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IRON ORE HOLDINGS LIMITED

ASX: IOH

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Description

Iron Ore Holdings Ltd (IOH) was first established in December 2003 and successfully listed on the ASX in May 2005. During the past several years IOH has progressed its strategy of proving up commercial quantities of Direct Shipping Ore (DSO) on its tenements in the Pilbara region of Western Australia.

A major new discovery of 160 Million Tonnes (JORC) of Brockman-style DSO (59%Fe) at the Iron Valley Project was announced during 2009. Iron Valley is bordered by Rio Tinto, BHP and FMG in the Central Pilbara region and is situated within close proximity to existing infrastructure. Further drilling is being undertaken and a Scoping Study has commenced.

Commercial quantities of iron ore were identified at the Phil’s Creek Project following a drilling campaign completed in January 2007. The Phil’s Creek Project is situated only five kilometres from Rio Tinto HI Yandicoogina mine. In July 2008 the Company entered into a Memorandum of Understanding (MOU) with Rio Tinto for an annual Mine Gate Sale (MGS) of up to 1.5 million tonnes of DSO pisolite from the Phil’s Creek Project.

A Definitive Engineering Study (DES) has been completed and, subject to the necessary Government and regulatory approvals IOH is on track for mining to commence at Phil’s Creek by the second half of 2010. A formal ore sales agreement is to be negotiated with Rio Tinto prior to commencement.

The company’s strategy is to continue to explore, prove up and mine commercial quantities of DSO on its tenements in the most prospective parts of the Pilbara region, adjacent to BHP Billiton’s and Rio Tinto’s Yandi and Yandicoogina mines and also Robe River’s Mesa J mine.

Iron Valley Project

The Iron Valley Deposit is located on the Company’s 100% owned tenement (E47/1385) in the Eastern part of IOH’s Central Pilbara portfolio. This Project is strategically located within close proximity of existing infrastructure, and is bordered by Rio Tinto, Fortescue Metals Group and BHP with nearby existing mines. Iron Ore Holdings first announced a new, high-grade Brockman–style iron ore discovery at Iron Valley in November 2008.

In May 2010, following an intensive drilling campaign, the Iron Valley JORC compliant Resource reached 240Mt @ 58.8% Fe (includes a high grade component of 143.5Mt @ 60.8%). The drilling program had completed 400 holes (47,000m) by May 2010 and the Company is awaiting analysis of assay results for over 120 holes.

Phil’s Creek Project

The Phil’s Creek Project lies within the central portion of the Hamersley Ranges, 5km from Rio Tinto’s HI Yandicoogina Mine and established mine service infrastructure in the Central Pilbara. IOH has entered into an arrangement with Rio Tinto for a sale of delivered product of up to 1.5Mtpa of pisolite iron ore from Phil’s Creek to HI’s Yandicoogina Mine (Ore Sales Agreement).

An Indicated Mineral Resource comprising 15.1Mt at 55.6% Fe, 7.2% SiO2, 4.2% Al2O3, 0.1% P and 8.1% LOI has been estimated (using a 55% Fe cut-off grade). The high-grade DSO component of this resource (above a 55% Fe cut-off) is 9.2Mt @ 58.0% Fe, 5.7% SiO2, 3.1% Al2O3, 0.1% P and 7.5% LOI. A Probable Ore Reserve comprising 7.1Mt @ 58.2% Fe, 5.61% SiO2, 2.89% Al2O3, 0.11% P and 7.49% LOI, has been estimated by applying a 55% Fe cut-off. The conversion rate from Mineral Resource to Ore Reserve was 77%.

The Company has now completed the mining tender process for the project. Since signing the Ore Sales Agreement with Rio Tinto in 2009 iron ore prices have risen, as have capital costs. IOH is reviewing the capital and operating costs, as well as the logistics for the project. The financial model for the project, including its estimated net present value, is currently being updated.

As part of considering the options for mining the Phil’s Creek Project, IOH must consider the impact on overall project returns under the current agreement with Rio Tinto of the recently announced Resource Super Profits Tax (RSPT). IOH has targeted production to begin in the last quarter of 2010. In view of the need to undertake this analysis for the project, the targeted date for commencement of mining operations is likely to be delayed. The Company expects to finalise its updated analysis of the viability of and returns from the MGS during the third quarter of 2010.

