Here's another piece of information some of you might like to read, it came out yesterday afternoon after market close.
By Alex Wilson
Of DOW JONES NEWSWIRES
MELBOURNE (Dow Jones)--The market hunger for iron ore stocks was on show Thursday when
shares in junior explorer Flinders Diamonds Ltd. (FDL.AU) rocketed up in value more than
eight times on news it had identified a large iron ore target.
Flinders shares traded as high as 9.4 cents and ended at 8.9 cents after ending the
previous day's trade at just 1 cent after it said it had identified a target of
between 325 million and 390 million metric tons averaging 56% iron at one of its
tenements in the remote Pilbara region of the northwest of Western Australia.
The tenement is adjacent to the billion metric ton iron ore resource Fortescue Metals
Group Ltd. unveiled at its Solomon project last week.
Analysts said, if an iron ore resource of that size is proven, it is likely that
Flinders would end up doing a deal with Fortescue to develop the prospect.
Flinders managing director Kevin Wills said the company is still pondering its next
move, but he expects it will launch a drilling campaign to try to prove up the resource.
"We have got a team of people who are quite capable of doing that, and I think
that is probably the way that Flinders shareholders will get the most benefit," he
told Dow Jones Newswires.
"Down the track we may well decide that we want to do a deal with someone else,
particularly those who have got infrastructure in the area."
Fortescue plans to build a railway to service its own project in the area, and the
railway of Rio Tinto Ltd. also runs near the Flinders tenement.
Fortescue executive director Graeme Rowley said the iron ore developer already has
joint venture agreements with Flinders in the Pilbara, and the license that contains the
target announced Thursday has been the subject of discussions in the past.
"It is a piece of ground that they asked us to JV in, but we have not reached any
agreement with them as yet and that is not imminent either," he said.
Flinders hasn't done any drilling to back up the estimated size of its target,
which is based on the assessment of a geologist who is familiar with the region.
Wills said that although the estimate is based on the best available local experience,
there has been insufficient work carried out to estimate a mineral resource.
"It is also therefore uncertain whether further exploration will result in a
larger, smaller or any mineral resource," he said.
Wills said the company believed it could prove up a resource at a cost of about A$2
million with a two-month reconnaissance drilling campaign to identify targets followed by
a second two-month phase of infill drilling.
Analysts said there was a good chance Flinders tenements would contain iron ore but
that there was a lot of work to do before the company could realistically start talking
about how much it had in the ground.
That didn't stop investors piling into the stock Thursday with 1.9 billion shares
changing hands.
-By Alex Wilson, Dow Jones Newswires; 61-3-9671-4313; [email protected]
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(END) Dow Jones Newswires
November 22, 2007 01:02 ET (06:02 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.
Thursday 22 November 2007 17:02:17:450 AEST
FDL
flinders diamonds limited
