Sydney-based IC2 Global Limited has shifted sights from the telco product arena to agree to farm into an iron ore project held by one of Vladimir Nikolaenko's private company's near Mount Magnet in Western Australia.
Sydney-based IC2 Global Limited has shifted sights from the telco product arena to agree to farm into an iron ore project held by one of Vladimir Nikolaenko's private company's near Mount Magnet in Western Australia.
The project is in the vicinity of similar magnetite deposits currently being mined or developed. The project also has potential for deposits of gold and vanadium.
The deal is with Mutual Holding Pty Ltd, a company which ASIC records show is owned by Mr Nikolaenko, the former managing director of Reefton Mining NL.
FARM IN
The farm in is structured in three phases.
Phase One
IC2 pays $20,000 towards reimbursement of expenditure incurred to date by the applicant, Mutual Holding Pty Ltd (Mutual), on Exploration Licence Application E57/550 together with any ongoing costs of finalising the application.
Phase Two
Once the application is granted, IC2 is required to pay $80,000 towards reimbursement of expenditure to date and has a twelve month period in which to plan a pre-feasibility study and conduct an initial drilling programme. The first year minimum expenditure requirement is $53,000. The application is expected to take six months to be granted.
Phase Three
Subject to the successful completion of phase two IC2 has the option to earn 100% of the project by having completed the following steps:
1. Pay $150,000 in order to enter into a further period of two years to earn its interest;
2. Complete its Phase Two requirements;
3. Establish a minimum 50,000,000 tonne JORC compliant inferred resource of iron ore,
vanadium and or gold;
4. Within the further period of two years, complete the pre-feasibility study;
5. Pay non-refundable advances against royalties as follows:
a. In respect to resources of vanadium and iron ore, IC2 must pay Mutual:
i. Inferred resource - $0.02 per tonne of ore;
ii. Indicated resource - $0.04 per tonne of ore;
iii.Measured resource - $0.06 per tonne of ore;
b. In respect to gold, IC2 and must pay Mutual:
i. Inferred resource - $0.20 per tonne of ore;
ii. Indicated resource - $0.30 per tonne of ore; and
iii.Measured resource - $0.50 per tonne of ore.
6. Pay a royalty of 2.25% of Gross Revenue following the commencement of
production.
NATURE OF AGREEMENT
IC2 has the option to terminate its obligations at any time during the farm in agreement at which time the project reverts to the applicant, Mutual Holdings Pty Ltd. IC2 plans to use the option period to assess both the potential of the ore body and the most appropriate way for IC2 to advance the project and deliver value to IC2 shareholders.
THE FULL MEDIA RELEASE APPEARS BELOW.
IC2 Global Limited
AGREEMENT TO FARM INTO THE VICTORY BORE
IRON ORE PROJECT IN WESTERN AUSTRALIA
IC2 Global Limited is pleased to announce that it has entered an option agreement to farm into a substantial magnetite (iron ore) project located approximately 600 kilometres northeast of Perth and 100 kilometres southeast of Mt. Magnet. The project lies within the East Murchison Mineral Field of Western Australia. It is in the vicinity of similar magnetite deposits currently being mined or developed. The project also has potential for deposits of gold and vanadium.
PROJECT HIGHLIGHTS
IRON ORE
With the extensive continuous magnetite rich horizons being within a 100 metre wide
band, each having a true thickness in excess of 30 metres and strike length of 11
kilometres, there is potential for a resource suitable to support a large mining
operation for many years.
The samples from previous completed drill holes were processed to produce
magnetite concentrate samples of 1 metre each prior to analysis for iron. The drill
intersections returned up to:
48 metres averaging 53.7% magnetite containing 56% Fe2O3.
Two drill holes completed on an eastern magnetic zone returned up to;
49 metres grading 43.08% magnetite containing 56% Fe2O3.
A third drill hole tested an adjacent parallel overlapping magnetic anomaly located
100 metres to the west. This hole returned;
49 metres grading 48.5% magnetite containing 56% Fe2O3.
An important feature of the project is that it is traversed by a potential cost
effective gas power source (Mid West Gas Pipeline - Geraldton to North Eastern
Goldfields).
GOLD MINERALISATION
RAB drilling of shallow mineralisation returned up to: -
8 metres grading 10.24 g/t Au from 20 metres depth downhole.
Primary gold mineralisation was intersected in two deeper Reverse Circulation
(RC) holes returning: -
4 metres grading 3.51 g/t Au from 52 metres depth downhole.
6 metres grading 5.20 g/t Au from 59 metres depth downhole.
OTHER FEATURES
In addition, the magnetite horizon contains high levels of vanadium (averaging
up to 34 metres of 0.5% V2O5), a sought after iron strengthening additive. The
developing world class Windimurra Vanadium Mine is located 30 kilometres to
the west and based on a resource grading 0.489% V2O5.