Koodaideri South Project—E47/1539, E47/1620, And E47/1644—E47/1648

The Koodaideri South Project is 100%-owned by IOH and is located in close proximity to Rio Tinto and BHP Billiton’s iron ore mining operations in the Yandicoogina area of the Pilbara. An initial reverse circulation (RC) drilling program targeting a number of prospects within the Koodaideri South Project was undertaken during 2009. This drilling campaign comprised 53 holes for 2,038m on 3 newly identified prospects; Hidden Valley, Junction and Fingers. Drilling was designed to test for potential Brockman bedded iron mineralisation at targets identified by IOH geologists during geological mapping and rock chip sampling field programs.

The initial drilling campaign at three newly identified prospects within Koodaideri South Project area resulted in the discovery of high-grade Brockman bedded iron mineralisation at the Fingers Prospect. Fingers Prospect included 11 holes and all eleven holes drilled revealed broad mineralised intersections commencing at or near surface. Results have been encouraging and the Company will return to drilling of this resource during 2010. A maiden Inferred JORC Mineral Resource of 23.4Mt @ 58.5% Fe was identified at Fingers during March of 2010. The Resource is open along strike and in a southerly direction.

Lamb Creek Project—EL 47/1238

Well located within easy reach of existing infrastructure, the Boundary Prospect is contained within IOH’s 100% owned Lamb Creek tenement. In February 2010 IOH announced a JORC Inferred Mineral Resource of 26.7Mt @ 58.36%Fe at Boundary following an initial Reverse Circulation (RC) drilling program. Mineralisation remains open to the east and the Company plans to undertake further drilling in 2010.

The identified resource is 20km to the west of BHP Billiton’s Yandi and 35km from Rio Tinto’s Yandicoogina mining operations. The township of Newman is within 150km by road. The Yandicoogina rail line, owned by Rio Tinto, crosses the Lamb Creek tenement eight kilometres to the north of the resource and runs 6km to thenorthwest.

North Marillana—EL 47/1239

A JORC compliant Indicated Mineral Resource of 46.8 Mt @ 50.0% Fe has been defined at the Extension Project which is located at North Marillana only 15 Kms from Phil’s Creek. Whilst a significant tonnage of CID has been identified within the Extension Project, the material is of a lower grade to the current direct shipping CID Pilbara ore. To address this, the company will be undertaking metallurgical beneficiation test work on the Extension samples to assess the potential to improve the iron grades and remove contaminants using either dry or wet screening.

Additional metallurgical test-work has been carried out to upgrade the previously announced JORC Mineral Resource (46.8Mt @50% Fe). Results from this test work Project indicate a limited opportunity for recovering an acceptable product using a simple screening operation. Alternate benificiation techniques are under review.

Buckland Hills Project —E47/1538 & E08/1554

Buckland Hills is located within close proximity to established infrastructure and is directly adjacent to Mesa J which is a Rio Tinto operated mine. An initial Inferred JORC Mineral Resource of 47.9Mt at 58.05%Fe was announced in February 2010. IOH first announced the discovery of high-grade DSO Channel Iron Deposit (CID) at the Buckland Hills Project on 24 November 2009. This discovery was a result of IOH’s first drill campaign at the project, completed during October 2009. Exploration to date has been on a small section of the tenement and planning is underway for the next campaign of drilling activities to be undertaken at Buckland Hills. As the known mineralisation remains open, further drilling will focus on establishing the continuity of the mineralisation in addition to testing for extensions outside the current resource area.

Other West Pilbara Projects

The Western Pilbara project area consists of the Buckland Hills project (adjacent to the Robe Mesa J operations), and the Maitland River project (approximately 40km south west of Karratha). The Buckland Hills project is prospective for Brockman Iron Formation mineralisation, channel iron deposits and detrital iron deposits. The Maitland River project is prospective for magnetite hosted iron mineralisation. IOH also has an application pending for a tenement at Portland River.

Mine For

iron ore

Location of operation(s)

Western Australia

Address

Level 1, 1 Altona St
WEST PERTH, WA, AUSTRALIA

Phone

(61 8) 9483 2000

Email

Website


Last Updated

1/04/2011

 

The data on Australian Shares.com is intended as a guide only and is provided purely as an indication of what information can be found through official announcements. Data on this website should not be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy. The publisher (Intaanetto Pty Ltd) will not be held liable for any loss arising from the use of this website.