Sunday, 19 February 2012

Padbury Mining has unlocked development opportunities by identifying DSO iron at Peak Hill

Padbury Mining (ASX: PDY) is a company on the move, as has today confirmed the previously stated direct shipping ore (DSO) potential of the Peak Hill Iron Project.

At the Telecom Hill East target DSO mineralisation has been intersected in multiple holes, with the peak result; 29 metres at 62.8% iron, 4.9% Si02, 2.6%AI203 and 0.09%P.

The location of the DSO is strategic as it occurs directly adjacent to the large Telecom Hill East magnetite deposit which already hosts an Inferred JORC Resource of 850 million tonnes at 27.3% iron, highlighting the opportunity for a near term tonnage and grade increase.

Mineralisation is open to the east, west and at depth.

Adding a further level to the potential of the area, additional DSO targets have already been identified to the west on the Telecom Hill ridge.

Gary Stokes, managing director of Padbury, commented on the positive exploration news:

“Direct shipping ore offers Padbury more flexible development opportunities and potential as well as the development of the Peak Hill magnetite processing operation, which promises to be significant.

“These early results are very encouraging and we look forward to the completion of laboratory work and continuing our exploration program.”

As well as drilling, preparation for the next phase of regional exploration are well advanced to assess the 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

Padbury to merge with Aurium Resources

Padbury has a 70% interest in Peak Hill with joint venture partner Aurium Resources (ASX: AGU) 30%, 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.

Gary Stokes will remain managing director of Padbury, while Terry Quinn (previous managing director of Aurium) will be appointed executive chairman 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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