WPG Resources (ASX: WPG) has defined a highly anticipated maiden resource of 689 million tonnes at 30.9% iron for its Giffen Well project in South Australia, one of the highest grade BIF iron ore deposits in Australia.
Importantly, over 62% of the tonnage, or about 427.6 million tonnes at 31.17%, is classified as Indicated resources.
The resource also exceeds that at the nearby Hawks Nest project that it had sold to OneSteel (now Arrium) Limited (ASX: ARI) in late 2011.
The resource estimate is based on the results of WPG's recently completed 16-hole reverse circulation and diamond drilling program and previous drilling carried out by the South Australian Department of Minerals and Energy in the mid-1990's.
The 13 holes drilled by the company on the main BIF mineralisation had all intersected geology consistent with expectations, indicating continuity of the steeply dipping main BIF mineralisation over more than 3 kilometres of strike length.
Further work by WPG at Giffen Well is dependent on the results of the Pre-Feasibility Study currently being undertaken and other commercial considerations.
Giffen Well is a well know high grade magnetite BIF deposit with low levels of impurities where over 50 holes had been drilled in the past.
Located in the Gawler Craton about 120 kilometres south of Coober Pedy and 25 kilometres from the Central Australian railway line, the project has a direct link to WPG's Port Pirie port facility.
Giffen Well is a Paleoproterozic banded iron formation with mineralisation occurring in three separate zones that are located in a granite embayment.
The main BIF zone is 3.9 kilometres long and up to 350 metres thick while two smaller BIF zones are located between 600 metres and 800 metres to the west of the main zone.
In all cases the mineralisation extends beyond the limit of drilling and is open at depth.
While WPG has not carried out any detailed mine planning, it is currently assumed that any future mining will be by open pit methods.
It is assumed that the primary BIF ore will be treated by way of crushing, grinding and magnetic separation methods with WPG examining various options for treatment of the oxide ore.
Davis Tube Recovery (DTR) test work is in progress on 247 samples that have been made up by compositing 5 metres intervals of the mineralised WPG reverse circulation percussion sample material collected from the primary BIF zones. Results are expected to be available by the end of October.
WPG had in January this year re-entered the iron ore market with the signing of an agreement with Brisbane-based Maosen Australia for the iron ore rights covering EL 3945 at Giffen Well.
It can earn up to an 82% joint venture interest in the project with a A$5 million payment and funding of a Bankable Feasibility Study.
On a decision to mine, WPG subsidiary Giffen Iron will pay a further $10 million, at which time Maosen has the right to decide whether to retain its equity interest in the project or exchange it for a royalty of $0.70 per tonne of ore mined.
Maosen will retain the non-iron rights at Giffen Well.
The company had been trying to get access to Giffen Well since 2008, with executive chairman Bob Duffin telling Proactive Investors back in January that it is a first class prospect.
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