ATLAS Iron says results from initial drilling of its Pardoo magnetite project support the previously stated exploration target of 1-1.5 billion tonnes and compare favourably with other magnetite deposits in Western Australia.
Atlas Iron's Pardoo iron ore project lies 75km from Port Hedland, Western Australia
Atlas plugged 12 reverse circulation holes into Pardoo, with five testing an 800m by 2300m target on the Ord Range and seven testing a 4000m by 700m target on Ridley Range.
The Ord Range drilling intersected 168m grading 35.15% iron, 162m at 35.11% iron and 120m at 35.98% iron. Drilling at Ridley Range achieved hits of 154m at 37.78% iron and 90m at 39.13% iron.
The drilling tested up to depths of 200m and "holes typically ended in mineralisation", Atlas said.
"It's clearly a really big deposit," Atlas managing director David Flanagan told MiningNews.net.
"What the company's going to do is spend 5-10% [$1-2 million] of our exploration budget over the next year scoping it out."
He said Atlas hopes to drill out the best bits of the deposit in the early part of 2007 but within three months the company aims to have a magnetite deposit characterisation study completed, which will detail the metallurgical aspects of the mineralisation.
"We're definitely not going to look at doing this alone," Flanagan said.
"So it's a case of scoping up the size of it and bringing in a partner."
He said sale of the project is also an option.
"We're commercial so we have to look at all of those things and the precedents that have been set recently value these things quite highly," Flanagan said.
Atlas conducted preliminary Davis Tube Recovery work on a number of samples from the Ridley Range drilling produced a concentrate grade of up to 68.6% iron.
"What's key about our stuff is it looks as though the weight recoveries are high and the silica levels can be low," he said.
Flanagan said the preliminary drilling has indicated the mineralisation will have a low strip ratio of less than 0.5:1 which could potentially result in relatively low operating costs.
Flanagan said Pardoo lies 75km from Port Hedland making it proximal to power, water, road, rail and a deep water port, all crucial for a large-scale magnetite project.
Atlas is focused on getting a hematite operation up and running at Pardoo in the 2008 March quarter. The project will begin at a rate of 1 million tonnes per annum before production is increased to 3Mtpa by 2010.
The company hopes to increase Pardoo's current hematite resource of 7.2Mt grading 57.2% iron in January 2007.
Shares in Atlas were steady at 58.5c by midday.
AGO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
