Drilling campaign
Drilling on the project commenced in July of 2008 and the maiden Inferred Resource of 476Mt at 55.4% Fe was announced on 1 April 2009.
Further drilling in the 2009 campaign extended this resource to 511Mt @ 55.4% Fe.This Inferred Resource estimate was based on the results of 301 reverse circulation (RC) drillholes in Blackjack, Champion, Delta and Eagle exploration areas for a total of 15,038m drilled between August and December 2008. Drilling was completed to JORC compliant Inferred Resource status with drill spacing of 500m by 200m, and infill to 500m by 100m in the narrow headwaters and the margins of the channels.
Flinders Mines commenced its 2009 drilling campaign on 23 May. To the end of July 2009, a further 174 RC drillholes have been completed for 6,978m. The majority of these holes have been drilled at Ajax targeting both CID and BID mineralisation with the aim of adding to the Inferred Resource estimate. Additional drilling has also been carried out at Blackjack, Champion, Delta and Eagle, targeting extensions of BID mineralisation.
As of November 2009, a total of 872 holes for 41,125 metres have been drilled at Flinders Mines’ Blacksmith and Anvil tenements.
2010 Drilling strategy
The 2010 drilling campaign commenced on Friday 23rd April.
As previously reported, the resource currently considered in the Prefeasibility Study (PFS) being undertaken by WorleyParsons, is at Flinders’ Delta deposit only. This 2010 drilling program now under way is designed to increase the tonnage of higher quality zones for the PFS by extending Indicated category resources outside of the Delta deposit. The new campaign is testing both open intersections and higher grades from existing drilling or areas completely untested by drilling.
A first phase will initially drill these areas to Inferred status and establish if they contain higher quality material. The areas which do will then be drilled to a more detailed density to increase the higher quality Indicated Resource tonnage.
Program Details
FMS has secured two RC drill rigs from McKay Drilling and a third RC rig from Boart Longyear. Drilling will commence on the Delta South area to complete the Indicated Resource at Delta. A minimum of 700 drillholes has been planned for 35,000m, although the final number will depend on initial results and the number of areas requiring Indicated status drilling. Heritage surveys and Department of Mines & Petroleum approvals have already been obtained for these planned holes.
Proposed Drilling AreasFigure 2 illustrates the extensive areas which are planned to be tested during the 2010 campaign. It also shows the location of existing RC drillholes and the current Indicated and Inferred resources. The figure highlights the paucity of drilling data within many of the proposed drilling areas. Areas for testing have been chosen because they have open mineralisation, nearby grades of interest or are completely untested.
The work currently being carried out under the PFS has highlighted specific high–priority mineralised zones which may provide a DSO product or a saleable product through minor processing. The specific mineralisation targeted is the Channel Iron Deposit (CID), at the base of the channel, and the usually underlying Bedded Iron Deposit (BID) material.
Upside potential
Hypogene hematite
The BID mineralisation, also known as Brockman-style, is a high-grade, high quality mineralisation that is considered to be amongst the most valuable types of iron ore mineralisation in the Pilbara. Drilling in 2008 targeted channel iron deposits (CID), however significant quantities of BID were discovered late in the drilling season. The location of BID mineralisation is not controlled by the location of the channels and many intersections of BID mineralisation were not closed off during 2008.
The search for hypogene hematite (or hematite BID mineralisation) is based on exploration concepts which require further geological interpretation to be fully developed. Drilling commenced late in 2009 with initial experimental drilling of several geological structures for hypogene hematite. BID hematite mineralisation was intersected but not of ore grade. Geological mapping has confirmed that the mineralisation extends outside the channel areas and its location appears to be controlled by geological structures. Further mapping and interpretation from channel drilling is necessary to provide several zones for evaluation later in 2010.
BID mineralisation can take two forms: a goethite rich type of BID resulting from near surface (supergene) weathering and a hematite-rich type of BID resulting from hydrothermal (hypogene) alteration, although there is much conjecture on this issue. The BID mineralisation intersected to date at Blacksmith is the goethite type. The hematite BID is the most highly prized in the Pilbara due to its very high iron grades and very low contaminant levels. During the normal course of geological interpretation, exploration has been carried out for hematite BID, targeting structural features.
Development
The 2009 financial year saw Flinders Mines declare its maiden Inferred Resource on the Blacksmith exploration licence and the undertaking of a Scoping study (completed in July 2009) to determine whether the development of an economic iron ore mine is possible. The Company's first Indicated Mineral Resource was announced in April 2010.
Results of Pilbara Project resource estimation, based on the Company’s 2009 drilling program, were released in April 2010. This involved the first Indicated Resource from closer spaced drill holes at the Delta deposit (Delta Indicated Mineral Resource estimate of 157Mt at 56.5% Fe) and gave a new Global Indicated and Inferred Resource of 550 million tonnes at 55.6% iron.
Further potential DSO ore is present at the other four deposits (Ajax, Blackjack, Champion and Eagle) and the Company is currently finalising work on this estimate.
This year (2010) is an exciting time for Flinders Mines as we carry out a Prefeasibility study for the Pilbara Iron Ore Project.
WorleyParsons Limited — internationally renowned for its expertise in the resources and energy sectors, and specifically for its iron ore experience — has been awarded the contract to manage the Prefeasibility Study.
The Prefeasibility Study will progress on the basis of the Scoping Study and is expected to be completed in June 2010.
The scope of the Prefeasibility study will include :
- Continued RC drilling on the Delta deposit to take the resource classification to JORC Indicated status.
- Exploring all aspects of the potential project, including mining, processing, infrastructure alternatives, workforce and accommodation requirements.
- Commence environmental, baseline flora and fauna, heritage and cultural surveys/monitoring programs to support the mining proposal.
- Prepare the required documentation and gather appropriate data necessary to apply for a Mining Lease over the nominated areas of potential mine and infrastructure development.
- Design and develop a program to confirm ore-characterisation, mineability and geology.
- Complete a program of metallurgical work based on diamond drill samples. This work will assist in the development of our understanding of the ore characteristics, and assist in definition of our potential products. The first phase of testwork will encompass examination of the ore’s physical properties such as hardness, mineralogy, lump/fines ratio, wet and dry sizings, bulk density and other handling properties and engineering testwork comprising Unconfined Compressive Strength (UCS) and Crushing Work Index (CWI).
- Complete hydrological testwork and groundwater modelling.
The Prefeasibility Study will cover the entire “mine to ship” aspects of the Pilbara Project, from mine and infrastructure development, to environmental and safety considerations, permitting and approvals, marketing, financial modelling, and the establishment of an integrated management team for the project.
The Bankable Feasibility Study is scheduled to commence in the third quarter of 2010.
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