Centrex Metals: total Eyre Iron magnetite Resource increases to 668.4Mt

Centrex Metals (ASX: CXM) has released the results of continuing resource evaluations which has increased the total Eyre Iron Resource to 668.4 million tonnes. 

The latest evaluation covers the Greenpatch prospect with a 54.8 million tonne Resource established at an estimated magnetite recovery of 26.8% (DTR) and a concentrate grading 68.3% iron.
Managing director Jim White told Proactive Investors today in real terms it is a relatively small addition, but accumulatively it adds to the total amount of Resources that are now part of the Eyre Peninsula Joint Venture.

The high concentrate grade results were achieved at a relatively coarse grind size of 75μm.

The Greenpatch prospect is located approximately 10 kilometres northwest of Port Lincoln on South Australia’s Eyre Peninsula.

The resource evaluations are being completed by Eyre Iron, the management company of the Eyre Peninsula Joint Venture of which Centrex holds a 40% interest and Wuhan Iron and Steel Co (WISCO) holds the remaining 60%.
Further additions to the total Eyre Iron Resources are expected as exploration targets are drilled out.
White said the 454.4 million tonne Fusion magnetite project remained the joint venture's main focus.

"Our focus is to develop the Fusion area and to keep adding to our Resource base for the total project by drilling out further exploration targets,” he said.


Centrex Deemed Undervalued by Broker

Significant resource upgrades and project advancement since May 2011, a strong board and management, and the ownership of a potential port site have attracted a speculative buy rating for Centrex from a broker.

Centrex, with an EV of A$22 million or $0.06/tonne on an EV/tonne of contained iron basis, is significantly undervalued compared to its peers. The weighted average EV/tonne for explorer/developer peers of Centrex is $0.11/tonne.


Fusion

Significantly, resources at the Fusion project are now close to the critical mass required to support a 5 million tonne per annum magnetite operation.

In early November, Centrex and joint venture partner WISCO selected the Fusion project just west of Tumby Bay as its preferred mining project for first development.

Fusion is among a suite of advanced exploration assets under drilling and assessment by the joint venture partners across southern Eyre Peninsula.

Importantly, the project is located just 40 kilometres from the proposed Port Spencer deep water export facility that Centrex is also developing, with transport from mine to port to occur via a low impact slurry pipeline.

In particular, the three adjacent magnetite prospects of Koppio, Brennand and Kapperna have been selected as the priority location for assessment and are seen as capable of supporting a large-scale, long-life magnetite concentrate operation, as well as the necessary infrastructure.

The fourth deposit, Iron Mount, located on the eastern edge of the Fusion area, could provide ore feed for the project in the longer term.

The joint venture partners are confident of proving up a large enough resource base at Koppio, Brennand and Kapperna to underpin the initial 20 year mine life.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/24077/centrex-metals-total-eyre-iron-magnetite-resource-increases-to-6684mt--24077.html