High grade Aurumin iron in WA Mid West triggers JV expansion

Aurumin Limited's scout reverse circulation drilling program – along with re-assays of pulps from earlier third party drilling - has thrown up some high-grade iron hits at its Central Sandstone project in Western Australia’s Mid West region, including a best 10-metre intercept at 62 per cent iron from 1m. 

The 2000m drill campaign on two of Aurumin’s three granted mining leases was part of private company Newcam Mineral’s due diligence before the company exercises its option to enter into a joint venture with Aurumin.

The drilling program focused on high-grade direct shipping ore (DSO) iron in seven priority target areas identified from outcropping-enriched iron formations, backed up by rock chip sample results assaying better than 60 per cent iron.

Aurumin’s targeted resampling program drew from laboratory pulps from a reverse circulation drilling program undertaken by explorer Middle Island Resources in 2019 and 2022. Aurumin’s geologists selected the pulps for re-assay from the original geological logging and a review of the available chip trays.

Analyses from the drilling and pulp re-sampling have returned significant evidence of shallow high grade iron, with five highlights including 10m at 62.12 per cent iron from 1m, 15m at 59.24 per cent iron from 14m, 9m at 60.75 per cent iron from 3m, 8m going 60.42 per cent iron from 10m and 8m assaying 59.93 per cent iron from 10m.   

The evaluation produced encouraging results with low levels of deleterious phosphorous and silica from three of the targets, identifying high-grade iron mineralisation at depths of less than 30m.

The work proves the existence of iron at DSO grades within easily-mineable shallow depths, at low dip angles and over widths of up to 15m downhole, which are almost true thickness.

The program’s favourable outcome indicates potential for shallow, low strip-ratio open pit mining and has encouraged Newcam to extend the joint venture option until October 8.

The companies will also increase the size of the option by 241 square kilometres across 10 additional tenements that are believed to hold iron potential. The additional ground is either granted, awaiting approval or is subject to other acquisition agreements.

The company says the potential joint venture with Newcam could be worth up to $7 million in project funding, would accelerate exploration activity at site and could de-risk Aurumin’s overall Central Sandstone project.

Aurumin and Newcam inked the joint venture deal last October, which gave Newcam an exclusive six-month option to conduct due diligence and earn a 50 per cent interest in the iron rights at Central Sandstone.

Aurumin pocketed a handy $500,000 cash from Newcam upon granting the option and agreed to fund 50 per cent of the on-ground exploration costs before the option expired.

When the option is exercised, Newcam will pay Aurumin a further $500,000 and also provide a loan of up to $5 million to the joint venture to fund production start-up activities, which will be repaid from operating profit.

The deal also provides for Newcam to pay Aurumin an additional $1M success consideration if the joint venture delivers a JORC-compliant mineral resource estimate of more than 3 million tonnes at an average grade of 60 per cent iron. 

Aurumin’s Central Sandstone project, 520 kilometres northeast of Perth, includes three granted mining licences, a 500,000 tonne per year carbon-in-leach gold processing plant that requires refurbishing, a permitted tailings storage facility, bore field and camp facilities.

So far, all of the potentially mineable high-grade iron mineralisation has been identified within the company's granted mining leases which are near major roads.

The combined advantages of its granted mining leases, historical datasets and existing camp and road infrastructure will almost certainly assist the companies to develop a mining operation, facilitate the necessary approvals and reduce the project’s overall development costs and timeline. 

Aurumin Limited’s managing director Daniel Raihani said: “These positive results have been generated from our first iron ore exploration drilling program and demonstrate the potential of the Central Sandstone project for DSO iron ore. The company is very pleased to expand and extend the JV opportunity with Newcam, an ideal partner with which to rapidly commercialise any economic DSO iron ore identified through the proposed JV.”

The outcome of the drilling and sampling program has prompted Aurumin to undertake a more extensive review of its other Sandstone ground for additional DSO iron potential.

Some of Aurumin’s ground outside its mining centre remains in application status and encouragingly, early scout visits have identified surface iron mineralisation as a hematite-enriched banded-iron formation (BIF) and as detrital iron pisolites that could represent immature paleochannels or caps on possible BIF. 

The work has already resulted in an additional five areas being identified which exhibit multiple BIF units subject to deformation. 

Recent field reconnaissance conducted on some of the prospects outside the mining centre has confirmed additional outcropping enriched BIF units. Rock chip sampling across multiple prospects has returned grades of better than 60 per cent iron, while the detrital iron show lower grades around mid-50 per cent iron.

Aurumin’s immediate plans for its iron program at Sandstone include ramping up its field work to conduct prospect mapping and rock chip sampling to unveil new targets for future drilling, from which the company aims to build up its DSO iron resource inventory to the point where it will sustain a full-on iron operation.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au