Emerging iron ore developer, Nevada Iron (ASX: NVI) just moved closer to arriving as a developer, intersecting some exceptional magnetite mineralisation at Section 5 deposit in Nevada in the U.S. during drilling.
Drill hole 2BB on Line 2 in Section 5 intersected a combined bulk mineralisation of 176.4 metres at 28.1% total iron.
This followed solid drill results during the quarter that included 10.7 metres grading 53% total Fe.
Section 5 and several other deposits are prospects proximal to the proposed processing plant site at Buena Vista. These could potentially provide multiple sources of mineralisation for both increased production and greater operational flexibility during the initial years of mining operations.
The combined bulk mineralisation of 176.4 metres at 28.1% total iron is composed of three significant mineralised intercepts:
- 54.9m at 31.8% total Fe from 30.5m;
- 33.3m at 31.0% total Fe from 102.1m; and
- 88.3m at 24.3% total Fe from 141.3m.
The Section 5 deposit has an Exploration Target of 12-18 Mt grading 18-26% total Fe. Providing the upside, the Project's currently identified JORC Exploration Targets provide for an additional 195 Mt to 268 Mt of exploration potential.
Drilling at the Section 5 deposit has encountered thick magnetite mineralisation in an oval shaped area of some 600 metres E-W by 50 to 400 metres N-S and to depths of 200 metres, where several holes were terminated in strong mineralisation.
The mineralisation, in general, is close to the surface and lies beneath less than 20 metres of cover sediments.
Drill Results - Line 2
Line 2 is located almost on the western extremity of the Section 5 magnetic anomaly and it is interpreted that the mineralisation in the Section 5 deposit is truncated about 50 metres to the west of Line 2 by major faults.
The higher grade mineralisation in hole 2BB trends at about 135 degrees to the east and is intersected on Line 3 in holes 3B (175.3m @ 24.4% total Fe), 3C (175.3m at 25.1% total Fe) & SP17 (44.2m at 31.3% total Fe & 53.3m at 26.6% total Fe).
This very thick, higher grade zone of mineralisation continues through Lines 4 and 5. The high grade zone is approximately 250 metres long x average of 100 metres wide x average of 150 metres thick, which grades over 25% total Fe.
Further east of Line 5 the high grade zone is represented by narrower, more discrete zones of higher grade mineralisation such as in hole 8C, which returned 61.0m at 27.7% total Fe from 6 metres.
A ground magnetic survey also highlights the substantial geophysical targets at the Fisk and Ute prospects.
Based on the geophysical signatures of both these prospects, considerable exploration upside exists at Buena Vista, especially when these signatures are compared to that at the West Deposit which contains a mineral resource of 100.2 Mt at 20.3% total Fe.
Significant potential, therefore, exists to expand the scale of the Project through additional exploration of, in particular, higher grade magnetite mineralisation at these prospects.
Aim of drill program
The recent drill programme was designed to facilitate the project's optimisation plan of:
- increasing Phase 1 plant throughput from 4.8 Mtpa to a minimum of 6.0 Mtpa (and potentially higher);
- scheduling the mining of other deposits, in addition to the West Deposit, in the initial years to increase concentrate production to levels of up to 2.4 Mtpa; and
- investigating the potential to develop a Phase 2 project after a few years of operation, to produce in the order of 4 to 5 Mtpa of concentrate.
A number of assays are still pending for Section 5 and further results from the drill programme are expected in the near term.
Buena Vista ore has proven to be significantly different to other magnetite ores in that the iron readily upgrades without the need for expensive fine grinding. The benefits from this will be seen in project economics.
The company's metallurgical test work is proving that even low grade Buena Vista ore upgrades, at a significantly coarser grind than typical BIF (taconite) magnetite ore, to produce high quality clean concentrate grading 67.5-69% Fe.
There is an aggressive exploration programme for Nevada Iron to increase and expand the existing JORC resources and converting known higher grade exploration targets and prospects to JORC resources.
The programme at Section 5 prospect and a number of other prospects is consistent with the goal of increasing the resource base to support the case for the future expansion of the project.
With Mick McMullen taking on the role of executive chairman with the primary responsibility of arranging financing for the development of the Buena Vista Iron Project, the project and Nevada Iron has strong catalysts for valuation upside.