Syrah Resources (ASX: SYR) has outlined an exploration target of 5 to 10 million tonnes at 4 to 6% heavy minerals for its Fungoni mineral sands prospect in Tanzania following 8,800 metres of aircore drilling.
Importantly, this drilling has defined a small, high grade, zircon-rich deposit, with strong potential evident for similar deposits in the immediate Fungoni area.
The representative assemblage of heavy minerals at Fungoni is exceptional with 25% zircon, 5% rutile and 44% ilmenite based on previous drilling.
Syrah drilled 294 holes which delivered highlight intercepts of 10 metres at 12.7% heavy minerals, 8 metres at 16.3% heavy minerals, 16 metres at 9.4% heavy minerals, 20 metres at 6.6% heavy minerals, and 12 metres at 6.7% heavy minerals.
In a 900 metre long zone, the Fungoni deposit is up to 20 metres thick and over 400 metres wide.
The Fungoni deposit is shallow and high grade, particularly in the central part.
There is a suggestion of a second, deeper, lower grade zone slightly to the west which has the potential to double the size of the Fungoni deposit, albeit at a lower grade.
Heavy mineral assemblage
A large selection of samples from the recent drill program is currently undergoing assessment of composition.
Magnetic separation has been completed and both chemical analysis and further physical separation are now being completed.
Preliminary results show that the non-magnetic portion of the heavy minerals, which contains all of the zircon and the rutile, averages 39% across the deposit, suggesting that zircon and rutile assemblages may on average be even better than estimated.
High tonnage potential
On Syrah's northern Tanzanian mineral sands tenement block, a 4,584 kilometre aeromagnetic survey and reconnaissance field work confirmed there are extensive medium to high grade heavy mineral accumulations.
These accumulations have high tonnage potential particularly in the zone from South Tanga to Tajiri - a distance of 60 kilometres.
The northern mineralisation is dominated by ilmenite (70-80%) with up to 20% rutile plus zircon in the assemblage.
The main area of focus for Syrah in this northern tenement package has been the four licences south of Tanga.
Three licences contain several zones that have been interpreted to be >3% heavy minerals from surface sampling, some exploration pits and some limited hand auger drilling.
Of these anomalous zones, only Tajiri has been seriously followed up with further auger drilling.
Some impressive mineralisation was intersected at Tajiri in this past drilling program, including 14 metres containing 9.2% heavy minerals and 9 metres containing 12.3% heavy minerals.
Activity by Syrah in this area has included an aeromagnetic survey covering the South Tanga, Tongani, Kimanga and Tajiri licences, and a field examination of the area.
Both the magnetics and the field examination were aimed at testing the accuracy of this map which indicates that the lower grade halo of the mineralisation is continuous over a 60 kilometre strike length with a width of up to 5 kilometres.
The magnetic survey was also aimed at identifying new target areas, while a second objective of the field examination was to test the mineral assemblage along the entire strike of the mineralisation.
Syrah has a 100% interest in an extensive package of mineral sands tenements along the Tanzanian coastline which cover most of the country's known occurrences of mineral sands.
The eastern coast of Africa is well known for world class mineral sands deposits, with deposits being mined in South Africa, Madagascar and Mozambique to the south, and Kenya to the north of Tanzania.
Syrah's tenements include a package in northern Tanzania that covers almost 100 kilometres of prospective stratigraphy, starting just south of Base Resources' (ASX: BSE) Kwale mineral sand development in Kenya, and a central package located north and south of Dar es Salaam in central coastal Tanzania.
Mineral sands exploration
A follow up program of the prospective areas of the Fungoni area and the northern tenement block is now being planned. This will involve surface sampling and further drilling.
Divesting non-Balama assets
To allow Syrah to focus on its world class Balama Graphite and Vanadium Project in northern Mozambique, the company is considering divesting its non-Balama assets.
These assets, including the Tanzanian Mineral Sands Project, would be spun out into a separate company that would be listed on the ASX.
Syrah's mineral sands projects cover some of the most prospective mineral sands occurrences along the eastern coast of Africa.
Recent drilling has defined a small, high grade, zircon-rich deposit at Fungoni, with strong potential for a collection of similar deposits nearby.
Additionally, the representative assemblage of heavy minerals at Fungoni is exceptional with 25% zircon, 5% rutile and 44% ilmenite based on previous drilling.
This is also true for the 60 kilometre long prospective zone from South Tanga to Tajiri, which is dominated by ilmenite (70-80%) with up to 20% rutile plus zircon in the assemblage. This zone also offers high tonnage potential.
Syrah has the opportunity to spin these valuable heavy mineral assets into a separate ASX-listed vehicle, which will not only allow the company to focus solely on its world class Balama Graphite and Vanadium Project, but also attract separate investment to help realise the value of these assets.
The company remains well-funded with around A$12.9 million in cash at the end of December 2012.
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