This magnetite project is attractive, in that, in addition to substantial rises in the
price of iron pellets due to the greatly increased demand from Asian steel makers,
magnetite pellets carry a price premium and other projects in the region attest to
the potential viability and market support.
Gold exploration work may determine a resource suitable for treatment in the
gold mining town of Sandstone located 45 kilometres to the northeast.
DETAILS OF THE VICTORY BORE IRON ORE PROJECT
ELA 57/550
Introduction
The Victory Bore Iron Ore Project lies within the East Murchison Mineral Field of Western Australia, and is centered approximately 600 kilometres northeast of Perth and 100 kilometres southeast of Mt. Magnet. Other iron ore projects in the region are shown on the attached diagram and include:
Mt Gibson Iron Limited: Mining 2,000,000 tonnes per annum (tpa) currently and
conducting a feasibility study to increase to 3,000,000 tpa. The oxidised
hematite/magnetite ore being mined is direct shipping grade and trucked to
Geraldton. The proposed increase is to transport primary magnetite ore to Geraldton
by slurry pipe for 365km.
Gindalbie Iron Ltd: Scheduling of shipments is proposed to begin in 2009 subject
to the completion of a feasibility study. Previous owner Western Mining Corporation
conducted preliminary feasibility studies on building a slurry pipe to transport
4,000,000 tpa based on a resource of 200,000,000t grading 35% Fe.
Ferrowest Pty Ltd: The company is considering establishing a iron nugget plant at
Yalgoo based on mining 2,400,000 tpa grading 32% magnetite. The plant would
utilise the Natural Gas Pipeline at Yalgoo and use coal to produce 500,000 tpa of iron
nuggets.
Murchison Metals Ltd: The Company is considering establishing a 1,200,000 tpa
production from the Jack Hills Project.
Midwest Corporation Limited The company is considering a 1,000,000 tpa
production from the Koolanooka Project.
TENEMENT STATUS AND INFRASTRUCTURE
The Project consists of an Exploration Licence Application, numbered ELA 57/550, covering an area of 53 graticular blocks (approximately 160 km2).
The project area is located between the gold mining centres of Sandstone and Youanmi and is 450 kilometres east of the regional port of Geraldton where transport of iron ore concentrate is already taking place.
A feature of the project is that it will be traversed by a potential cost effective gas power
source (Geraldton to Northeastern Goldfields Gas Pipeline (Figure 1)).
The licence is on the expedited list for granting and a standard Heritage Agreement has been submitted to the relevant Native Title claimant group in accordance Western Australia policy for the granting of exploration title pursuant to the expedited procedure. The application has been advertised and is expected to be granted, provided no objection is received from another Native Title group.
IMPROVED IRON ORE MARKET CONDITIONS
Iron can occur as oxides, carbonates, sulfides and silicates. Commercially, oxides are more important. The main minerals that contain iron are:
Magnetite: Fe3O4, with maximum 72,4% of iron content.
Hematite: Fe2O3, with maximum 69,9% of iron content.
Magnetite, housing the largest percentage of iron, now carries a price premium due to its
usefulness as a blending ore for blast furnace charging. There has also been a substantial rise in the price of pellets. Australian iron ore export prices have more than doubled in recent years due to the greatly increased demand from Asian steel makers.
DETAILED GEOLOGY
The ELA covers approximately 11 kilometres strike length of the regional scale Youanmi
Fault Zone. It also covers a significant portion of a major aeromagnetic anomaly that occurs over a magnetite sequence within the Atley Layered Intrusive Complex.
The symmetrical shapes of the anomalies indicates vertically dipping magnetite layers, and the core angles recorded of layered material in the 45 degree angled drill holes confirm the vertical dip. The pattern of magnetite mineralisation is in rhythmic layers, each about 10m core length. At the top (east side) of the layer, the magnetite is fine grained and sparse, and gradually becoming coarse and more abundant, and by the last 1.0 to 1.5m of the 10m section, is virtually massive. The minor sulphide occurrence tends to follow the magnetite, with sparse pyrite and pyrrhotite accompanying the fine grained magnetite. The sulphides become more abundant and varied in the bottom massive section of each layer, where more abundant pyrrhotite and some chalcopyrite isdeveloped. Violarite was detected in two polished specimens from Hole UD2, and accounts for the nickel content noted. Potential for both nickel sulphide, and /or platinum group mineralisation exists.
The occurrence fits the classic gravity settling and accumulation of the heavier mineral
crystals from a slow cooling basaltic magma.
Drilling Of The Magnetite Horizon
Following a detailed ground magnetic survey of the magnetite deposit in 1981 by a previous owner, three diamond drill holes (inclined at a shallow 45 degrees) were completed on two anomalous magnetic zones.
