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Is Shree Minerals The Next Iron Ore Producer In Australia?

Shree Minerals (ASX:SHH) has re-affirmed that it is awaiting Commonwealth approvals for mining to commence at its Nelson Bay River Iron Project (NYSE:NBR) in Tasmania.

Tasmanian approvals were received from:

- Circular Head Council, Tasmania;
- Environmental Protection Authority (EPA), Tasmania; and,
- Mineral Resources Tasmania (NYSE:MRT) grant of Mining Lease

Federal approval expected soon

Shree said it expects a final decision from the Australian Commonwealth Government under EPBC Act, for which the final EIS has been published following response to submission received as a result of public exhibition of Draft EIS.

Further that it expects to receive approval and a final decision is now expected soon.

Other highlights included:

- Grant of Mining Lease from Mineral Resources Tasmania (MRT) for mining at NBR has been received
- Maiden Reserves published and DSO mine plan for first 2 years finalised (October 2012).
- The 2011/12 fieldwork at Mt.Sorell has identified encouraging signs for the presence of Volcanic Hosted Massive

Mine Plan for DSO Iron Ore

The production schedule for the first two years comprises mining of DSO iron ore.

The DSO requires no further beneficiation to produce a marketable product. It only requires crushing and screening. Two separate DSO pits are planned in the first two years (comprising DSO South Pit and DSO North Pit, which is within the BFO resources) with following total resultant pit quantity of 815,000 tonnes at 57.5% iron (Fe):

The DSO is a first, lucrative stage of mining at NBR. It involves minimal CAPEX and no infrastructure CAPEX.

Development stages at NBR

Development of the project involves three stages. The first stage is to develop two relatively shallow opencut mines to produce direct shipping grade hematite ore.

This direct shipping ore (DSO) only requires crushing and sizing to produce the DSO product. Each pit will produce a separate grade of DSO product.

The south pit has a higher DSO grade and will be mined first with the product transported to Port Latta for export. The north DSO pit, situated above the main magnetite orebody will follow. It has a lower DSO grade.

Stage two involves the continuation of mining of the northern DSO opencut. Here the stage one DSO hematite oxide cap is surrounded by lower grade ore considered to have the potential to be processed to produce a commercial beneficiated oxide product (NYSE:BFO). Processing the BFO material is considered to be stage two of the project.

Stage three of the project involves the opencut mining of the deep magnetite orebody beneath the oxide cap. This magnetite ore will require processing to produce commercial grade magnetite products and the BFO processing plant will be modified to achieve this objective.

Earlier studies demonstrated that the magnetite ore can produce two products, a dense media magnetite (DMM) product suitable for coal washery applications or a blast furnace pellet (BFP) magnetite product.

Suppliers are few in number for the higher value DMM product and mining generally occurs on a small scale. This would suit the Nelson Bay Iron Project.

Drilling to commence November at NBR

Shree is planning to commence drilling at the NBR and Rebecca Creek tenements during the second week of November.

Documentation for approval to drill ~3500 m to improve resource category and further extension of resources and geotechnical studies at the Project was submitted to the Minerals and Resources Tasmania.

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