is located about four kilometres from the new beneficiation plant constructed in January 2007.
The permit allows us to construct three additional plants in addition to the plant located
adjacent to the Japonesa tenement. When these plants are constructed, of which the key
components are crushers, conveyors and high speed magnetic separation drums total
capacity to process iron ore will be 110,000 tonnes per plant per month. The existing plant
when fully operational which is expected to be August 2007, will have 1.3m tonnes capacity,
so an additional two plants will be constructed.
The total permitted capacity from Santa Barbara at 3.9m tonnes and Santa Fe at 1.2m tonnes
is now 5.1m tonnes which is half of our projected capacity target for 2009. The port project
Punta Alcalde will allow this iron ore to be shipped when it is completed in 2009. The Santa
Fe mine will continue to use the Caleta handymax, and Candelaria panamax ports which have
capacity of 50,000 and 78,000 tonnes respectively per vessel load.