Shares in Murchison Metals have surged as the company flags the potential to increase the scope of its Mid West iron ore operation after setting an additional exploration target of up to 1 billion tonnes.
The company, through its 50 per cent owned subsidiary Crossland Resources, is currently carrying out a $23 million, nine month exploration program at its Jack Hills project.
The program, which started in April this year, aims to drill around 70,000 metres on completion and early results indicate the project could be substantially larger than previously recognised.
Murchison said the program is targeting an additional 400 million tonnes to 1 billion tonnes of primarily beneficiation feed, which includes a component of direct shipping ore.
"If fully realised, the additional exploration target tonnages would lift the project size to between 1.5-2.1 billion tonnes, with further prospective targets to be tested in future drilling campaigns," Murchison said in a statement.
"Based on the latest drilling results from Crosslands, Murchison believes the expanded Jack Hills mine has the potential to be a large scale, multi-decade project yielding substantial cash flows and economic value."
Japanese company Mitsubishi own the other half of Crosslands.
Murchison chairman Paul Kopejtka added the additional tonnages further underlines the importance of the Oakajee deepwater port, which subsidiary Oakajee Port and Rail is currently progressing.
Currently, Jack Hills has a resource of 1.087 billion tonnes of both beneficiation feed ore and direct shipping ore.
Shares in Murchison surged 11 per cent to a high of $1.98 before settling at $1.93 at 11:28 AEST.
