Core Projects
Cairn Hill

 Phase 1 Magnetite – Copper – Gold Project

JORC Inferred and Indicated Resource 11.4Mt at 49.5% Fe, 0.4% Cu and 0.1g/t Au on a diluted basis.

Mineralisation remains open at depth with new intersections recorded to the west and below the current resource model.  The mine planning indicates 7.3mt at 50.9% Fe and 0.41% Cu will be mined over approximately 5 years with a strip ratio of 3.8:1.

Project will nominally produce 1.7 million tonnes per annum (mtpa) of ore after ramp up.

  

Jilin Tonghua Iron & Steel (Group) Mining Co Ltd will purchase up to 1.4mtpa of ROM ore on a 3 year contract. Ore will be processed at a purpose built processing plant at Bayuquan in Liaoning Province in NE China. The processing plant can be completed within 3 months of IMX securing funding.

 

Shipping could commence within 4 months of receipt of funds and shipping licence to export ore through Port Adelaide.
 
All site approvals required to commence mining have been received. Flinders Ports, operator of Port Adelaide, has received development approval. Application for shipping licence in progress.
 
Project review determined that Port Adelaide was a better option for Cairn Hill ore exports due to significantly lower capital cost ($9m v $44m for Darwin), albeit at a higher operating cost as inland freight rebate is no longer paid by Tonghua.
 
All infrastructure civil works have been completed and equipment purchased ready for installation.
 
For the long run viability of the project with uncertainties in the iron ore prices and foreign exchange rates in the future, it has been essential to optimise the cost base of the project, as far as possible. Rail is 40% of the FOB costs.
 
The absence of a cape size port at Pt Bonython adds between $8 to $10 per tonne to the FOB costs. Rapid progress on the development of Pt Bonython is essential for the expansion of Cairn Hill and for longer term viability of the iron ore industry in South Australia.
 
 

Pictures A, B, C, D: Cairn Hill Trial Mine - the dark area in images B and C is exposed ore with blasted ore evident in image D.

 

 

Phase 2 Magnetite Project
 
Target mineralisation in the order of 8-11mt with a grade of 45-50% Fe. Further infill drilling planned to firm up resource.
 
Testwork conducted by SGS Oretest:
  • Ore is soft and easy to crush and grind.
  • Dry magnetic separation after crushing to P100 of 10mm followed by wet magnetic separation after grinding to P80 of 500 microns and 250 microns to produce a 68.8% and 69.9% Fe magnetite respectively.
  • Premium quality ultra coarse magnetite concentrate.

 Aim to produce 1.9 million mtpa ROM ore producing 1.2mtpa magnetite concentrate.

 If the iron grade can be increased sufficiently it may be possible to ship an intermediate concentrate to an existing plant and avoid the capital and operating cost of grinding and wet magnetic separation.

 Next steps

  • Upgrade the mineralisation so that mine planning can be undertaken.
  • Additional testwork to optimise the flowsheet and determine the effects of finer crushing on iron grade improvements and recoveries.
  • Feasibility study in parallel with the preparation of the necessary approvals for mining and processing.

 Initial investigations suggest that the capital and site operating costs will be significantly less than more conventional magnetite operations.

  

 
ROM Ore
After Dry Magnetic Separation (P100 10mm)
After Wet LIMS
Magnetic Separation
P80 500µm
P80 250µm
Cumulative
Recovery
 
79.0%
63.5%
62.2%
Al
1.0 1%
0.75%
0.43%
0.38%
SiO2
10.91%
6.13%
1.68%
1.18%
Cu
0.02%
0.02%
0.0 1%
0.01%
P
1.430%
0.853%
0.068%
0.033%
S
0.68%
0.55%
0.09%
0.06%
Fe
52.0%
62.4%
68.8%
69.7%

  Phase 2 Testwork Results

 Phase 3 Potential

90% of the potential magnetite horizon identified from detailed aeromagnetics flown in 2007 has barely been drilled.
 
Following ground gravity surveys in the eastern parts of Phase 3 over the aeromagnetic highs, a reconnaissance drilling program aimed at proving up the grades for Phase 3 is in progress.
 
RC drilling on IOCG targets within the Phase 3 area has identified 25-35% Fe grades, but has likely not tested the optimal locations for magnetite.
 
The Phase 3 project aims to identify sufficient resources to be able to plan an expanded mine operation of up to 5mtpa within 3-5 years.