Aurumin has unmasked what it says is a “real” high-grade iron ore discovery with the potential for significant scale at its flagship Sandstone gold project in Western Australia’s Mid West region.
In what appears to be adding a significant double edge to the project within the historic WA mining town of Sandstone, the company has confirmed high-grade rock chip assays up to 67 per cent iron in banded-iron formations within a discontinuous strike of about 6km at the site.
With the bulk of samples going at better than 60 per cent iron, management believes its find has the potential for a direct shipping ore (DSO).
Aurumin considers the size of its discovery to be substantial, with outcrop widths ranging from 5m to 40m in a 1.9km section of the total strike presenting plenty of targets for it to follow up. The high-grade iron ore sits close to multiple existing gold deposits at the 881,000-ounce central Sandstone gold project and importantly, on existing mining leases.
The potential value of the iron ore in conjunction with the gold could significantly alter the project economics for Aurumin, which is already progressing its total 946,000-ounce gold resource towards development. And it comes with a backdrop of a raging gold price that has this week surged to new all-time highs as investors flock to the safe-haven asset with an expectation for United States interest rate cuts. Today’s Australian gold price is sitting at more than $3671 an ounce.
The Sandstone project lies on a well-known haulage road for DSO iron from the Mid West to the port of Geraldton. Fenix Resources, which has a $265 million market cap, has been hauling along the route since 2020 from its flagship Iron Ridge hematite deposit that runs at an incredible 65.1 per cent iron.
High-grade hematite iron attracts a premium price on the seaborne market, as a purer product results in lower emissions at end-user steelworks in China. The demand for high-grade ore has been increasing in recent times, with steelmakers manoeuvring to meet increasingly-strict Chinese government regulations.
Aurumin managing director Brad Valiukas said: “These are great results and represent a real discovery. The close proximity of the iron ore to some of our gold deposits, not to mention the potential value of the iron ore itself, could significantly alter the project economics. We are already spoilt for targets and this adds a big one into the mix.”
The company’s sampling program included some 117 rock chip samples grading up to the maximum of 67 per cent iron. The samples also reported acceptable levels of impurities, defining them as ore-grade.
Multiple lenses were also observed ranging in widths of up to 40m outcropping at surface and dipping moderately to the north. The company’s sampling of hematite outcrop returned frequent high grades with the true width of the mineralisation to remain unknown until drill-testing.
The Sandstone project area lies 520km north-east of Perth and just 495km east of the Geraldton port within WA’s East Murchison goldfield. It contains the estimated mineral resource of 881,000 ounces of gold and is part of Aurumin’s greater Sandstone operations that include its Birrigrin project – a historically high-grade production area of up to 196 grams per tonne gold and 39 mapped shafts.
Adding in the company’s Johnson Range projects, its total gold inventory amounts to the 946,000 ounces.
A cash boost from the sale of the historic Mt Palmer gold mine to Kula Gold and significant divestment of its Mt Dimer tenements last year to Beacon Minerals for a handy $3 million, coupled with a recent $2.5million capital raise, has set the company debt-free.
With a set of recent high-grade gold results at the Sandstone asset, including a bonanza-grade hit going 344g/t for 1m from 43m, Aurumin has a bevy of dual commodity targets to sort through. It will now be interesting to watch how its gold and iron ore strategy unfolds at the increasingly intriguing Sandstone project.
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By Andrew Todd
