Wednesday, 20 July 2011

Image Resources tots 240% increase in heavy minerals at Gingin South in WA

Image Resources (ASX: IMA) has boosted the resource base at Gingin South Resource by a whopping 240% to  8.1 million tonnes at 6.1% heavy minerals (HM) containing 492,000 tonnes of HM, following the discovery of a major extension to the Gingin South deposit.

The previous Indicated and Inferred Resource was 5.2Mt at 6.6% HM containing 348,000t of HM at a 2.5% HM cut-off. The new extension increases the defined resources in the Gingin area to 1.3Mt of HM.

This result provides the first drilling evidence of the significant potential to further upgrade and increase the Gingin shoreline deposits.

Image expects its next drill program to further enhance this prospective shoreline.

The new resource is being included in Image’s developing mine plan for the North Perth Basin.

Testwork conducted by previous owner Iluka Resources (ASX: ILU) on Gingin South shows the ilmenite to be of mainly chloride/SR quality, with potential to attract a price premium.

This new resource is situated immediately south of and contiguous with the HM deposit within mining lease M70/448 acquired from Iluka Resources in March 2011.

The new extension has increased the total deposit length to 5.5 km, with widths varying between 40 metres and 250 metres and averaging 120 metres.

Image identified high grade HM mineralisation immediately south of the Gingin South HM deposit in 2010 and subsequently infilled it to a 100m x 20m drill spacing in early 2011, but only about 40% of these assays have been completed.

An updated Resource estimate will be prepared and released upon completion of processing of these drill samples.

Additional HM composites are being prepared and these will be submitted for QEMSCAN analysis, to provide sufficient data for a Measured Resource to be estimated along most of the 5.5km resource extension.

A central 800 metre section of the Resource has not yet been drilled due to drill rig availability and timing issues with one land holder. The company   expects this area to be drilled in September 2011.

The overall Gingin South resource will become part of the updated Scoping Study that the Image is undertaking on the nine deposits that currently comprise the North Perth Basin Project.

Of these nine deposits, four are situated in close proximity to the Atlas Deposit (Cooljarloo Area) and contain a total dry mining resource of 1.7Mt of HM.

The Red Gully, Boonanarring and Gingin North resources in the Gingin area contain a total of 0.81 Mt of HM.

The new Resource at the Gingin South extension adds another 0.49Mt of HM, bringing the resources in the Gingin project area to 1.3Mt of HM and total North Perth Basin dry mining resources to 3.0Mt.

Following the Gingin South Resource upgrade, Image has opened up a new centre of potential operations.

The Gingin project is estimated to have about 10–18Mt at 8–10% HM target with contained 1–1.5Mt HM and 0.6–0.9% zircon in ground.

With more increases in titanium feedstock and zircon prices the project economics for Image’s North Perth Basin project would have improved further with today's result.

Today's resource upgrade, along with the anticipated estimation of Measured and Indicated resources, points to the potential re-rating of Image.

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