Mindax (ASX: MDX) has the opportunity to boost early cash flows at the Mt Forrest iron project after desktop engineering studies of the DSO iron mineralisation at the Toucan prospect identified gold from assaying of recent drilling.
While the gold is not economic by itself it does have significant value when assessed in conjunction with a potential DSO operation.
The highlights from Toucan included 21 metres at 4.81 grams per tonne (g/t) gold from 64 metres, and 4 metres at 6.7g/t gold from 56 metres.
Mindax said that the gold mineralisation is complementary to the company’s planned DSO operations because of its position relative to the DSO mineralisation.
Preliminary desktop engineering studies at Toucan has shown that there is significant supergene gold within a proposed pit footprint for the extraction of DSO material - which has significant value when assessed in conjunction with a potential DSO operation.
Toucan can now complement the existing JORC Inferred Resource at Paradise Bore of 400,000 tonnes at 2.8g/t for 36,000 gold ounces.
Planned DSO drilling at Currawong immediately along strike from Paradise Bore will also be selectively assayed for gold.
These results come hot on the heels from last month’s announcement of the Mindax strategy for DSO production in the second half of 2013, which will provide cashflows to help fund the magnetite production in 2015.
Importantly for Mindax - infrastructure access and complimentary tenure to the mining leases are being aligned, with a major resource to delineation and metallurgical testing program to kick off in August.
Greg Bromley, managing director, told Proactive Investors in July that third party infrastructure providers (both established and new to the region) are showing a keen interest to build port, power and rail facilities because they see an unusually high number of potential miners with resource assets within a few kilometres of Mt Forrest.
The direct shipping ore component is a regolith mag-hematite resource with a JORC Inferred and Indicated at 19 million tonnes at 42.3% iron.
Mindax has an exploration target of 35 to 50 million tonnes of regolith iron material at a grade of 42% to 58% iron, which has been established from the enhanced geological understanding at Mt Forrest.
First quarter drilling results confirmed 50% iron primary magnetite mineralisation.
The primary magnetite resource is a JORC Inferred and Indicated at 1.43 billion tonnes at 31.5% iron.