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Dragon Energy In Funding Discussions For Pilbara Iron Feasibility Studies

Dragon Energy (ASX: DLE) is working to advance the development of its flagship Pilbara Iron Project in Western Australia and has been pursuing multiple avenues of potential funding.

The company has been engaged in numerous discussions regarding funding to support the next stage of feasibility studies for the project, as well as aggressive exploration programs on its other projects.

The Pilbara Iron Project is Dragon's most advanced project and is potentially the Pilbara region's next producing iron ore mine.

The project comprises the Rocklea and Nameless Channel Iron Deposits (NASDAQ:CID) and hosts a JORC Resource of 383.1 million tonnes at 50.94% iron, at a 45% cut-off, which includes a higher grade component of 263.6 million tonnes at 52.6% iron using a 50% cut-off.

At the Rocklea deposit, which is located 9 kilometres south of Rio Tinto's (ASX: RIO) Turner Syncline deposits, Dragon completed a Subterranean Fauna study and a Road Concept Study during the March quarter of 2013.

Negotiations with the native landholders in relation to a mining lease application are well advanced and are expected to be concluded in the current June quarter.

During the quarter, field mapping and rock chip sampling of unexplored topographic rises on E47/1153 identified significant CID capping these plateaus and mesas.

Representative rock chip sampling of the outcropping CID of 2 metres to 35 metres thickness returned results ranging up to 60.01% iron (63.68% calcined iron).

As a result, Dragon subsequently defined a further exploration target of 6.02 to 8.82 million tonnes at 54% to 59% iron (59% to 65% calcined iron).

Drilling in these areas may follow Dragon's planned feasibility studies

Following the confirmation of a viable transport solution for the project, the next phase of developmental activity will be the completion of the project's feasibility studies.

This will include the design of geotechnical, hydrogeological and metallurgical drilling programs, followed by metallurgical and soil studies as well as design and engineering for mine site and transport operations.

Meanwhile, at the Nameless deposit, during the March quarter Dragon undertook a field environmental audit of the 2012 drill sites and access tracks.

Dragon completed infill drilling of a 12.5 kilometre strike of a 200 to 600 metre wide palaeochannel in 2012.

This drilling defined a maiden JORC Inferred Resource of 159 million tonnes at 49.43% iron (53.85% calcined iron), at a 45% cut-off, including 81 million tonnes at 52.39% iron (57.08% calcined iron), at a 50% cut-off.

To the west of the Resource a further 2.5 kilometres of palaeochannel remains to be drill tested, with iron rock chip samples in this area up to 60.36%.

This area will be tested after a mining lease is granted.

Dragon currently has nine projects located in the Pilbara and Midwest regions of Western Australia comprising 32 tenements, including 6 applications, and covering 1,706 square kilometres.

The primary exploration target is iron ore, with the potential for manganese, gold, base metals and uranium.

Dragon had a cash balance of about $3.19 million at the end of March 2013.

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