Yalgoo Iron Ore Project
Yalgoo Iron Ore Project (“YIOP”) is centrally placed within Western Australia’s emerging Mid West Iron Ore Province approximately 80 kilometres north of the world class Gindalbie Metals Ltd’s Karara Iron Ore Project. The YIOP’s area consisting of seven exploration licences totaling 208 km2 covers Yilgarn Craton Archean Banded Iron Formation (BIF) units comparable to those hosting the Karara’s Iron Ore Project magnetite and DSO resources to the south of the project area (Refer Figure 1).
The YIOP area hosts a number of hermatute and magnetite depsoits. The Bilberatha Hill magnetite BIF deposit is the main ore body for the YIOP.
The YIOP is a 50:50 Joint Venture between Venus Metals and HD Mining & Investment Pty Ltd (“HD Mining”), a wholly subsidiary of Shandong Provincial Bureau of Geology & Mineral Resources (“SDGM”) based in Jinan, PR of China. SDGM is a Chinese Provincial government entity which was founded in 1958 now employing almost 14,000 staff and made up of 21 institutes in the Shandong Province. It has the primary responsibility of undertaking and managing all the exploration of resources throughout the Shandong province which includes in excess of 150 gold mines and at least 11 super large gold deposits containing approximately 45 billion ounces of gold reserves, 3.6 billion tonnes of iron ore and an estimate 50 billion tonnes of coal, amongst other minerals. It has 4,000 geological projects completed each year and the Bureau has created a potential value of 10 trillion Yuan for China.
The location of drilled holes is shown in Figure 2.
The Company commissioned geological consultants Widenbar and Associates (“WAA”) in 2010 after the completion of Phase 1 drilling to produce a preliminary JORC compliant resource estimate for Bilberatha Hill. WAA estimated JORC compliant Inferred Magnetite Mineral Resource of 443.9 Mt (ASX Release on 16 December 2010).
The resource model has been updated (ASX Release on 26 August 2011) with newly interpreted mineralised zones (known as Additional Zones) to the North-East, North-West and South of the main Bilberatha zone. In addition, part of the main Bilberatha mineralised zone has been upgraded to Indicated status. A JORC compliant total Magnetite Mineral Resource of 698 Mt grading at 29.3%; (Indicated Resource of 311 Mt grading at 30.7% Fe and an Inferred Resource of 387 Mt grading at 28% Fe) was estimated for the YIOP (ASX Release on 26 August 2011). The Indicated and Inferred Resources are summarised in Table1 below:
Table 1 – JORC Inferred and Indicated Total Mineral Resources Summary
A long section through Banded Iron Formations (BIF) at Bilberatha Hill and an updated BIF Resource Limits are shown in Figure 3 and Figure 4 respectively.
In March 2011, ProMet Engineers Pty Ltd (“ProMet”) was commissioned by the Company to conduct a Pre-Feasibility Study (”PFS”) for the YIOP. This follows on from a Scoping Study undertaken by Mineral Engineering Technical Services completed in February 2011 that gave very encouraging results. ProMet completed the PFS returning a robust project that supports a 7.5Mtpa high grade magnetite concentrate grading greater than 68% Fe for export with an NPV of A$2.14b, pre-tax IRR of 37% (100% equity, no debt) and mine life in excess of 17 years assuming a purpose built slurry pipeline to the proposed Oakajee port facility. The Mining Report produced by Intermine Engineering Consultants estimates total economic magnetite concentrate production at 129.4 Mt based on 385 Mt of plant feed at 30.1% Fe with an average mass recovery of 34.3%.
A Mining Lease Application (MLA 59/742) has been submitted to the Department of Mines and Petroleum covering Bilberatha Hill and additional magnetite mineral resource areas within the tenement E59/1508-I.
Preliminary environmental impact assessment surveys (Flora, Fauna and Hydrogeology) were also completed as part of PFS. There were no matters listed under the provisions of the Environment Protection and Biodiversity Conservation Act 1999 (the “EPBC Act”) that were considered to be relevant to the project area. Based on this, there are not considered to be any flora and vegetation issues that would require referral for assessment under the provisions of the EPBC Act. There are no Threatened (Declared Rare) Flora listed in the Department of Environment and Conservation (“DEC”) database search results for the survey area and surrounds. No conservation significant vertebrate fauna were assessed as being significantly impacted by the proposed development and operation of a mine in the project area.
Venus is currently focusing on commercialisation strategies of YIOP and identifying further drilling target areas to increase the iron ore resource.