Exploration activities review

Detailed geological mapping by Flinders has confirmed a resource target now estimated at between 333 and 380 million tonnes at the Flinders’ 100% owned tenement E47/882 in the Hamersley Ranges of Western Australia.

Flinders Iron has received approval for drilling and has commenced a five-month drilling campaign, with two reverse circulation drill rigs, comprising 250 RC holes for a total of 20,000 metres, to assess the Hamersley iron ore target. Flinders intends to drill all five target areas to a JORC Inferred Resource status prior to the end of 2008. Interpretative and geological mapping will commence on newly acquired tenement E47/1560 with planning for drilling in 2009.

Commencement of Drilling on E47/882

Flinders has commenced reverse circulation drilling on the Hamersley E47/882 licence in the Pilbara region of Western Australia. This is part of an $8 million program to assess a target area containing numerous indications of significant Channel Iron Deposit (CID) and Detrital Iron Deposit (DID) mineralisation. Commencement of RC drilling for an initial program of 250 RC drill holes for 20,000m follows final approval received from the WA Department of Industry and Resources on Wednesday 2 July 2008.

Initial exploration drilling started in Area E (see map below) to determine the nature, extent and thickness of the mineralisation. The remaining four areas will be subsequently drilled in three phases to establish inferred resources for all five areas during the final quarter of 2008. Although the anticipated commencement date of drilling has been delayed, a second drill rig has been contracted to make up for the lost time. The first of the drill samples will be dispatched to the laboratory during July with first results available in August 2008.

A complete team of 10 Flinders staff and contractors have been hired to manage two drill rigs. A fly-camp has been established for an initial operations base. Building approvals from the Ashburton Shire were received and a 20-person Ausco camp is currently being constructed onsite. All of the proposed drill lines and drill holes in Area E have been cleared in preparation for drilling.

The building of a dedicated geophysical logging truck is expected to be completed in early August 2008. This logging truck will allow for centimetre scale, in situ analysis of drill holes to determine physical properties of the rock that can be used for geological interpretation, and factors that will be important for mining, such as density and porosity. A temporary portable logging system for measuring density has been mobilised to site and will be used in the interim until the truck arrives onsite.