Perth-based iron ore hopeful Australasian Resources Ltd managing director Darren Hedley has called on shareholders to be patient as negotiations continued over long-term project development options.
Perth-based iron ore hopeful Australasian Resources Ltd managing director Darren Hedley has called on shareholders to be patient as negotiations continued over long-term project development options.
The full text of a company announcement is pasted below
Market update
- Resource at Balmoral South Iron Ore Project increased to 1.11 billion tonnes
- Solid progress on short and long-term funding options
Australasian Resources Ltd is pleased to announce a resource upgrade at the Susan Palmer deposit within its Balmoral South project to 1.11 billion tonnes.
The upgrade of the resource estimate is a key milestone for Australasian. No further extensional drilling is required and, based on current indications, the 1 billion tonne mineable reserve target will most likely be achieved from this already defined resource.
An increase to the ore reserve estimate is being completed and this will further underwrite the technical and financial viability of the project.
The resource estimate has been updated on the back of the results of geological interpretation based on geological logging of 31 drill holes, modelling of the Banded Iron Formation (BIF), geophysical surveys (gamma and magnetic susceptibility), chemical assay and Davis Tube Recovery test results.
As shown below, Davis Tube test results continue to demonstrate that a high quality concentrate can be produced from the Balmoral South magnetite mineralisation. The quality presented below is consistent with previous resource estimates.
Results of a further 10 drill holes completed in the latter part of 2006, which are primarily infill drilling holes, are expected to increase the confidence levels and the conversion to reserves.
Funding
Negotiations are still ongoing with several large consortiums over long-term project development options.
In parallel, good progress has been made with respect to short-term financing options with various parties, and the company is evaluating these options. It is expected that this short-term funding, if required, will be an interim step prior to the conclusion of the long-term partnering arrangements. Managing Director Darren Hedley said any serious amount of funding was difficult to put into place until the transfer of the Balmoral asset was completed, which only occurred on 12 January 2007.
He called on shareholders to remain patient, saying the project was a long term, 25-year project requiring significant funding.
"The company is mindful of ensuring any funding put into place maximises value for shareholders - any decision of this magnitude cannot be taken lightly," Mr Hedley said.
"We are giving all viable options our full consideration to ensure we make the best decision for our shareholders."
Australasian will be updating the market on the progress of its funding negotiations as news comes to hand.
