IMX Resources boosts Phase 2 Resource by 139%, bodes well for early 2012 production

IMX Resources (ASX: IXR) continues to deliver a string of positive news from the 51% owned Cairn Hill project, with the latest a 139% boost in the Phase 2 Resource to a JORC 8.37 million tonnes at 46.7% iron with a 35% iron cut-off grade.

Importantly, 45% of the resource is in the higher confidence Indicated category - and is held by Termite Resources NL which is 51% owned by IMX Resources and 49% by Sichuan Taifeng Group.

The new estimate is based on infill and resource extension drilling completed between June 2007 and April 2011, and estimated over a 3.3 kilometre strike length.

The major benefit for IMX Resources with the upgrade is the ability to execute economies of scale and resources, considering Phase 2 is located within the mining lease and immediately adjacent to the current mining activities in Phase 1.

The progression of Stage 2 is well underway, with mine planning and optimisation studies having been kicked off to delineate the mineable in-pit resources, based on the upgraded resource, with the aim of bringing Phase 2 into production in the March quarter of 2012.

Phase 2 is still in the early stages, but if this stage is able to reflect the success of Phase 1 - then IMX Resources will have developed a very profitable operation.

The benefit of Stage 1 is a unique magnetite iron – copper – gold DSO ore, which produces a premium coarse grained magnetite product, with a clean saleable copper / gold concentrate.

Highlighting the saleability of the product, IMX Resources already has a Phase 1 life of mine sales off-take agreement with Sichuan.

Adding some spice to Phase 1 - earlier in the week IMX Resources secured an additional two shipments of Cairn Hill ore for delivery in the next two months, which is in addition to the four shipments announced in July.

The company said these sales, together with an anticipated additional six cargoes over the next four months, will be sold as trial shipments with the anticipation that one of these customers will then enter into a long term supply contract, thereby diversifying the risk of a single customer.

The shipments have been at prices averaging approximately US$100 per tonne FOB.

The Cairn Hill mine has now ramped up to full production of around 140,000 tonnes per month being produced and shipped.

Cash costs FOB, including royalties and administration, are now running at around $75 per tonne and additional project optimisation is expected to reduce costs further.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/18517/imx-resources-boosts-phase-2-resource-by-139-bodes-well-for-early-2012-production-18517.html