Thursday, 21 July 2011

Reed Resources boosts JORC Resource by 38% at Mt Marion Lithium Project

Reed Resources (ASX: RDR) has increased total JORC Resources at the Mt Marion Lithium Project by 38% to 14.9 million tonnes (Mt) at 1.3% Li2O for 201,000 tonnes of contained lithium oxide (Li2O).

The Resource estimate was undertaken by Hellman and Schofield, with the previous estimate 146,000 tonnes at Li2O, which is located 40 kilometres south of Kalgoorlie in the goldfields region of Western Australia.

Mount Marion is the World’s second biggest lithium concentrate operation under construction and commissioning is scheduled for December 2011.

A third phase of resource definition drilling has confirmed high-grade pegmatites at the No 4. Deposit and at new location, the Area 6 Prospect.

The average intercepts of high-grade mineralisation for these two areas is 9.5 metres at 1.44% Li2O and 1.18 % Fe2O3, using 0.4% Li2O lower cut-off grade.

The final phase of resource definition drilling has been deferred pending mining assessment of new Area 6 Prospect which is the project’s highest grade resource.

Christopher Reed, Reed's managing director, said ”this is an excellent result and confirms the high prospectivity for defining additional resources in these Lithium bearing pegmatites.

"The new resources at Area 6 and the Number 4 deposit alone potentially add years to the mine life at a discovery cost of less than 15 cents per resource tonne. It should also be noted that this drilling has not closed off any of the pegmatites either along strike or down dip."

There still remains a significant amount of extensional upside to this area and the work has been undertaken to ensure that once the company commences production it has significant known resources so that it can develop quickly to respond to increasing market demand.

Together with partner Mineral Resources (ASX: MIN), Reed plans to initially commence operations at Mount Marion with a capacity of 200,000 tonnes per annum (tpa) of 6% Li2O chemical grade spodumene concentrate, 60,000 tpa of mica and 30 tpa tantalite concentrate.

Given the exceptional grades and the size potential of the resource in Area 6 from essentially exploration drilling, the company has deferred a final phase of infill and extension drilling.

Reed will now complete a detailed mining assessment to guide the preparation of a detailed infill and extension drill program.

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