resource stocks article

The following is the full article from Resourcestocks - Aug 2008 publication. My apologies as there may be some errors from converting the scanned images to text.

RAILWAY HOPES HIGH FOR IRON ORE EXPLORER

Perth-based exploration company United Minerals Exploration is highly confident that its 100%-owned Pilbara iron ore project has the potential to give it a very rosy future indeed.

The company has three tenements covering 263.8 square kilometres in the middle of one of the world's greatest iron ore provinces, surrounded by two of the biggest players in the iron ore industry — BHP Billiton and Rio Tinto.

But in order to fully understand the significance of these tenements and just how they could contribute to the future for United Minerals, it is necessary to take a quick look at their history.

The ground area of the company's tenements is underlined by Brockman and Marra Mamba type formations, which host two of the major ore types, namely Brockman and Marra Mamba supergene enriched iron ore, that are shipped from the Pilbara.

United Minerals originally acquired the tenements in October 2006 from DFD Rhodes, a company that is synonymous with the Western Australian iron ore mining industry.

The three tenements, E47/1431, E47/1429 and E47/1432, were all originally part of the Goldsworthy Mining Temporary Reserve TR70/3156, which dates back to 1964.

A substantial portion of this temporary reserve was in turn retained by the BHP group as its Area C mining lease, part of the Mount Goldsworthy joint venture, which is currently being mined.

The tenements comprise a number of discrete areas that BHP was unable to retain.

"When BHP Billiton applied for a mining lease for Area C they had to drop their tenure back to a maximum amount of 400 square kilometres," United Minerals chief executive Matthew Hogan told RESOURCESTOCKS.

"Back then iron ore prices were different and if it wasn't obviously popping up out of the ground, they really didn't want to know about it.

"So this project is basically the first time a small company has got tenure in the heart of the Pilbara iron ore region."

Being right in the middle of the Pilbara iron ore heartland has given United Minerals a big advantage over tenements of a similar nature that are usually held by other junior exploration companies.

The tenements encompass some of the Pilbara's major points of infrastructure and either pass directly over or lie adjacent to them. These include the BHP Area C iron ore mine; the Rio Tinto group Pilbara Iron railway, including the West Angelas mine spur line that links to the Lang Hancock Railway from the Hope Downs mine; the BHP iron ore railway; and the Great Northern Highway to Port Hedland.

United Minerals wasted no time in beginning a substantial reconnaissance program across its tenement area, quickly identifying four areas of outcropping high-grade mineralisation during initial mapping and sampling programs.

These included three Marra Mamba type ore targets in Jocelyn, Camp Hill and Southern Flank and the Fork North Brockman type ore target.

The subsequent drilling campaign carried out by United Minerals last year encountered extensive iron ore mineralisation at multiple locations within E47/1429.

Drilling at the Jocelyn prospect defined mineralisation at depth including 33m at 56.1% iron while drilling at Camp Hill confirmed high and medium-grade mineralisation including 46m at 57.8% iron, which was confirmed as the extension of BHP's neighbouring mineralised body.

The most exciting result from the initial drilling was the discovery of the Railway prospect, an area of high-grade mineralisation under 40m of cover. This included 20m at 61.1% iron in a centrally located part of the Mount Newman member of the Marra Mamba Iron Formation.

Since the initial discovery, the result of an aggressive drilling program of more than 15,000m of reverse circulation (RC) and diamond drilling, United Minerals has outlined high-grade iron mineralisation over a zone 1.5km long by 1.5km wide.

Aeromagnetic data has shown that the Railway deposit, which occurs at the eastern nose of the Milli Milli anticline lying beneath 20-40m of cover, appears to have a distinctive aeromagnetic signature, which is largely coincident with the high-grade Marra Mamba mineralisation that was defined by the drilling program.

Assay result highlights from the early 2008 drilling include 79m at 60.5% iron from 45m to 124m, 57m at 63.1% iron from 52m to 109m, 36m at 63.2% iron from 41m to 77m and 20m at 61.1% iron from 35m to 55m.

It is two of the latest drillholes that have particularly sparked United Minerals' interest. They returned exceptional intersections of 100m at 61.1% iron from 57m to 157m and 80m at 64.4% iron from 70m to 150m.

"These holes were drilled 100 metres east from our previously announced drillholes," Hogan said.
"They are noteworthy as they set a new standard for the Marra Mamba mineralisation we have discovered at the Railway prospect forming a continuous mineralised zone between the holes."

The assay results from these two holes are very significant as they demonstrate the existence of a strong lateral continuity of thick, high-grade iron mineralisation over 300m in an east-west direction and 160m running north-south.

The thickness of the mineralised zone has been increased from an average of 30m to 90m providing an outline for an open-pitiable body with low strip ratios.

The large widths of high-grade iron mineralisation that United Minerals' recent assay results have revealed are considered to be unusual for Marra Mamba ore bodies where average widths of around 25m are more common.

The widths received at the Railway deposit have given the company cause to think structural folding and fault repeats therein could have a very positive influence on iron ore distribution in the central part of the deposit.

Since the commencement of drilling in early April 2008, United Minerals has completed 135 holes for 13,200m of RC drillingat Railway. Approximately 20 holes for a further 1500m of drilling remain to complete the phase two 100m by 80m drill-out.

"We want to accelerate our exploration of Railway because we want to find out, by the end of the year, what the global tonnage could potentially be at some of these other targets," Hogan said.

"We want to push the exploration along. Obviously Railway is a fantastic discovery, but for us, it could be one of many."

The aeromagnetic data also revealed a similar, but larger, aeromagnetic signature at the western covered nose of the Weeli Wolli anticline, which was named Jumbo Junction.

The Jumbo Junction target area represents a high priority exploration target for the company for additional high-grade Marra Mamba mineralisation as it lies just 5km directly along strike to the west from the BHP Area C mine.

United Minerals recently announced it had received a report from Hawke Geophysics regarding the results of a ground gravity survey over the Railway East target area, which is located 3km east of the main Railway prospect where an initial 20-hole drill program of up to 3000m of RC drilling was commenced in July.

Gravity data was collected on a 40m by 400m grid in the area based on a combined interpretation of regional aeromagnetic data and the newly acquired ground gravity data.

The ground gravity survey defined a 3km long shallow Marra Mamba iron formation target as a priority one drill target area. The survey also defined two gravity anomalies as buried haematite detrital targets.

"We aim for an initial inferred JORC resource at Railway by the end of July," Hogan said.

"If exploration is successful at our other targets, we hope to be drilling out new resources elsewhere before the end of the year."