Monday, 20 February 2012

Aurium Resources works towards next stage of development at Peak Hill Iron project

Aurium Resources (ASX: AGU) has appointed CSA Global to undertake a pit optimisation and mine planning study which will provide important data for progression of a Pre-Feasibility Study at the Peak Hill Iron Project.

The Pre-Feasibility Study is the next targeted stage of project development at Peak Hill.

Aurium managing director Terry Quinn said the company was focused on moving the project forward.

“This is the next necessary step in the strategic development of Peak Hill,” he said.

“[We] have been encouraged by extremely positive drilling results from our recent resource evaluation program – for both magnetite and direct shipping ore.”

Peak has an established Inferred JORC Resource of 850 million tonnes at 27.3% iron at the large Telecom Hill East magnetite deposit.

In addition, the company yesterday confirmed direct shipping ore (DSO) potential at Peak Hill, directly adjacent to the Resource at Telecom Hill East. Mineralisation is open to the east, west and at depth.

While CSA Global’s optimisation study will focus on magnetite mining and processing, based on the existing Resource, further work will focus on the potential for DSO.

Aurium is targeting a maiden DSO Resource from the recent drilling program which, if defined, will allow for the modelling of a DSO mining operation.

Drilling at Peak Hill is ongoing, targeting magnetite deposits and extensions to DSO mineralisation, while preparation for the next phase of regional exploration is well advanced to assess substantial areas of untested banded iron formation stratigraphy present in the project tenure away from Telecom Hill.

Exploration target highlights resource upside

The Peak Hill Project has an exploration target of 3.5 to 5 billion tonnes at 25% to 35% iron covering an extensive 2,500 square kilometres, and is prospective for magnetite and hematite iron ore.

Telecom Hill alone has a direct shipping ore exploration target of 10 to 55 million tonnes at 55% to 58% iron.

At the Mt Padbury Prospect, an exploration target of 20 to 28 million tonnes at 55% to 60% iron has been defined.

Aurium to merge into Padbury Mining

Aurium has a 30% interest in Peak Hill, while joint venture partner Padbury Mining (ASX: PDY) holds 70%, with the two companies earlier in the month signing a binding Scheme Implementation Agreement, marking the completion of merger negotiations.

The merger will simplify the future project development, and by being run by a single entity will also save costs while making the decision making process quicker.

Terry Quinn will be appointed executive chairman of Padbury while Gary Stokes will remain managing director of Padbury, with William Han to remain a non-executive director.

The project is located in the Mid-West region of Western Australia which has grown in stature as a major iron ore province.

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