TIDMFRX
RNS Number : 8174W
Ferrex PLC
06 February 2012
Ferrex plc / Index: AIM / Epic: FRX / Sector: Mining
6 February 2012
Ferrex plc ('Ferrex' or 'the Company')
Malelane Iron Ore South Africa and Nayega Manganese Togo
Exploration Update
Ferrex plc, the AIM quoted iron ore and manganese development
company focused in Africa, announces a positive update on its
4,192ha Malelane Iron Ore Project ('Malelane') located in the
Mpumalanga Province of South Africa and its 92,390ha Nayega
Manganese Project ('Nayega') located in northern Togo.
Overview
Malelane Iron Ore Project - South Africa
-- 1,731m drill programme and preliminary metallurgical testwork
confirms potential for low capex iron-ore development at
Malelane
-- Further high grade intercepts recorded down dip of historical
workings: 17.29m @ 59% iron ('Fe') (60% CaFe*) and 6m @ 62% Fe (67%
CaFe), with additional high grade intercepts both east, 19m @ 56%
Fe (61% CaFe) and west, 13m @ 56% Fe (61% CaFe) of the historical
workings
-- Wide intervals of the main zone banded iron formation ('BIF')
iron mineralisation intersected over a strike length of 900m of the
14km BIF package identified including 198m @ 48% CaFe and 120m @
47% CaFe
-- Maiden inferred resource on track for Q1 2012, with further
drilling planned to commence in Q2 2012 aimed at both increasing
the resource and upgrading to the Indicated category
-- Positive preliminary metallurgical testwork - very coarse
grind size is optimal for pre-concentration to 55% CaFe, which
could significantly reduce capital and operating costs
Nayega Manganese - Togo
-- Systematic test pitting has been completed, depths excavated
confirm historically reported widths of manganese ('Mn')
mineralisation
-- Initial assay results average 14.4% Mn and peak at 28% Mn,
consistent with exploration target grades
-- Bulk metallurgical sample will be collected and shipped to a
commercial laboratory for preliminary testwork
-- Maiden resource and preliminary metallurgical testwork targeted for Q2 2012
-- Management believe Nayega ore has the potential to be easily
mined and upgraded via a low capex gravity plant
Ferrex Managing Director Mr. Dave Reeves said, "Resource
delineation programmes at both our Malelane Iron Ore Project in
South Africa and Nayega Manganese Project in Togo have returned
impressive results and we are on track to deliver maiden resources
at both projects in Q1 2012 and Q2 2012 respectively.
"At Malelane, in addition to high grade intersections such as
17.29m at 59% Fe (61% CaFe), the recent drill programme has
encountered unexpected high grade mineralisation at depth over 500m
away from the historically known high grade mineralisation, and
highlights direct shipping ore (DSO) potential which we'll further
investigate through an additional drilling programme in Q2 2012. I
am also excited at the initial metallurgical test results which
demonstrate the opportunity for significant capital and operating
cost savings through the potential to pre-concentrate the ore to
55% CaFe via a crush or coarse grind. Savings should be achieved
through lower power consumption and smaller plant requirements, and
when combined with the proximity to existing transport
infrastructure, both rail and port, improves the already compelling
economic potential of this project.
"At Nayega pitting has confirmed the results of historic
exploration and it is the Company's belief that ore has the
potential to be easily mined and upgraded via a low capex gravity
plant. Importantly, this project also has the potential to supply
significant early cash flow to the Company if the metallurgical
testwork supports on-ground observations.
"With these developments in mind, we look forward to advancing
both projects up the development curve with a target of completing
the bankable feasibility on Nayega and the pre-feasibility study on
Malelane by the end of 2012."
Malelane Iron Ore Project - South Africa
Resource Drilling
Ferrex has completed a five hole (four complete holes and one
tail), 618.75m diamond drill programme designed to test areas of
high grade mineralisation identified in the previous 920m Reverse
Circulation ('RC') drilling programme (intercepts included 16m at
60% (61% CaFe) and 14m at 55% Fe (57% CaFe)). Drill hole SPDD011,
drilled under the centre of the historical workings, intersected
intervals of high grade kenomagnetite-martite and hematite-goethite
mineralisation (enriched BIF) adjacent to the causative syenite
dyke, with intercepts of 17.29m at 59% Fe (60% CaFe) and 6m at 62%
Fe (67% CaFe) returned from either side of the dyke. Three of the
holes (SPDD013-015) were drilled on the same section line at the
southern end of the mineralised trend. One of these holes (SPDD013)
cut a barren dyke injected into the BIF sequence for its entire
length. Holes SPDD014 and SPDD015 intersected the BIF and
mineralising dyke, as expected, however iron enrichment was
relatively weak, with samples returning a peak value of 50% Fe over
0.75m. After 618.75m of diamond drilling the rig was demobilised
because of poor core recovery and due to this poor recovery the
diamond drill results should be treated with caution.
