Monday, 20 February 2012

Padbury Mining progresses Pre Feasibility work at Peak Hill Iron Project

Padbury Mining (ASX: PDY) is working towards the next targeted stage of development at the Peak Hill Iron Project with the appointment of CSA Global to carry out a pit optimisation and mine planning study.

This study will contribute important data to a Pre-Feasibility Study planned at the Peak project.

Gary Stokes, managing director of Padbury, said the study by CSA Global was the next necessary step in the strategic development of Peak Hill.

“We are focused on moving the project forward and 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.

Padbury Mining 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.

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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