Image Resources (ASX: IMA) has received a strong boost to Boonanarring mineral sands project with drill sample assays confirming that a high grade Valuable Heavy Mineral (VHM) strand extends over a strike length of 7.9 kilometres.
Results from a 198 hole aircore program completed in September 2012 on Block C of the Boonanarring project confirmed the VHM strand extends over the full 3.3 kilometres of Block C between Block B and Block D, bringing the total length up to 7.9 kilometres.
Notable intersections at the 2.5% HM cut-off include 14 metres at 27.62% HM and 8 metres at 32.35 HM.
"We are very encouraged to see the earlier visual estimates from the drilling carried out last year confirmed in these assay results," managing director Peter Davies said.
"These results reinforce our earlier confidence derived from the ground magnetometer results, that the unusually high grade strandlines at Boonanarring are continuous over the full 12 km strike length."
Image is targeting the end of this month to release the maiden JORC Indicated Resource for Block C. Drilling with two rigs of the 2.2 kilometres northern extension in Block A is currently in progress.
All aspects of the Feasibility and environmental studies are on schedule for completion before end July 2013.
Block C mineralisation
The mineralisation on Block C occurs in two strands, with the eastern strand drilled to sufficient density to enable a JORC Indicated Resource to be estimated.
The tenor of mineralisation in the western strand has increased in comparison with Block B.
Image plans to infill drill this strand to 200 metre spacing during March 2013 to support a JORC Indicated Resource.
Visual estimates of the mineral content, undertaken by experienced mineral observers, confirm the unusually high Zircon content of the mineralisation continues from Block B into Block C.
Full mineral assemblage work is being commissioned to quantify the mineralogy and will be used in the maiden JORC Resource.
Block B has an Indicated Resource of 7.4 million tonnes at 7% HM, containing 520,000 tonnes of HM at a 2.5% HM while Block D has a Measured Resource of 3.1Mt at 7.2% HM containing 221,000 tonnes of HM based on drilling and mineralogical data supplied by Iluka Resources (ASX: ILU).
Total resources are 10.5 million tonnes at 7% for 740,000 tonnes of HM at a 2.5% cut-off.
Corporate and non-core update
Image is well funded to progress all planned activities through to completion of the Feasibility Study with working capital as of 31 December 2012 of A$6.82 million.
It also has the potential to reduce costs and raise additional funds through the rationalisation or divestment of tenements outside the North Perth Basin.
Discussions have been entered with other resource companies regarding transfer or joint venture of these assets.
The confirmation that the VHM strand stretches from Block B to Block D increases the likelihood that Image Resources could well meet its target mining inventory over a 12.5 kilometre strike length of 15Mt to 25Mt of high grade mineralisation.
This will in turn contribute to a longer mine life for the project, which is planned as a 3.3 million tonne per annum single mine and wet plant operation at Boonanarring with production to commence in 2014.
This, along with Boonanarring's other advantages, which include established road and rail logistics, several multi user ports in the region, as well as proximity to existing mineral separation and SR plants, presents investors with the opportunity to gain exposure to a strategically located, high grade mineral sands project at Image's current share price of A$0.185.
Image's current share price and valuation of around $25 million is on offer as it is currently under the radar of most investors. This will not always be the case as Image moves closer to production status from explorer in the lead up to 2014 and it is re-rated befitting a producer status and growing cash flows.
Also notable is that while the Boonanarring project has profitable financial metrics, it is just part of Image's portfolio of other significant deposits in Western Australia.
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