A RC drill rig was mobilised to complete the drilling programme
planned to infill and extend the previously drilled BIF or 'main
zone' mineralisation on the northern ridge. A total of 1,112m of
drilling was completed in seven holes, with all of the holes
intersecting the prospective BIF package. In addition to an
intercept of 194m @ 33% Fe (36% CaFe) in the main zone of
mineralisation, hole SPRC010 intersected 13m @ 56% Fe (61% CaFe)
within its 120m at 44% Fe (47% CaFe) in a new area of high grade
mineralisation, whilst hole SPRC016 intersected 198m @ 45% Fe (48%
CaFe) including 19m @ 56% Fe (61% CaFe) located 500m east
historical high grade excavation. Note that some of the holes ended
in mineralisation due to the depth limitations of the drill rig.
Assay results are still outstanding for two holes with results
received to date being above management's expectations.
Results from this latest drill programme will allow for the
estimation of a maiden JORC code compliant resource at Malelane by
the end of Q1 2012.
Drill hole details are listed in Table 1 and drill hole
locations are shown on Figure 1.
Table 1: Malelane Project drill hole details for last programme
--------------------------------------------------------------------------------------------------------------------------
Hole Hole UTM UTM Elevation Depth Dip Azimuth From To Length Fe% CaFe% Comments
ID type East North (m) (m) (m)
--------- ----------- ------ ------- --------- ------ --- ------- ----- ----- ------ --- ----- --------------
Only sampled
high grade
SPDD011 Diamond 348586 7172051 657 138.43 -50 244.5 50.8 68.1 17.3 59% 60% portions
--------- ----------- ------ ------- --------- ------ --- ------- ----- ----- ------ --- ----- --------------
Only sampled
high grade
128.1 134.1 6 62% 67% portions
--------------------- ------ ------- --------- ------ --- ------- ----- ----- ------ --- ----- --------------
SPDD013 Diamond 348536 7171946 638 63.77 -50 260 No Significant Intersections
--------- ----------- ------ ------- --------- ------ --- ------- -------------------------------- --------------
SPDD014 Diamond 348595 7171959 632 149.42 -50 260 No Significant Intersections
--------- ----------- ------ ------- --------- ------ --- ------- -------------------------------- --------------
SPDD015 Diamond 348641 7171931 624 250 -50 260 No Significant Intersections
--------- ----------- ------ ------- --------- ------ --- ------- -------------------------------- --------------
Finished in
SPRCD018 RC/diamond 349066 7172164 648 167.13 -60 150 0 150 150 33% 35% Mineralisation
--------- ----------- ------ ------- --------- ------ --- ------- ----- ----- ------ --- ----- --------------
SPRC008 RC 349312 7172198 542 139 -50 92.5 Awaiting Results
--------- ----------- ------ ------- --------- ------ --- ------- -------------------------------- --------------
SPRC009 RC 348663 7172077 681 46 -50 255 No samples assayed
--------- ----------- ------ ------- --------- ------ --- ------- -------------------------------- --------------
Incl 13m @ 56%
Fe (61% CaFe)
SPRC010 RC 348527 7171950 638 153 -50 317.5 33 153 120 44% 47% from 118m
--------- ----------- ------ ------- --------- ------ --- ------- ----- ----- ------ --- ----- --------------
SPRC012 RC 349298 7172207 543 175 -50 50 Awaiting Results
--------- ----------- ------ ------- --------- ------ --- ------- -------------------------------- --------------
Incl 19m @56%
Fe (61% CaFe)
SPRC016 RC 348749 7172090 669 199 -60 330 0 198 198 45% 48% from 168m
--------- ----------- ------ ------- --------- ------ --- ------- ----- ----- ------ --- ----- --------------
SPRC017 RC 348749 7172083 669 250 -60 150 0 194 194 33% 36%
--------- ----------- ------ ------- --------- ------ --- ------- ----- ----- ------ --- ----- --------------
Drill hole collars were surveyed with a differential GPS unit
that has a certified accuracy of less than 1m. Analytical samples
for diamond drill holes comprised half core or quarter core (for
field duplicates); for RC drill holes riffle split sub-samples were
collected each metre. Sample preparation was undertaken by
Genalysis (Johannesburg) and analyses by Genalysis (Perth) using
lithium borate fusion with an XRF finish. Ferrex employs a
comprehensive QA/QC programme, comprising analytical standards,
blank samples and field duplicates inserted in to the sample stream
at regular intervals. Core recovery in diamond drill holes was
poor, so intercepts in the diamond holes should be treated with
caution.