Each of the three holes traversed the anomalous zones in the fresh rock from an average depth of 50m below the surface. Each hole showed a substantial width of disseminated magnetite, with minor massive mineralisation. Hole UD1 and UD2 were on the eastern anomaly, while hole UD3 tested a parallel central anomaly with some minor breaks, this central anomaly being located some 100m to the west of the eastern anomaly. This configuration would allow a reduced waste to ore ratio due to the proximity of the two layers. The two drill holes on an eastern magnetic anomaly returning:
49 metres grading 43.08% magnetite
(34.4% Fe2O3 or 24.04% iron (Fe), from 51 metres depth (Hole
UD1),
48 metres grading 53.70% magnetite
(25.04% Fe2O3 or 17.51% Fe, from 49 metres depth (Hole UD2)
The third hole tested an adjacent overlapping parallel magnetic anomaly. The two anomalies are about 100 metres apart. The third hole returned:
49 metres grading 48.5% magnetite
(32.42%Fe2O3 or 22.67% Fe, from 53 metres depth (Hole UD3)
The average grades for the three holes including vanadium V2O5(given in core length) are as follows:
Line Hole No. Interval Width Magnetite V2O5
(m) (m) Content % %
48N UD1 51-100 49 m 43.08 0.45
54N UD2 49-103 48 m 53.70 0.35
excludes 90-96 6 m
42N UD3 53-106 34 m 48.50 0.50
excludes 87-91 3 m
WORK COMPLETED ON ELA 57/550 IN RELATION TO GOLD
MINERALISATION
Battle Mountain (Australia) Inc under a joint venture with Gindalbie Gold NL explored the
area from 1995 to 1999, principally on the Victory Bore, Paddy's Well and Atley Regional
Prospects (Figure 1).
At Victory Bore RAB drilling (337 holes) were completed for 10,789 metres. Supergene
mineralisation in saprolite returned up to 8 metres grading 10.24 g/t Au from 20 metres
depth downhole.
Primary gold mineralisation was intersected in two deeper RC holes (total of 27 holes for
2263 metres) returning up to 4 metres grading 3.51 g/t Au from 52 metres depth downhole and 6 metres grading 5.20 g/t Au from 59 metres depth downhole.
These holes were spaced 200 metres apart and appear to have intersected the same
mineralised horizon; a west dipping coarse grained gabbro with silica and carbonate
mineralisation. The mineralisation extends at least a further 200 metres to the south.
FARM IN
The farm in is structured in three phases.
Phase One
IC2 pays $20,000 towards reimbursement of expenditure incurred to date by the applicant, Mutual Holding Pty Ltd (Mutual), on Exploration Licence Application E57/550 together with any ongoing costs of finalising the application.
Phase Two
Once the application is granted, IC2 is required to pay $80,000 towards reimbursement of expenditure to date and has a twelve month period in which to plan a pre-feasibility study and conduct an initial drilling programme. The first year minimum expenditure requirement is $53,000. The application is expected to take six months to be granted.
Phase Three
Subject to the successful completion of phase two IC2 has the option to earn 100% of the project by having completed the following steps:
1. Pay $150,000 in order to enter into a further period of two years to earn its interest;
2. Complete its Phase Two requirements;
3. Establish a minimum 50,000,000 tonne JORC compliant inferred resource of iron ore,
vanadium and or gold;
4. Within the further period of two years, complete the pre-feasibility study;
5. Pay non-refundable advances against royalties as follows:
a. In respect to resources of vanadium and iron ore, IC2 must pay Mutual:
i. Inferred resource - $0.02 per tonne of ore;
ii. Indicated resource - $0.04 per tonne of ore;
iii.Measured resource - $0.06 per tonne of ore;
b. In respect to gold, IC2 and must pay Mutual:
i. Inferred resource - $0.20 per tonne of ore;
ii. Indicated resource - $0.30 per tonne of ore; and
iii.Measured resource - $0.50 per tonne of ore.
6. Pay a royalty of 2.25% of Gross Revenue following the commencement of
production.
NATURE OF AGREEMENT
IC2 has the option to terminate its obligations at any time during the farm in agreement at which time the project reverts to the applicant, Mutual Holdings Pty Ltd. IC2 plans to use the option period to assess both the potential of the ore body and the most appropriate way for IC2 to advance the project and deliver value to IC2 shareholders.
FIGURE 1 - E57/550 AND SURROUNDING AREA
Signed
Rodger Johnston
Chief Executive Officer
This report accurately reflects information compiled by Mr. G.R. Hemming, MAusIMM., MAIG., a Director of
Roscoria Pty Ltd, who is a competent person as defined by the Australasian Code for Reporting of Identified
Minerals Resources and Ore Reserves and accurately reflects the information compiled by the competent person.
For further information please contact:
Rodger Johnston CEO IC2 Global Limited +61 (0)2 9805 4300
