Magnetite Range Project (Accent 100%)

The 100% owned Magnetite range project centred on the Great Northern Highway is located 300 km northeast of Perth in the Yalgoo Mineral Field. It consists of granted mining lease M59/166, one granted exploration licence E59/875 and three exploration licence applications ELA59/1613, 1662 - 1663 with a combined area of 153 square km.

M59/166, E59/875, ELA59/1613, 1662-1663 are located immediately north and along strike of Mt Gibson Iron Ltd / Asia Iron Holdings Extension Hill project. This is a major proposed mine development with dual ownership structure. The near surface hematite rights are held by Mt Gibson Iron whilst the magnetite rights are held by Extension Hill Pty Ltd (EHPL), a wholly owned subsidiary of Hong Kong based Asia Iron Holdings Ltd (60% Chongqing Chonggang Minerals Development Investment (CCMD) / 40% Sinom Investments (SINOM).

Mt Gibson commenced mine construction of the separate DSO project in Q1- 2010 for completion by Q2-2011. The EHPL Extension Hill magnetite project is the most advanced magnetite development in the mid west with a large tonnage and high grade resource. State and Federal Approvals and Permitting are largely all in place for the proposed Stage 1 10Mtpa concentrate production. The announcement of this large magnetite project development is considered to be imminent.

Highlights

The company released a maiden JORC resource estimate of 391Mt @ 30%Fe (DTR 67%Fe, 30.8% Mass Recovery) announced in February 2010. The Mineral Resource occurs within an extensive Banded Iron Formation (BIF) and is based on more than 19,000m of RC and diamond drilling. More than 70% of the Resource is in the Indicated category. The majority of this resource is a high quality, low sulphur magnetite iron ore. Significant amounts of metallurgical testwork and process engineering studies have demonstrated that a clean, saleable magnetite concentrate can be produced with relatively low energy requirements and good mass recoveries. The Julia prospect ore in particular is characterized by coarse liberation of magnetite at a coarse grind size of P80 = 75 micron and P80 = 45 micron.    

The total Inferred and Indicated resource is considered sufficient for a conceptual mine life of 20 years at 5Mtpa concentrate output.

Metallurgical testwork continues to assess the processing characteristics of the higher sulphur and moderate silica material in the Hematite Hill prospect area. Sighter testwork has indicated that silica specification of <5% SiO2 can be achieved with finer grinding to <25 micron which is similar to other magnetite deposits.