Figure 1: Hole locations click on link to view.
http://www.rns-pdf.londonstockexchange.com/rns/8174W_-2012-2-3.pdf
A second diamond drill programme is currently being planned and
is expected to commence at the end of the rainy season in Q2 2012
to target depth extensions to mineralisation from the current 200m
below the top of the ridge level to 300m below the top of the
ridge. Drilling will also look to follow up the recent high grade
intersections received in this latest drilling programme, located
away from the historical workings and will ascertain whether
significant tonnage of DSO material lies at depth along the main
ridge. Targeted strike length is 1km, with widths averaging 200m
and the planned drill programme should allow estimation of
sufficient resources to advance Malelane through pre-feasibility.
The additional drill programme should also allow the resource
category to be upgraded from Inferred to Indicated and will provide
drill core suitable for final metallurgical testwork.
Figure 2: Typical cross section of mineralisation at Malelane,
click on link to view.
http://www.rns-pdf.londonstockexchange.com/rns/8174W_1-2012-2-3.pdf
Metallurgical Testwork
Initial metallurgical testwork has commenced on a composite bulk
sample from the main zone of iron mineralisation. The sample was
obtained by compositing retained drill chips for one of the first
phase RC holes collected from 155 to 200m below collar. The
programme has included Bond work index tests, gravity, WHIMS ('Wet
High Intensity Magnetic Separation') and flotation tests.
Results to date have shown that recovery improves at coarser
grind sizes, which is unusual for iron deposits of this type where
generally a grind size to less than 100 micron is necessary to
achieve acceptable Fe recovery. High levels of goethite, even at
depths of almost 200m below surface, are thought to be the reason.
Further work is required to optimise the grind size, as maximum
recovery has been achieved at 425 micron (0.425mm), which is the
coarsest fraction tested so far. The preliminary flowsheet has
material being ground to 80% passing 425 micron before treatment by
WHIMS, which produces a concentrate grading 55% calcined Fe* at a
weight recovery of 64%. Silica is further reduced by grinding the
concentrate to 45 micron and reverse floating this material to
produce a final concentrate grading between 60 and 65% calcined
Fe.
The next phase of the testwork programme will include evaluating
the use of jigs to pre-concentrate a crushed sample, continuing the
WHIMS tests at coarser grind sizes and additional tests to provide
a cleaner concentrate.
*CaFe is an abbreviation for calcined Fe which is the Fe content
as a percentage of the total mass minus water and organics (which
are burnt off in the blast furnace) and is calculated using the
formula CaFe = Fe% , (100-LOI) x 100. CaFe gives a better view of
the iron units contained in the mineralisation due to the
predominance of goethite as the main iron carrying mineral which is
a hydrated iron oxide.
Further information
Malelane is located over part of the Archaean Barbeton
Greenstone Belt and is located close to infrastructure and is 6km
from an electrified railway line which services the deep water port
of Maputo in Mozambique 170km away.
Three distinct BIF iron formations horizons have been identified
on the property with a combined strike length of 14km and mapped
horizontal widths of up to 300m. As previously calculated by mining
consultants Coffey Mining, Malelane hosts a potential exploration
target between 775 and 930Mt at 34 - 36% Fe. This latest drilling
programme over the northern most BIF identified represents 1.5km of
the 14km package.
Figure 3: Three distinct BIF iron formations 14km at Malelane,
see link to view map.
http://www.rns-pdf.londonstockexchange.com/rns/8174W_2-2012-2-3.pdf
Nayega Manganese - Togo
Resource Delineation
Systematic test pitting has been completed in the core area of
mineralisation of the Nayega deposit. Mineralised widths of up to
9.85m are in line with expectations based on assessment of
historical work.
