The Resource comprises 16.1 million tonnes at 23.1% for contained iron of 3.7 million tonnes at a 15% cut off, as well as a lower grade halo of 16 million tonnes at 12.2% for contained iron of 2 million tonnes at a 10% cut off.
Providing exploration upside, the Section 5 resource is open at depth and along strike to the northwest.
Potential exists to drill out the gap in the resource base between the Section 5 deposit and the West deposit where a moderate magnetic anomaly is present.
Mick McMullen, executive chairman, told Proactive Investors today the resource for Section 5 is about 50% more tonnes at roughly the same grade as the exploration target.
"We saw a similar trend for the West deposit when it was done. So I would think as a minimum we should get an extra 200 million tonnes of resource, subject to drilling results of course."
The Buena Vista Project's currently identified exploration targets provide for an additional 195 to 268 million tonnes of exploration potential.
The West deposit currently contains an Indicated Resource of 100.2 million tonnes at 20.3% for 20.3 million tonnes of contained iron.
The South Central deposit hosts an Inferred Resource of 18 million tonnes at 21.3% for 3.7 million tonnes of contained iron and the East deposit has an Inferred Resource of 19 million tonnes at 21.5% for 4 million tonnes of contained iron.
Updated resource estimates for the combined West, South Central (now called West) and East deposits are also being prepared.
The Section 5 deposit is located about 1 kilometre west of the proposed processing plant site at the Buena Vista Project, and is the first of the new resources to be estimated for the project after completion of a 17,000 metre drill program in 2012.
Drilling of the Section 5 deposit was aimed at delineating a shallow, higher grade resource that could be efficiently used for additional ore feed in the initial stages of mining operations.
The drilling was targeted around the historical drilling and a strong magnetic anomaly.
Initial economic studies indicate that at a US$110 per tonne price for 62% iron material, the preliminary economic cut-off grade for this pit is in the order of 10% total iron.
Pit optimisation and mine planning is now underway on the Section 5 deposit to determine the reserve base for inclusion in the updated Feasibility Study.
Following this Nevada Iron aims to define a reserve for the entire Buena Vista Project.
McMullen said an updated economic study would then be undertaken, within about a month from now, which will be mostly at a Feasibility Study level apart from a few smaller areas at a Pre-Feasibility Study level.
Drilling is targeted for March/April to bring resources into other deposits near the processing plant, such as BV-D, Iron Point and South West, which between them is expected to deliver another 50 to 60 million tonnes of mineable material.
With today's maiden Resource for Section 5 and further resources expected to be defined at the Buena Vista Iron Project, Nevada Iron is well on the way to building a substantial resource base.
Other deposits near to the proposed processing plant could also potentially add another 50 to 60 million tonnes of mineable material.
This would take the company well over the 20 year mine life for phase one of the project and start to build the resource base to support phase two (doubling capacity).
There are significant catalysts and milestones ahead for Nevada Iron to move the current valuation.
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