Gindalbie delivers to underpin Karara DSO project
Gindalbie Metals has put in place another important component in the two-stage development strategy for its Karara Iron Ore Project in Western Australia’s Mid West region, with an initial hematite resource to underpin the Stage 1 Direct Shipping Ore (DSO) phase of the project.
The Inferred Resource, contained within the first nine deposits to be covered by Gindalbie’s hematite resource development program at Karara, totals 14.1 million tonnes at 60.6% Fe. This will underpin a multi-pit hematite mining operation, which will form the basis of an initial 3mt/annum DSO export project, with production scheduled to commence in the second quarter of 2008.Gindalbie’s Managing Director, Garret Dixon said the initial hematite resource would underpin the current Definitive Feasibility Study on the Karara Hematite Project, enabling the Stage 1 Project to be fast-tracked through to production in early 2008.“Our business strategy is to bring the Karara Hematite Project on stream as rapidly as possible to generate early cash flow and take advantage of the current strength of the iron ore market and record levels of demand for iron ore,” Mr Dixon said. The Definitive Feasibility Study for the Stage 1 Karara Hematite Project is well advanced with mine design and Gindalbie has scheduled optimisation work to commence in the March 2007 Quarter. The optimisation work will proceed in parallel with the broader development of the Stage 2 Karara Magnetite Project, for which the Definitive Feasibility Study is nearing completion. The initial hematite resource estimate further strengthens Gindalbie’s iron ore resource inventory, following the 75 percent increase in the resource base of the Karara Magnetite Deposit, announced in November last year, to 1.29 billion tonnes grading 36.3 percent Fe. The initial resource estimate, which only incorporates drilling results up to September 2006, was calculated following the completion of more than 29,000m of reverse circulation and diamond drilling within the first nine Karara deposits earmarked for development by Gindalbie. The resource is limited to a depth of 120m below surface in each of the nine deposits.Gindalbie continued drilling at several deposits between October and December 2006, with approximately 10,000m drilled during this period aimed at extending the mineralisation and increasing drill density sufficiently to define Measured and Indicated Resources. Mr Dixon said this initial resource established sufficient critical mass to establish an initial 3mt/annum DSO business, however drilling would be ongoing over the course of this year and beyond to significantly expand the company’s hematite resource inventory.“There is potential to extend the existing deposits and there are numerous new discoveries and other prospects to be tested in the Karara area alone,” Mr Dixon said.