Initial assay results average 14.4% Mn with a peak of 28%,
consistent with exploration target grades of 14 to 25.5% as
calculated by Coffey Mining. These results are for a total of 5
pits and were assayed to check on repeatability and accuracy of the
pit sampling technique. With the confirmation of the accuracy of
the technique, all other samples will now be submitted for
assay.
Mineralisation encountered falls into two main types, detrital
and in situ. Detrital mineralisation comprises 30% of the deposit
and is characterised by cobbles of manganese oxide to 30+cm across
(typically <10cm) in a lateritic clay matrix. In situ
mineralisation comprises stratified, supergene-enriched
accumulations of sedimentary manganese.
All pits in this resource delineation programme were hand dug,
demonstrating the ease with which mining could be undertaken.
Visual inspection of the pits lends support to the Company's view
that ore has the potential to be easily upgraded via a low capex
gravity plant.
Figure 4: Pitting completed at Nayega, see link to view map.
http://www.rns-pdf.londonstockexchange.com/rns/8174W_3-2012-2-3.pdf
A JORC code compliant maiden resource and preliminary
metallurgical testwork results are targeted for Q2 2012. Assuming
positive results from both these exercises, the Company plans to
undertake a Definitive Feasibility Study with a view to completing
Q4 2012.
Metallurgical Testwork
Two samples of 400kg each (one of the detrital and one of the in
situ mineralisation) are being collected and will be sent to a
South African laboratory for preliminary metallurgical testwork.
The testwork programme will evaluate the effectiveness of
scrubbing, sizing and gravity methods for concentrating the
manganese ore.
Further Information
Ferrex has an 85% interest in Societe Generale de Mine ('SGM'),
a Togolese company that owns the Exploration Permit over the Nayega
manganese deposit ('Nayega') in northern Togo. The project which
has direct access to the major deepwater of Lome in Togo, has an
historic exploration target of 6 - 8.5Mt at 14-25.5% Mn.
Nayega consists of elluvial rubble of manganese minerals spread
over and area of 2.5km by 1km ranging in size from flakes to
cobbles overlying a manganiferous clay horizon, in which hard
manganese oxide fragments are distributed. The clay horizon is up
to 10m thick and the hard fragments are thought to be derived from
narrow veins of massive manganese mineralisation that cut the
underlying sandstone.
Competent Person Statement
Information in this release that relates to exploration results
is based on information compiled by Ferrex Exploration Manager Mr
Mark Styles. Mr Styles is a qualified geologist, a member of the
Australian Institute of Geoscientists and is a Competent Person as
defined in the Australasian Code for Reporting of Exploration
Results. Mr Styles consents to the inclusion in the release of the
matters based on his information in the form and context in which
it appears.
Caution Regarding Forward Looking Statements: Information
included in this release constitutes forward-looking statements.
There can be no assurance that ongoing exploration will identify
mineralisation that will prove to be economic, that anticipated
metallurgical recoveries will be achieved, that future evaluation
work will confirm the viability of deposits that may be identified
or that required regulatory approvals will be obtained.
**ENDS**
For further information and the full Admission document visit
www.ferrexplc.com or contact the following:
+ 61 (0) 420 372
Dave Reeves Ferrex plc 740
+ 44 (0) 781 0870
Russell Lamming Ferrex plc 587
Colin Aaronson/ David Grant Thornton Corporate +44 (0) 20 7383
Hignell Finance 5100
John Prior / Sebastian Collins Stewart Europe +44 (0) 20 7523
Jones Limited 8350
St Brides Media and Finance +44 (0) 20 7236
Felicity Edwards Ltd 1177
Notes
Ferrex plc is an AIM quoted exploration and development company
focused on advancing low capex iron ore and manganese projects in
Africa through the development cycle and into production. Our
current property portfolio comprises iron ore (Malelane) and
manganese (Leinster) projects in South Africa and a manganese
project (Nayega) in Togo, all of which offer the potential for
significant near-term value uplift.
The Company's growth strategy is centred on advancing its
current assets, utilising its Board and management team's
considerable experience in developing resource projects across
Africa and expanding its portfolio through acquisitions to build
Ferrex into a mid-tier, low-cost producer of iron ore and
manganese.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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